Quarterly Movers and Shakers

During the past three months, the S&P 500 index rose 7.1% as vaccines started rolling out and investors looked forward to a more “normal” 2021. The following HIquality stocks generated 10% or better gains during the same period.

Walgreens (WBA) reported fiscal first quarter revenues increased 6% to $36.3 billion with the company reporting a loss of $308 million, reflecting the adverse impact of COVID-19 on financial results. Free cash flow increased 13% during the quarter to $764 million with the company paying $405 million in dividends and repurchasing $110 million of its common stock. The company announced plans to divest its pharmaceutical wholesale business for about $6.5 billion with plans to use the cash proceeds to accelerate its investment in the VillageMD full-service primary care clinics within its stores. Walgreens’ dividend yields a healthy 3.9%. Walgreens’ stock rebounded 28% during the past quarter. Hold.

Tractor Supply (TSCO) reported 2020 sales increased 27% to $10.62 billion with EPS plowing up a 37% gain to $6.38. During 2020, Tractor Supply delivered a bountiful 38.9% return on shareholders’ equity and generated $1.1 billion in free cash flow, up a fruitful 85% from last year. The company returned $517.6 million to shareholders through share repurchases of $343 million and $174.6 million in dividends. Reflecting confidence in the business and its robust cash flow, Tractor Supply recently increased the dividend by a hefty 30%. Tractor Supply has delivered a fertile 146% total return over the last four years. Hold.

Ulta Beauty (ULTA)The company launched Conscious Beauty at Ulta Beauty, a first-of-its kind initiative that will inspire more informed conscious product choices for guests, their loved ones and the environment. Through this program, Ulta Beauty will provide transparency around brands that use clean ingredients in their products, as well as whose products are cruelty free, vegan, use sustainable packaging and have a positive impact in communities. Ulta Beauty’s stock rose a pretty 18% during the past three months. Hold.

F5 Networks (FFIV) reported fiscal first quarter revenues increased nearly 10% to $624.6 million with EPS declining 13% to $1.41. During the quarter, F5 generated $132.7 million in free cash flow, up 9% from last year. F5 Networks announced the acquisition of privately held Volterra for approximately $440 million in cash. In connection with the transaction, F5 raised its long-term revenue outlook. The company also initiated a $500 million accelerated share repurchase in fiscal year 2021. F5’s stock whirled up an 18% gain during the past three months. Hold.

Oracle (ORCL) reported second quarter revenue rose 2% to $9.8 billion with EPS up 16% to $.80. Free cash flow increased 10% during the first half of fiscal 2021 with the company paying dividends of $1.4 billion and repurchasing $9 billion of its stock. Over the last three months, Oracle’s stock is up 16%. Hold.

T. Rowe Price (TROW) reported 2020 revenue rose 11% to $5.7 billion with EPS up 15% to $9.98. Ending assets under management increased 22% during 2020 to $1.47 trillion. T. Rowe Price recently increased its dividend 20%, marking the 35th consecutive year since the firm's initial public offering that the company has increased its dividend. T. Rowe Price’s stock has tripled over the last decade. Hold.

Biogen (BIIB) reported 2020 revenues declined 6.5% to $13.4 billion with EPS declining 21% to $24.80. Biogen generated a healthy 37% return on shareholders’ equity in 2020. Biogen repurchased about 22.4 million shares of its shares during 2020 for $6.7 billion, or $298.17 per average share. Biogen’s stock rose 12% during the past three months as the company awaits news on whether its Alzheimer’s drug will be approved by regulators around the globe. Hold.

General Dynamics (GD) reported 2020 revenue declined 4% to $37.9 billion with earnings down 9% to $3.2 billion. Return on shareholders’ equity for the year was a sturdy 20.2%. Free cash flow increased a strong 45% for the year to $2.9 billion with the company paying $1.2 billion in dividends and repurchasing $587 million of its stock. Orders remained strong across the company. Backlog grew 10% in the fourth quarter to a record high $89.5 billion due to key awards across business segments. General Dynamics’ stock bounced 10% higher in the last three months. Buy.

