If you're looking for a way to benefit the ministry of your choice both now and in the future, a donor-advised fund might be right for you. With a donor-advised fund (DAF) you can make gifts to charity during your lifetime and, when you pass away, your children can carry on your legacy of giving.
How It Works
You make an initial gift of cash or stock to fund a DAF at the ministry of your choice.
You make annual recommendations on gifts to be made from your DAF.
When you pass away, your children may recommend charitable gifts from your DAF for a number of years.
At the end of the term, the remaining funds become an asset of your chosen ministry, which will help further its mission.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
Gifts of Stock
What will the market do this year? Perhaps the best answer is, "It will go up and down." Stock returns vary to a significant degree each year. However, long-term stock returns have been reasonably substantial.
Between 1990 and 2010, the average stock return was about 6%. While there was a very substantial increase during 1990-2000 and decreases during 2002 and 2008, the total return over two decades was approximately 6%.
Longer holding periods have generally resulted in higher total returns. The total stock return for seven decades between 1940 and 2010 was in excess of 10%. Returns for long periods of time have paralleled this amount.
Because many stocks have increased in value over time, you may hold stocks with substantial appreciation. If you're considering a major gift or end-of-year gift, a gift of public company stock to charity provides two major benefits. First, there is a charitable deduction for the value of the stock. Second, the charity does not pay tax on the sale of the stock so you bypass the capital gain.
Two fairly common reasons for making a substantial gift of stock are that you may have sold an appreciated asset with a large capital gain or you have good income. If you have a large gain or substantial income, you may want to offset that gain or income with a charitable deduction through a gift of stock. Because you receive both the charitable deduction and a bypass of capital gains tax, there is a double benefit for your gift of stock.
Lisa Considers a Stock Gift
Lisa was considering a gift of stock. She had purchased stock 10 years ago in a well-known company with many retail stores. With the worldwide expansion of this company, the stock had increased from her original purchase price of $50,000 to a total of $100,000 in value.
Lisa decided to visit with CPA Susan about the potential gift.
Lisa: "Susan, I bought the stock years ago and earlier this year my broker suggested that I sell half of the stock. I sold $50,000 of the $100,000 of the stock. I still have $50,000 left."
Susan: "Under the IRS rules, Lisa, you are required to divide your $50,000 cost basis between the half you sold and the half that remains. That means that half of the gain or $25,000 is going to be reported as income this year. However, if you decide to give the other half to your favorite charity, you will receive a deduction for $50,000. The deduction is based on the value of the stock on the gift date. The IRS calls that value the mean between the high and low sale price on that day. In addition, you will save capitalgains tax because you bypass the gain on the half that you've given to your favorite charity."
Lisa: "That sounds like a great plan. If I make that gift, I'll be able to benefit from a large tax deductionthat will more than offset the tax on my gain. Plus, the charity won't have to pay the tax on my stock when it sells. Finally, my charity will enjoy a very nice major gift."
Bill has Good Income This Year
Another reason for making a stock gift is that you may have a very substantial income that could cause you to pay a large income tax. Bill had purchased stock in a company recommended by his son eight years ago. His son used a computer made by this company and said to his dad that this would be a good stock to own. During that eight-year time, Bill's $15,000 initial investment had grown to a value of $165,000. Bill also had a very good year with a large income and was talking to his CPA Tom about a charitable deduction.
Bill: "Tom, I had a great year this year and I have been thinking about making a charitable gift with my stock in the computer company. It has gone way up in value and now is worth $165,000. I could sure use that deduction."
Tom: "Yes, that would be the right property to give. You will be able to claim a large deduction. Because you have a high income this year, you can take the full write-off. Plus, by giving the stock you bypass the gain. If you later would like to take your tax savings and make another stock investment, that is perfectly fine."
Bill decided to make the gift. While there is a limit of a deduction in one year to 30% of Bill's adjusted gross income, he has a high income this year and is able to take the full charitable deduction.
How to Make a Stock Gift
Most stock is held in an account at a brokerage firm. Relatively few people now wish to hold the actual certificates in their safety deposit box. If you hold actual certificates, you may mail the certificate and a signed stock power in separate envelopes to the charity.
Because most stock is held by the brokerage firm, the stock is transferred directly from the account at the brokerage firm to an account for the charity. For any gift more than $250, the charity will issue a receipt. With that receipt and the information on the stock, CPA Susan and CPA Tom will include IRS Form 8283 with the tax returns for Lisa and Bill. The gift of stock will produce a large deduction that will save huge income taxes this year.
