FR: Otis Helps Take United Technologies to the Top

Article: Otis Helps Take United Technologies to the Top

Another “Fool Revisited” piece, another sector article, though technically I milked the defense sector for two articles, the other which you’ll see on Thursday. (Spoiler alert: it’s about dividends among defense contractors). This article discusses the non-defense part of United Technologies (NYSE: UTX), a Dow component and massive conglomerate with multiple subsidiaries.

I narrowed in on Otis Elevators for a couple of reasons. First, I had seen the name Otis on a lot of elevators at the time, and when learning about United Technologies’ other businesses, it stood out for that reason. I also knew of the company because I once lived across the street from an elevator repairman that worked for Otis, so it was a company that I knew about indirectly as well, though I can’t remember if this salient fact had anything to do with picking Otis out from all of United’s other non-defense subsidiaries. Continue reading

FR: Sprint Nextel Pins Its Hope on iPhone

Article: Sprint Nextel Pins Its Hope on iPhone

Remember living in a world when the latest iPhone version was indicated by a number and not an X? Or when it used to be exclusive to only Verizon and AT&T? Well, the latest article in my “Fool Revisited” series covers this strange time in our not-so-distant past when Sprint Corporation (NYSE:S) was finally getting to sell the iPhone 5! And iPhone 4 models too! We’ve come a long way in 6+ years since the article was published.

The angle I took with the article was looking at some of the smaller regional carriers that had customers that might be attracted to the iPhone on Sprint, primarily because of its unlimited data plan, something that no other carrier was offering at the time. This wasn’t a terrible line of thinking, though it doesn’t look like it has paid off for the carrier’s stock in the meantime, and Sprint and T-Mobile remain distantly behind Verizon and AT&T in total subscribers even to this day. Continue reading

FR: Spending Money to Make Money With the NFL

Article: Spending Money to Make Money With the NFL

Like many of the previous articles in this series, the next article in my “Fool Revisited” series was sector piece. And like my first article, it was inspired by the NFL, though this time it was more a reaction to a season in full swing and not the resolution of that year’s lockout. The focus in this article was media companies, and I tried to point to all the media partners that the NFL had and how those companies were earning more than their astronomical rights fees from advertising.

Whether this argument would hold up these days remains to be seen, and with new “partners” joining the fray – Amazon broadcast numerous Thursday Night Football games this year and Verizon’s Yahoo! Sports streamed some postseason games – the money the NFL receives for its broadcasting rights might be more lucrative for both them and their partners. However, NFL viewership seems to be down, and while some people have pointed to “flag” protests or concussion and injury concerns, it could just simply be a change in our television viewing habits that have driven the change. Continue reading

FR: Growth Ahead for Dunkin’ Brands?

Article: Growth Ahead for Dunkin’ Brands?

The next article in my “Fool Revisited” series was prompted by the news that Dunkin’ Brands (Nasdaq: DNKN) had filed for an IPO and was going public. As indicated in the lede of the article, I had grown to appreciate Dunkin’ Donuts after living in Connecticut for 10 years, and after not being much of a coffee drinker growing up, learned to value the cheap and usually unburnt coffee on my way to (and sometimes from) work every day. Besides, it’s almost illegal to live in New England and not drink DD, so I had to adapt before they through me in jail or something.

At the time, Dunkin’ Brands was mainly confined to the states east of the Mississippi River – though it did have a presence elsewhere due to its ownership of Baskin-Robbins. It also uses a primarily franchise-driven model, with the majority of its stores owned by franchisees, which shifts a lot of the revenue to franchise fees and the like. This is different than Starbucks (Nasdaq: SBUX), for example, which owns the majority of its stores and derives the bulk of its revenue from the actual coffee/goodies it sells.

Must have felt like the world needed to see this article, so here’s the ancient tweet announcing its arrival:

https://twitter.com/GuruEbby/status/119445935255334913

Dunkin’ Brands did do better than the S&P 500, but Starbucks blew both out of the water. Granted, Starbucks was also starting from a position of power and wasn’t overcoming some of the new struggles that new public companies face, unlike Dunkin’ Brands at the time. Nevertheless, and investor would have been rewarded for sticking around through some of the early rough stretches. Using the compound annual growth rate (CAGR) and total growth, here’s how Dunkin’ Brands (and Starbucks) fared versus the S&P 500 from article publication (September 29, 2011) through January 12, 2018:

Stock Start Price End Price CAGR Total Growth Value of $10,000
Dunkin’ Brands $24.66 $64.39 16.48% 161.11% $26,111
Starbucks $17.33 $60.40 21.94% 248.53% $34,853
S&P 500 $1,160.40 $2,786.24 14.93% 140.11% $24,011

Source: Yahoo! Finance & author calculation; Stock prices include dividends & stock splits

When Dunkin’ Brands went public, they used a lot of the proceeds to pay off debt and reward its previous owners. Since then, as noted above, the stock has been a pretty solid performer, even introducing a dividend early in 2017. I’m personally more partial to Starbucks as an investment, but if Dunkin’ Brands can continue to show that it can compete as both a company and a stock, I could be interested in the future.

Until next time…

Disclaimer: I do not personally own shares of either company mentioned here, but I have purchased and currently own shares of Starbucks within my mother’s investment portfolio which I manage. However, I have no plans to purchase shares of either company within the next 60 days in any account in which I manage investment funds. You can read a little about my personal investment philosophy here.