Why I'm Leaving a $16.50 Dividend on the Table

Presented by Wyatt Investment Research     Wednesday, April 01, 2015 Why I'm Leaving a $16.50 Dividend on the Table by Stephen Mauzy   Hindsight being what it is, I would have liked to have owned Kraft Foods Group (NASDAQ: KRFT) shares on March 24. Come March 25, I'd have woken up to a 33% gain that has since swelled to 45%.   But of course I didn't own Kraft, and for what I thought were sound reasons: I didn't want to own a no-growth company trading at 35 times 2014 EPS of $1.74.   Admittedly, 2014 EPS was blemished by a large "non-recurring" pension charge. EPS for the previous two years were $4.51 and $2.73, respectively. But weren't they overstated for the same reason 2014 earning were understated – pension charges were improperly apportioned?  Oh well, "normalized" EPS for 2015 would be closer to $3.50.    Still, I remained on the sidelines. I also had no interest in owning an array of hidebound food brands whose heyday was the 1970s: Kraft Macaroni & Cheese, Jell-O, Cool Whip, Jet-Puffed Marshmallows, Oscar Mayer, Kool-Aid, Cheez Whiz. That a block of cheese-like product – Velveeta – can sit indefinitely at room temperature should give reason to pause.   More consumers are pausing. Kraft's annual sales were $18.21 billion last year. In 2011, they were $18.66 billion.   So much for sound reasoning. Little did I realize alchemists were waiting in the wings. What's more, they were waiting with promises of efficiency, cheap financing, and a $16.50 dividend.     VISIT OUR SPONSOR Collect Dividend Income Every Month!   We've put together a simple calendar that pulls together all the market's best dividends into a single, easy-to-read document. One look, and you'll be able to set up a 12-month dividend stream for regular income every month.   Click here to see the full details   I refer to 3G Capital and Berkshire Hathaway (NYSE: BRK-B). The combination might ring familiar. 3G Capital (lead by Jorge Paolo Lemann) and Berkshire (lead by Warren Buffett) hooked up a couple years ago for the leveraged buyout of H.J. Heinz. They've hooked up again. Heinz will take over Kraft.   The mechanics of the deal call for Heinz to offer one share of its stock for each Kraft share. There is one minor inconvenience. Heinz is private and will have to publicly list its shares in connection with the transaction. Asymmetrical knowledge should, therefore, raise an eyebrow (though it apparently doesn't). Buffett and Lehmann have the best knowledge, if not only knowledge, of Heinz's value.   But what about the $16.50 per share dividend?   3G Capital and Berkshire aren't being magnanimous. If Heinz had offered all stock, 3G's and Berkshire's ownership of the combined enterprise would have dropped below 50%. Therefore, 3G and Berkshire are tossing in a $10 billion ($16.50 per share) dividend. This keeps 3G's and Berkshire's combined ownership of the new enterprise at 51%.   If you were to buy Kraft shares today, you can be sure of receiving a $16.50 per share dividend, and a likely equal haircut in share value. This isn't to say Kraft shares (or the new Kraft Heinz) won't rise. 3G Capital has a storied history of taking stagnating brands and milking them for all they are worth.    For instance, 3G Capital orchestrated the merger of brewery giants Anheuser-Busch and InBev in 2008.  Since then, gross margins of the combined entity have improved nearly 800 basis points. I hear 3G has worked similar magic on Heinz.    Like with Anheuser-Busch and Heinz, growth is non-existent at Kraft. The value proposition centers on deft handling of the scalpel. The new Kraft Heinz is expected to find savings of $1.7 billion annually by the end of 2017.   It won't be easy. Virtually all of Kraft's sales are generated in North America. By contrast, 62% of Heinz's $11 billion sales are generated outside North America. It's safe to assume that Heinz is running close to maximum efficiency, so it's Kraft's hide that will account for most of the savings. I'm skeptical that Kraft has that much hide to lose.      What's more, I'm unconvinced more inefficiencies aren't in the waiting. Offering diverse products across highly diverse consumer economies, Kraft and Heinz could as likely generate diseconomies of scale as synergy savings. This isn't a company with a single-product offering, like beer.    Yes, I could be wrong again, but I'll chance it. I'm taking a pass on this $16.50 dividend.   Good Investing,   Stephen Mauzy Aurora, Colo.    Investor Research Institute   Click here to read more top investment ideas from Wyatt Investment Research
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Partner Program Insider Edition-Hot Verticals: Enter New Ones, Go Deeper, Make It Recurring Revenue