SAVVY LIVING
Do You Need To File A Tax Return in 2015?
What are the IRS income tax filing requirements for retirees this tax season? I didn’t have to file last year, but I picked up a little income from a part-time job in 2014 and I’m wondering whether I need to file this year.
Whether or not you are required to file a federal income tax return this year will depend on how much you earned (gross income), the source of that income, your filing status and your age. Your gross income includes all the income you receive that is not exempt from tax, excluding your Social Security benefits, unless you are married and filing separately.
Here’s a rundown of the IRS filing requirements for this tax season. You probably won’t have to file if your 2014 gross income is below the threshold for your age and filing status. However, if your gross income is above the threshold then most likely you will.
Single: $10,150 ($11,700 if you’re 65 or older by Jan. 1, 2015).
Married filing jointly: $20,300 ($21,500 if you or your spouse is 65 or older; or $22,700 if you’re both over 65).
Married filing separately: $3,950 at any age.
Head of household: $13,050 ($14,600 if age 65 or older).
Qualifying widow(er) with dependent child: $16,350 ($17,550 if age 65 or older).
For a detailed breakdown on federal filing requirements as well as information on taxable and nontaxable income, call the IRS (800-829-3676) and request a free copy of the “Tax Guide for Seniors” (publication 554) or go to irs.gov/pub/irs-pdf/p554.pdf.
Special Requirements
You may be required to file a tax return even though your gross income is below the threshold for your age and filing status. For example, you will need to file if you earned more than $400 in self-employment income during 2014 or if you owe any special taxes to the IRS such as alternative minimum tax (AMT) or IRA tax penalties. In addition, you may want to file if you are due a refund.
Fortunately, the IRS offers a tool on their website that asks a series of questions designed to help you determine if you’re required to file. You can access this tool by going to irs.gov/filing and clicking on “Do you need to file a return?” You can get assistance over the phone by calling the IRS helpline at 800-829-1040 or face-to-face help at a Taxpayer Assistance Center. See irs.gov/localcontacts or call 800-829-1040 to locate a center near you.
Check Your State
Even if you’re not required to file a federal tax return this year, don’t assume that you’re also excused from filing state income taxes. The rules for your state might be very different. Check with your state tax agency before concluding that you don’t need to file. For links to state and local tax agencies see taxadmin.org and click on “State Agencies/Links” on the menu bar.
Tax Prep Assistance
If you find that you do need to file a tax return this year, you can get help through the Tax Counseling for the Elderly (or TCE) program. Sponsored by the IRS, TCE provides free tax preparation and counseling to middle and low-income taxpayers age 60 and older. Call 800-906-9887 or visitirs.treasury.gov/freetaxprep to locate a service near you.
Also check with AARP, a participant in the TCE program that provides free tax preparation at more than 5,000 sites nationwide. To locate an AARP Tax-Aide site call 888-227-7669 or visit aarp.org/findtaxhelp. You don’t have to be an AARP member to use this service.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
Howard and Lynn were age 55 when they purchased some land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Lynn: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Lynn were able to create a special trust called a charitable remainder unitrust and receive three very nice benefits.
Lynn: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
WASHINGTON NEWS
$6.3 Billion in Direct Pay Taxes
In IR-2015-34 the IRS reminded taxpayers that they may use Direct Pay to make their tax payments this year. Direct Pay is a free online tool that may be used either for tax payments or quarterly tax amounts.
The IRS suggested that taxpayers should go to irs.gov/directpay and learn about this method. The tax payments may be scheduled from your bank or savings account up to 30 days in advance.
As of February 26, the IRS reports that it has received over 50 million returns. There are 40 million refunds that add up to approximately $125 billion.
There were over 158 million visits during tax season to www.irs.gov. The use of the IRS website is up over 10% this year.
Are taxpayers using professionals or preparing their own returns with software? Over 25 million returns have been filed through tax professionals. Twenty-two million taxpayers chose to prepare the return themselves –most of these taxpayers used commercially-available tax preparation software.
House Passes Expanded College Savings Accounts
The popular “529” college savings accounts enable parents and grandparents to deposit funds that grow tax-free. You may transfer up to five times the $14,000 annual gift exclusion to a Sec. 529 account for one person. A couple could therefore transfer up to 10 gift exclusions or $140,000 this year into a Sec. 529 account. These funds then grow tax-free until the child or grandchild needs to use them for college expenses.
