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Two more of our companies have reported results this week.
One is a recent purchase, while the other was the second stock we ever bought for the portfolio.
Let’s look at how our new holding is doing, update why we bought the older one in the first place, and check if the investment thesis for both is holding strong.
Holding #1:
Our newest portfolio addition is shifting strategies to reduce risk and become more capital-light.
What are they doing with the freed up capital?
Buying back shares at low valuations!
They retired over 9 million shares this quarter.
Between the dividend and remaining buyback capacity, we are looking at a shareholder yield north of 7%.
Holding #2:
This holding is a toll bridge on global trading, protected by an incredibly deep moat built on scale and network effects.
More buyers and sellers create more liquidity, which lowers costs and attracts even more users.
How’d their second quarter go?
Very well!
Record Activity: Second-highest Q2 trading volumes on record
A Widening Moat: We bought this company because they save clients massive amounts of money. That moat is only getting deeper - the amount they save clients is tens of billions of dollars more per day then when we bought them.
Capital Returns: Management targets returning 50% to 60% of cash earnings to shareholders via regular and variable dividends. On top of that, they’ve recently aggressively deployed cash into share repurchases.
Conclusion
Overall, nothing has changed about the long-term investment case for either of these compounders.
Both businesses are performing exactly as expected, and our investment thesis is fully intact.
Want to see the full updates?
Upgrade and see our exact portfolio holdings, read the full Q2 report, and get access to our community of amazing dividend investors.
One Dividend At A Time,
-TJ
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
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