It really is extraordinary.
One aerospace company has paid five rounds of “liberty checks” to its shareholders over the past six years.
More impressive, the amounts paid in recent rounds have been elevated to Godzilla levels. This aerospace company has paid $3.84 billion in “liberty checks” to its shareholders since 2016.
You might think I refer to some staggeringly large aerospace entity. Boeing (NYSE: BA) perhaps? To the contrary, I refer to an aerospace company a fraction of Boeing’s imposing size.
The aerospace company to which I refer paid its most recent round of “liberty checks” last September. A $2,203 liberty check was paid for every 100 shares owned.
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I’m convinced that more liberty checks are on offer from the aerospace company. I expect the next round of “liberty checks” to be declared within the next 60 days. I expect them to match or exceed the recent vintage.
The business model nearly guarantees it.
A deep economic moat encircles this aerospace company. It is often the sole supplier of components for specific systems within an aircraft. Because of strict regulations related to approved parts, customers are unable to turn to a competitor to buy a knockoff replacement.
This deep economic moat promotes profit growth. The aerospace company’s annual EPS has quadrupled since 2009. Revenue growth has maintained a similar trajectory.
This aerospace company not only grows, it grows efficiently. Its operating margin has expanded 400 basis points since 2014. Its net margin has expanded 800 basis points over the same period.
A growth company that grows efficiently generates a lot of cash flow. Operating-cash flow and free-cash flow also adhere to similar growth trajectories.
Thanks to the new favorable tax laws, the company’s trajectories for cash flow and earnings should steepen.
Management expects its company to generate $95 million in additional cash in 2018. It also expects a minimum of $1 billion in operating cash flow.
EPS guidance has taken flight with company margins. Management offered $15.54 as the midpoint for annual EPS at a meeting with analysts in May. EPS will almost double this fiscal year.
As for income investors, the dynamic is easy enough to understand: More EPS growth, more cash flow, more “liberty checks.”
The aerospace company’s next round of “liberty checks” could be declared as soon as August. The past is frequently prologue. The most recent “liberty checks” – those paid in September — were declared in August.
Can this aerospace company really afford to pay such remunerative “liberty checks” annually?
The short answer – yes.
Its business is high margin and continually generates a geyser of cash. The company’s cash account exceeds $1 billion as I write. This is despite the account being siphoned of $1.26 billion of cash to pay “liberty checks” last year.
When excessive cash accumulates, or when the company becomes “over-equitized,” in management’s words, it pays “liberty checks” to shareholders. The company has again become “over-equitized.”
Past liberty checks have only enhanced shareholder value through additional income and subsequent share-price appreciation. I expect nothing less of future “liberty checks.”
Get in line to claim your share of this aerospace company’s next “liberty checks.” I am co-hosting a free, live “liberty check” webinar today (July 24) at 12 p.m. EDT (noon), and you’re invited.
I’ll reveal the name of this aerospace, “liberty-check”-paying company at the webinar.
I’ll reveal a lot more.
I’ll show you how to repeatedly collect “liberty checks” 10X the average dividend check. I will also show you how to trade the shares of “liberty check” issuers for annualized returns that exceed 66%.
Don’t delay. Space is limited and it fills quickly. Click here to reserve your spot for today’s free, live event.
You have nothing to lose except the opportunity to collect 10X more income investing in “liberty check” paying companies.
It really is extraordinary.