In addition to tax-free growth, Sec. 529 fund distributions for tuition and other approved expenses are also tax-free.
In an effort to enhance the benefits of these college savings plans, the House passed H.R. 529 on February 25 with a strong bipartisan 401-20 margin. It was cosponsored by Reps. Lynn Jenkins (R-KS) and Ron Kind (D-WI).
Rep. Jenkins noted, “This is a good, sensible bill to improve a critical college savings tool to help more hardworking Kansans and Americans save for their children’s education. Today we sent a clear message to all families that Congress supports 529s, we’ll keep them tax-free, and we’ll work together to strengthen them so parents can secure a better future for their children.”
Rep. Kind also spoke approvingly of the passage and stated, “I am pleased to see the House pass this commonsense, bipartisan legislation that will help keep college affordable for families in Wisconsin and across the nation.”
H.R. 529 has three main provisions. The account may be used for acquisition of a computer for a college student. The bill also eliminates an unnecessary aggregation rule. In addition, there are provisions that allow redeposit of 529 funds without taxes or penalties.
Editor’s Note: This bill is a modest expansion of Sec. 529 plans. The comment by Rep. Jenkins is in response to a White House budget proposal to limit tax-free distributions from 529 plans. Because there is strong popular support for the college savings plan, the White House withdrew that proposal. Passage of this bill demonstrates strong bipartisan support for both 529 plans and college education. It also highlights the basic challenge of tax reform – there is a strong constituency or support base for all tax benefits. That support base will mobilize when any benefit is perceived to be threatened.
FINANCES
Between 1990 and 2010, the average stock return was about 6%. While there was a very substantial increase during 1990-2000 and decreases during 2002 and 2008, the total return over two decades was approximately 6%.
Longer holding periods have generally resulted in higher total returns. The total stock return for seven decades between 1940 and 2010 was in excess of 10%. Returns for long periods of time have paralleled this amount.
Because many stocks have increased in value over time, you may hold stocks with substantial appreciation. If you're considering a major gift or end-of-year gift, a gift of public company stock to charity provides two major benefits. First, there is a charitable deduction for the value of the stock. Second, the charity does not pay tax on the sale of the stock so you bypass the capital gain.
Two fairly common reasons for making a substantial gift of stock are that you may have sold an appreciated asset with a large capital gain or you have good income. If you have a large gain or substantial income, you may want to offset that gain or income with a charitable deduction through a gift of stock. Because you receive both the charitable deduction and a bypass of capital gains tax, there is a double benefit for your gift of stock.
Lisa Considers a Stock Gift
Lisa was considering a gift of stock. She had purchased stock 10 years ago in a well-known company with many retail stores. With the worldwide expansion of this company, the stock had increased from her original purchase price of $50,000 to a total of $100,000 in value.
Lisa decided to visit with CPA Susan about the potential gift.
Lisa: "Susan, I bought the stock years ago and earlier this year my broker suggested that I sell half of the stock. I sold $50,000 of the $100,000 of the stock. I still have $50,000 left."
Susan: "Under the IRS rules, Lisa, you are required to divide your $50,000 cost basis between the half you sold and the half that remains. That means that half of the gain or $25,000 is going to be reported as income this year. However, if you decide to give the other half to your favorite charity, you will receive a deduction for $50,000. The deduction is based on the value of the stock on the gift date. The IRS calls that value the mean between the high and low sale price on that day. In addition, you will save capitalgains tax because you bypass the gain on the half that you've given to your favorite charity."
Lisa: "That sounds like a great plan. If I make that gift, I'll be able to benefit from a large tax deductionthat will more than offset the tax on my gain. Plus, the charity won't have to pay the tax on my stock when it sells. Finally, my charity will enjoy a very nice major gift."
Bill has Good Income This Year
Another reason for making a stock gift is that you may have a very substantial income that could cause you to pay a large income tax. Bill had purchased stock in a company recommended by his son eight years ago. His son used a computer made by this company and said to his dad that this would be a good stock to own. During that eight-year time, Bill's $15,000 initial investment had grown to a value of $165,000. Bill also had a very good year with a large income and was talking to his CPA Tom about a charitable deduction.
Bill: "Tom, I had a great year this year and I have been thinking about making a charitable gift with my stock in the computer company. It has gone way up in value and now is worth $165,000. I could sure use that deduction."
Tom: "Yes, that would be the right property to give. You will be able to claim a large deduction. Because you have a high income this year, you can take the full write-off. Plus, by giving the stock you bypass the gain. If you later would like to take your tax savings and make another stock investment, that is perfectly fine."