Business Solutions Newsletter | April 01, 2015 | View web version here.   In This Issue: Hot Verticals: Enter New Ones, Go Deeper, Make It Recurring Revenue The Biggest Opportunity In Retail IT: Changes In Payment Technologies The Education IT Market Could Offer More Opportunity Than You Think Discover Is Partnering With The POS Channel To Accelerate EMV Deployment 4 Mistakes To Avoid When Selling Healthcare IT Bematech Partner Plus Program The Cayan Partner Program Dealer-Centric Integrated Payments SMBs In 2015: IT Budget For Cloud Solutions, Staying Connected Where The Growing Hospitality Market Will Spend Its IT Budget Harbortouch Delivers Turnkey "As-A-Service" Solution Open Your Business To Partner Power Partner With Moneris Solutions, The North American Leader In EMV Searching For Security Why Choose Sterling Payment Technologies? TSYS Partner Program — Partnerships That Produce Hot Verticals: Enter New Ones, Go Deeper, Make It Recurring Revenue By Mike Monocello, editor in chief Welcome to the 2015 edition of the Business Solutions’ Partner Program Insider! What you’re holding is a treasure trove of insightful and business-altering information. Sponsor   Harbortouch recently announced a number of exciting new products and services to put them at the forefront of innovation. Harbortouch has refreshed their flagship Elite POS system with upgraded hardware and improved performance, unveiled a new "tablet killer" Echo POS system for smaller merchants, and integrated the entire line-up with Apple Pay. For more information about Harbortouch, visit www.htresellers.com or email resellers@harbortouch.com. Featured Articles The Biggest Opportunity In Retail IT: Changes In Payment Technologies By Bernadette Wilson, associate editor Business Solutions polled channel vendors on the biggest opportunity in retail IT, and nearly all of the responses included ways to capitalize on the changing landscape of payment technologies. The Education IT Market Could Offer More Opportunity Than You Think By Bernadette Wilson, associate editor Schools are buying solutions that help them control operational costs, comply with regulations, and evolve with the ways students consume information. SMBs In 2015: IT Budget For Cloud Solutions, Staying Connected By Bernadette Wilson, associate editor Solutions providers that understand SMBs’ needs for security, cost savings, and increased efficiency can grow their businesses — as well as customer loyalty. Where The Growing Hospitality Market Will Spend Its IT Budget By Bernadette Wilson, associate editor Solutions your hospitality IT customers are considering range from traditional POS to locationing and analytics, but they share a common goal of enhancing the customer experience. 4 Mistakes To Avoid When Selling Healthcare IT By Bernadette Wilson, associate editor Healthcare IT solutions providers need to educate themselves — and maybe their clients, as well — on health IT-related regulations and on the solutions that meet their needs while keeping them in compliance. Discover Is Partnering With The POS Channel To Accelerate EMV Deployment By John Badovinac For the past several years Discover has been in discussions with key participants in the integrated Payments Channel in order to help plan for and accelerate EMV deployment. Discover has conducted EMV engagement discussions with the top ISVs in the channel in order to share information and validate EMV enablement plans. Harbortouch Delivers Turnkey "As-A-Service" Solution By Rohan Mani If you have attended any VAR/ISV trade shows or read through any industry publications over the past year, then you know that "as-a-Service" has become a prominent topic in the industry. Although this sales model represents a major shift for the industry, the benefits of recurring revenue are impossible to ignore. Bematech Partner Plus Program By Juliet Derby Partners get access to all partners-only content on the Bematech Partner Plus website, including market research reports, white papers, channel e-newsletters, etc. The Cayan Partner Program By Russell Harty Adding Cayan to your portfolio connects you to a suite of scalable, flexible, and secure payment technologies that supports your customers with today's payment needs and prepares them for the future. Dealer-Centric Integrated Payments By Justin Zeigler Dealer protection, forward-thinking solutions, and recurring revenue drive channel success. Open Your Business To Partner Power By Kenneth Hune Petersen Great products do not sell themselves, nor evolve automatically into offerings with better coverage of market demands. A software producer needs distributors and system integrators, marketers need products they can believe in, and operational experts need innovators or networkers. Partner With