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The Dividend Growth Portfolio bought a position in Canon Inc last week. Canon is one of the world’s leading designers, manufacturers and marketers of office equipment (office, personal and full color copying machines, office and network digital multifunction devices, laser and inkjet printers, scanners), cameras (digital and film cameras, digital video camcorders and camera accessories) and optical products (semiconductor production equipment, broadcasting lenses, medical equipment and electronic components).
The company’s corporate mission is to achieve the number one position in each of its core businesses. Its strategy is to focus on:
(1) research and development, the company:
(a) completed a technology center in 2005. Its task is to focus on the development of next generation products,
(b) acquired ANELVA to assist in the development of in-house production equipment to differentiate Canon products from competition.
(2) maintaining state of the art production facilities, the company:
(a) acquired NEC Machinery to advance the automation of Canon’s production processes,
(b) acquired Argo 21 to improve the management and servicing of its information systems,
(c) is planning a production engineering facility to strengthen its production technology capabilities and reduce costs.
The company has achieved a 15-17% return on equity and Value Line projects that it will continue to do so. Earnings and dividends have grown 20-30% over the last 10 years. While increasing competition will likely reduce that rate, they are still likely to attain a 12-15% level over the next 2-3 years. The company has a solid balance sheet (1% debt), improving operating and net profit margins and an ongoing stock buy back program.
EPS: 2006 $2.94, 2007 $3.35, 2008 $3.60; DVD: $.90 YLD 1.5%
http://finance.yahoo.com/q?s=CAJ
As a note, the above is my first attempt to expand the narrative on each of the companies whose stocks our Portfolios own in order to give subscribers more detail on the fundamental reasons for owning them. It will take a while to write the more detailed reports, so your patience is appreciated.
News on Stocks in Our Portfolios
Automatic Data Processing (Dividend Growth Portfolio) reported its first fiscal quarter operating earnings per share of $.45 versus expectations of $.43 and $.39 recorded in the comparable 2007 fiscal quarter.
EPS: 2006 $1.85, 2007 $1.83, 2008 $2.15; DVD: $.83 YLD 1.9%
http://finance.yahoo.com/q?s=ADP
Proctor and Gamble (Dividend Growth Portfolio) reported its first fiscal quarter earnings per share of $.92 versus expectations of $.89 and $.79 recorded in the comparable 2007 fiscal quarter. The company also raised per share guidance for the full year by $.02.
EPS: 2006 $2.64, 2007 $3.04, 2008 $3.47; DVD: $1.28 YLD 2.0%
http://finance.yahoo.com/q?s=PG
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