Intel (INTC) reported fourth quarter revenues declined 1% to $20 billion with net income dropping 15% to $5.9 billion and EPS down 10% to $1.42. For the full 2020 year, revenues rose 8% to a record $77.9 billion with net income dipping 1% to $20.9 billion and EPS up 5% to $4.94. This was the fifth consecutive year of record revenues for Intel thanks to strong customer demand in the PC-centric business segment with fourth quarter PC unit growth up 33% led by record notebook sales. The company also achieved better than-expected data-centric results, including record Mobileye revenues. Return on shareholders’ equity for the year was a strong 25.8%, reflecting the underlying profitability of the business. Free cash flow increased 25% during the year to a record $21.1 billion with the company repurchasing 274.6 million shares of its common stock for $14.2 billion at a price of about $51.71 per share while paying $5.6 billion in dividends. Intel announced a 5% increase in the dividend for 2021 at an annualized rate of $1.39 per share. For the first quarter of 2021, Intel is forecasting revenue of $17.5 billion with an operating margin of 30% and EPS of $1.10. These results reflect the exclusion of the NAND memory business due to its pending sale. The exit of the NAND and McAfee businesses are expected to generate about $12 billion in proceeds. Intel announced that its board of directors appointed Pat Gelsinger as its new chief executive officer. Gelsinger is a highly respected CEO and industry veteran with more than four decades of technology and leadership experience, including 30 years at Intel where he began his career. During the past quarter, Intel’s stock jumped 34%. Hold.

Genuine Parts (GPC) reported 2020 revenues declined 6% to $16.5 billion with adjusted EPS of $5.27. Free cash flow more than tripled during the year to $1.9 billion thanks to the sale of accounts receivables, improved working capital trends and lower capital expenditures. During the year, the firm paid $453 million in dividends and repurchased $96 million of its common stock. Genuine Parts announced a 3% increase in its dividend for 2021 to an annual rate of $3.26 per share, marking the 65th consecutive year of increased dividends. The company has paid a dividend every year since going public in 1948 with the dividend currently yielding a solid 3.1%. Management expects a solid start to 2021 as the world recovers from COVID-19. Genuine Parts expects 2021 sales growth of 4% to 6% leading to EPS in the range of $5.55 to $5.75. Genuine Parts’ stock has quintupled over the last 21 years. Hold.

Maximus (MMS) reported first quarter revenue increased 16% to $945.6 million with EPS up 13% to $1.03. Growth was driven by new COVID response work such as contact tracing, disease investigation and vaccination support. Free cash flow increased 16% during the first quarter to $89 million with the company paying $17.2 million in dividends and repurchasing $3.4 million of its common stock. Maximus raised its fiscal 2021 financial outlook with revenues now expected in the range of $3.4 billion to $3.525 billion, EPS expected in the range of $3.55 to $3.75 and free cash flow expected in the range of $310 million to $360 million. Maximus’ stock rose 12% during the past three months. Hold.

Raytheon Technologies (RTX) reported 2020 revenues were $56.6 billion with the company reporting a loss of $3.5 billion, reflecting the adverse effect of the pandemic on the aerospace sector. Backlog at the end of the year was $150.1 billion, including $82.8 billion from commercial aerospace and $67.3 billion from defense. Management’s outlook for 2021 is for sales of $63.4 billion to $65.4 billion with adjusted EPS of $3.40-$3.70. Free cash flow in 2021 is expected to increase to $4.5 billion. The company authorized a new $5 billion share repurchase program while remaining committed to paying and growing its dividend. The dividend currently yields 2.6%. As the aerospace sector recovers, free cash flow should normalize in the $8 billion to $9 billion range. With recent structural actions, Raytheon is well positioned for sustainable growth and profitability in 2021 and beyond and remains committed to returning $18 billion to $20 billion to shareholders in the next four years through dividends and share repurchases. Buy.

Cisco (CSCO) reported second quarter revenues were relatively flat at $12 billion with net income down 12% to $2.5 billion. During the first half of the fiscal year, Cisco paid $3 billion in dividends and repurchased $1.6 billion of its common stock. Cisco announced a 3% increase in its dividend, marking the tenth consecutive year of dividend increases. The dividend hike reflects Cisco’s financial strength and management’s confidence in future growth. The dividend currently yields a sturdy 3.3%. Cisco is seeing encouraging signs of strength across its business segments with 3.5% to 5.5% sales growth expected in the fiscal third quarter. Buy.