Bill decided to make the gift. While there is a limit of a deduction in one year to 30% of Bill's adjusted gross income, he has a high income this year and is able to take the full charitable deduction.
How to Make a Stock Gift
Most stock is held in an account at a brokerage firm. Relatively few people now wish to hold the actual certificates in their safety deposit box. If you hold actual certificates, you may mail the certificate and a signed stock power in separate envelopes to the charity.
Because most stock is held by the brokerage firm, the stock is transferred directly from the account at the brokerage firm to an account for the charity. For any gift more than $250, the charity will issue a receipt. With that receipt and the information on the stock, CPA Susan and CPA Tom will include IRS Form 8283 with the tax returns for Lisa and Bill. The gift of stock will produce a large deduction that will save huge income taxes this year.
SAVVY LIVING
What are the IRS income tax filing requirements for retirees this tax season? I didn’t have to file last year, but I picked up a little income from a part-time job in 2014 and I’m wondering whether I need to file this year.
Whether or not you are required to file a federal income tax return this year will depend on how much you earned (gross income), the source of that income, your filing status and your age. Your gross income includes all the income you receive that is not exempt from tax, excluding your Social Security benefits, unless you are married and filing separately.
Here’s a rundown of the IRS filing requirements for this tax season. You probably won’t have to file if your 2014 gross income is below the threshold for your age and filing status. However, if your gross income is above the threshold then most likely you will.
Single: $10,150 ($11,700 if you’re 65 or older by Jan. 1, 2015).
Married filing jointly: $20,300 ($21,500 if you or your spouse is 65 or older; or $22,700 if you’re both over 65).
Married filing separately: $3,950 at any age.
Head of household: $13,050 ($14,600 if age 65 or older).
Qualifying widow(er) with dependent child: $16,350 ($17,550 if age 65 or older).
For a detailed breakdown on federal filing requirements as well as information on taxable and nontaxable income, call the IRS (800-829-3676) and request a free copy of the “Tax Guide for Seniors” (publication 554) or go to irs.gov/pub/irs-pdf/p554.pdf.
Special Requirements
You may be required to file a tax return even though your gross income is below the threshold for your age and filing status. For example, you will need to file if you earned more than $400 in self-employment income during 2014 or if you owe any special taxes to the IRS such as alternative minimum tax (AMT) or IRA tax penalties. In addition, you may want to file if you are due a refund.
Fortunately, the IRS offers a tool on their website that asks a series of questions designed to help you determine if you’re required to file. You can access this tool by going to irs.gov/filing and clicking on “Do you need to file a return?” You can get assistance over the phone by calling the IRS helpline at 800-829-1040 or face-to-face help at a Taxpayer Assistance Center. See irs.gov/localcontacts or call 800-829-1040 to locate a center near you.
Check Your State
Even if you’re not required to file a federal tax return this year, don’t assume that you’re also excused from filing state income taxes. The rules for your state might be very different. Check with your state tax agency before concluding that you don’t need to file. For links to state and local tax agencies see taxadmin.org and click on “State Agencies/Links” on the menu bar.
Tax Prep Assistance
If you find that you do need to file a tax return this year, you can get help through the Tax Counseling for the Elderly (or TCE) program. Sponsored by the IRS, TCE provides free tax preparation and counseling to middle and low-income taxpayers age 60 and older. Call 800-906-9887 or visitirs.treasury.gov/freetaxprep to locate a service near you.
Also check with AARP, a participant in the TCE program that provides free tax preparation at more than 5,000 sites nationwide. To locate an AARP Tax-Aide site call 888-227-7669 or visit aarp.org/findtaxhelp. You don’t have to be an AARP member to use this service.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Lynn: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Lynn were able to create a special trust called a charitable remainder unitrust and receive three very nice benefits.
- Bypass capital gain
- Increase income
- Charitable deduction
Lynn: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
WASHINGTON NEWS
In IR-2015-34 the IRS reminded taxpayers that they may use Direct Pay to make their tax payments this year. Direct Pay is a free online tool that may be used either for tax payments or quarterly tax amounts.
The IRS suggested that taxpayers should go to irs.gov/directpay and learn about this method. The tax payments may be scheduled from your bank or savings account up to 30 days in advance.
As of February 26, the IRS reports that it has received over 50 million returns. There are 40 million refunds that add up to approximately $125 billion.