Moneris Solutions, The North American Leader In EMV By Pat Woods Moneris Solutions, the pioneer in EMV conversions with over a decade of experience and more than 95 percent of our over 350,000 merchant locations EMV-enabled, is now EMV-ready in the U.S. Searching For Security By Sid Singh Mobility, transaction data integration, apps, and cloud/SaaS-based software deployment will transform how we pay for goods and services. Why Choose Sterling Payment Technologies? By Gary T. Staub For more than a decade, Sterling has built strong relationships and invested heavily in POS businesses like yours through our Partner Program. We are committed to going above and beyond to help our reseller partners grow and prosper. TSYS Partner Program — Partnerships That Produce By Bill Lodes We invest in our partnerships. We’ve designed a program tailored for you. Most Popular News • Point Of Sale Payment Processing And Data Collection News From February 2015 • Verizon PCI Report Compliance Should Be A Process To Support Security • Retail Mobile Strategy: Points Of Customer Engagement And Solutions That Work Featured Products And Services   ChipDNA - EMV Migration   Download Brochure • Request Information Creditcall Corporation   PowaPOS Accessories   Download Brochure • Request Information PowaPOS   Payment Options For Restaurants   Download Brochure • Request Information WorldPay Connect With Business Solutions:       Ensure our newsletter reaches your inbox by following these whitelist instructions. If you need to update your Business Solutions user profile, please visit here. This newsletter is being sent to ignoble.experiment@arconati.us. To cancel your subscription to the Business Solutions newsletter, please opt out here. You may also send an email to newsletter@vertmarkets.com.     © Copyright 2015 Vertmarkets, Inc, 5340 Fryling Rd Suite 300, Erie, PA 16510. All rights reserved. All product names contained herein are the trademarks of their respective holders.

WEBINAR: Three Ways to Tame the Wild West of WebRTC

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Three Ways to Tame the Wild West of WebRTC Tuesday, April 21, 2015 TIME: 11:00am ET/ 8:00am PT   Web Real-time Communication (WebRTC) is one of the most disruptive communication and collaboration technologies to hit the market in years. It's a wild, untamed market that is expected to become more complex as the device base continues to move from PCs to mobile phones and tablets…and beyond. Taming the Wild West of WebRTC may seem daunting, but the answer is as simple as S-B-C. Session Border Controllers (SBCs) deployed at the edge of the network help secure networks from attack by recognizing and neutralizing threats, while ensuring reliable communication by bridging the technology gap between old and new. SBCs are a critical component of a successful WebRTC game plan for any enterprise or service provider. Although WebRTC is generating high levels of interest and excitement, IT departments need to be aware of 3 key factors: WebRTC must  integrate seamlessly into established SIP environments Enterprises and service providers need to be judicious about network security to prevent attacks over WebRTC. WebRTC will open up new revenue streams and means to improve customer satisfaction Join the discussion to learn how  WebRTC can open your business  to new frontiers, securely and reliably.   Register Today Sponsors:		Presenter: David Tipping Vice President and General Manager, SBC Business, Sonus David Tipping is the vice president and general manager of the SBC Business at Sonus. Prior to this role, Tipping served as Sonus' Vice president of product marketing and product management. Tipping has served in several executive and management roles during his tenure with Sonus, including Vice president of Sonus Worldwide Systems Engineering, Vice president of Sonus' Service Providers for the Americas division and as technical director of Sonus' Eastern region. Previously, Tipping spent four years at Enterasys/Cabletron Systems, a Siemens enterprise communications company, as a Senior Systems Engineer supporting customers in the Midwest and New England. He received a Bachelor of Science degree from the University of New Hampshire. Moderator: Peter Bernstein Senior Editor TMCnet Peter Bernstein is a seasoned writer and professional with deep experience in the communications and IT industries. As a top-level industry analyst, Peter has keynoted major technology events and has been cited numerous times by The New York Times, The Wall Street Journal, The Los Angeles Times, USA Today, The Washington Post, Business Week, Fortune Magazine, ComputerWorld, NetworkWorld, Communications Week, among other publications. .
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