XOM – EXXON MOBIL CORPORATION (HQ: USA/Industry: Oil, Gas & Consumable Fuels)
ExxonMobil and its affiliated companies operates or market products in the United States and most other countries of the world. The principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen and biofuels. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses.

ExxonMobile recently had its best year for FCF/share since 2012, with all other years in-between having inconsistent growth and 2020 being negative. Along with multiple years where the dividend amount was greater than FCF/share. This is partially due to the company continuously raising the dividend by a total of 60% over the last 10-years. Along with a large increase in the company’s debt to equity ratio over the same period could help explain how the company covered these dividend payments. To value the business at their current market price the company would need more than 12% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=34088&owner=exclude

ARLP – ALLIANCE RESOURCE PARTNERS UNT (HQ: USA/Industry: Oil, Gas & Consumable Fuels)
Alliance Resource is a diversified natural resource company that generates operating income from the production and marketing of coal and royalty income from coal and oil & gas mineral interests located in strategic producing regions across the United States. The primary focus of the business is to maximize the value of existing mineral assets, both in the production of coal from mining assets and the leasing and development of coal and oil & gas mineral ownership. The company believes that its diverse and rich resource base will allow them to continue to create long-term value for unitholders.

Alliance Resources’ stock is currently trading below a margin of safety intrinsic value, which has to do with being in an unpopular industry (coal), and very likely that company’s in the industry will trade below their intrinsic value. The company has been able to maintain an average ROE of nearly 25% and ROIC of 15% of the last 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1086600&owner=exclude

RIO – RIO TINTO PLC (HQ: United Kingdom/Industry: Metals & Mining)
Rio Tinto uses some of the most advanced exploration technologies in the world to find potential sources of minerals and metals. The company considers new commodities and products with an understanding of customers’ and communities’ needs. While also being mindful of potential future social and environmental impacts as well as the diversity and balance of its portfolio.

Though Rio Tinto had inconsistent growth over the last 10-years, the most recent 4 to 5-years has been tracking positively, particularly with revenue and FCF/share greatly improving during these most recent years. Along with a dividend that is up over 300% and share count down 12% since 2012. To value the business at their current market price the company would need more than a 7% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=863064&owner=exclude

LCII – LCI INDUSTRIES (HQ: USA/Industry: Auto Components)
LCI Industries supplies, domestically and internationally, a broad array of highly engineered components for the leading original equipment manufacturers in the recreation and transportation product markets, consisting primarily of recreational vehicles and adjacent industries, including buses; trailers used to haul boats, livestock, equipment, and other cargo; trucks; boats; trains; manufactured homes; and modular housing. While also suppling engineered components to the related aftermarkets of these industries, primarily by selling to retail dealers, wholesale distributors, and service centers.

LCI’s most recent FCF/share was negative, however, prior to this it was positive going back to 2012. Along with pretty consistent revenue, EPS and BV growth during the 10-year period. With an average ROE of 20% and ROIC averaging nearly 14% during the period. To value the business at their current market price the company would need more than 17% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=763744&owner=exclude

GNRC – GENERAC HOLDINGS INC. (HQ: USA/Industry: Electrical Equipment)
Generac is a leading energy technology solutions company that provides backup and prime power generation systems for residential and commercial & industrial applications, solar + battery storage solutions, energy management devices and controls, advanced power grid software platforms & services, and engine- & battery-powered tools and equipment. The company is committed to sustainable, cleaner energy products poised to revolutionize the 21st century electrical grid. As an energy technology solutions company that is “Powering a Smarter World”, with a corporate purpose to lead the evolution to more resilient, efficient, and sustainable energy solutions around the world.

Generac’s last 10-years have not shown consistent growth, but revenue, EPS, BV and FCF/share have all grown at least 100% during this period. Along with ROE averaging nearly 30% and ROIC almost 20%. The stock is priced high with a P/E of 37, and to value the business at their current market price the company would need more than 25% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1474735&owner=exclude