There were over 158 million visits during tax season to www.irs.gov. The use of the IRS website is up over 10% this year.
Are taxpayers using professionals or preparing their own returns with software? Over 25 million returns have been filed through tax professionals. Twenty-two million taxpayers chose to prepare the return themselves –most of these taxpayers used commercially-available tax preparation software.
House Passes Expanded College Savings Accounts
The popular “529” college savings accounts enable parents and grandparents to deposit funds that grow tax-free. You may transfer up to five times the $14,000 annual gift exclusion to a Sec. 529 account for one person. A couple could therefore transfer up to 10 gift exclusions or $140,000 this year into a Sec. 529 account. These funds then grow tax-free until the child or grandchild needs to use them for college expenses.
In addition to tax-free growth, Sec. 529 fund distributions for tuition and other approved expenses are also tax-free.
In an effort to enhance the benefits of these college savings plans, the House passed H.R. 529 on February 25 with a strong bipartisan 401-20 margin. It was cosponsored by Reps. Lynn Jenkins (R-KS) and Ron Kind (D-WI).
Rep. Jenkins noted, “This is a good, sensible bill to improve a critical college savings tool to help more hardworking Kansans and Americans save for their children’s education. Today we sent a clear message to all families that Congress supports 529s, we’ll keep them tax-free, and we’ll work together to strengthen them so parents can secure a better future for their children.”
Rep. Kind also spoke approvingly of the passage and stated, “I am pleased to see the House pass this commonsense, bipartisan legislation that will help keep college affordable for families in Wisconsin and across the nation.”
H.R. 529 has three main provisions. The account may be used for acquisition of a computer for a college student. The bill also eliminates an unnecessary aggregation rule. In addition, there are provisions that allow redeposit of 529 funds without taxes or penalties.
Editor’s Note: This bill is a modest expansion of Sec. 529 plans. The comment by Rep. Jenkins is in response to a White House budget proposal to limit tax-free distributions from 529 plans. Because there is strong popular support for the college savings plan, the White House withdrew that proposal. Passage of this bill demonstrates strong bipartisan support for both 529 plans and college education. It also highlights the basic challenge of tax reform – there is a strong constituency or support base for all tax benefits. That support base will mobilize when any benefit is perceived to be threatened.
FINANCES
Stocks - Comcast Reports Quarterly Earnings
Comcast Reports Quarterly Earnings
Comcast Corporation (CMCSA) announced its fourth quarter and year-end results on Tuesday, February 24. Facing market changes, the company’s results barely outpaced pre-release estimates.
Comcast reported that quarterly revenue grew 4.8% to $17.7 billion. Full-year revenue grew 6.4% to $68.8 billion.
“2014 was a great year financially, operationally, and strategically for Comcast NBCUniversal,” said Comcast Chairman and CEO Brian L. Roberts. “We continued to execute incredibly well as we accelerated our innovation, launched new products, and brought amazing films, shows and theme park attractions to consumers.”
Earnings per share for the fourth quarter grew 2.8% to $0.74. On a full-year basis, earnings per share grew 25% to $3.20.
Like other cable and traditional media companies, Comcast has faced stiff competition fromstreaming media services like Netflix and Amazon. For example, in 2013 pay-TV companies lost 1.7 million subscribers as a result of competition from such services. This has forced traditional media companies to launch similar streaming services. Comcast has been no different. Its Xfinity Go app is a competitive attempt to keep subscribers and fend off challengers like Netflix and Amazon.
Comcast Corporation (CMCSA) shares ended the week at $59.38.
Domino’s Pizza Revenue Increases
Domino’s Pizza, Inc. (DPZ) announced its fourth quarter results on Tuesday, February 24. While the company’s quarterly profit missed estimates, its revenues exceeded expectations.
Domino’s reported that quarterly revenue increased 13.5% to $643 million. This increase was driven by a domestic same-store sales increase of 11.1%.
“Fundamental strength, with a growing global store base, robust sales and technological innovation, continues to truly drive the business,” said Domino’s President and CEO J. Patrick Doyle. “Franchisees are both energized and financially sound, which is fueling our store reimage program, sales and store growth.”
Net income during the quarter rose 7.5% to $48 million or $0.91 per share. Expectations were for earnings of $0.93 per share.
Domino’s has historically been known—rightly or wrongly—for low quality pizza. The company even admitted several years ago that customers thought its pizza tasted like cardboard. Despite this image, the company has revamped its pizza recipe and thereby helped its reputation with consumers. So far, it seems customers like what they are seeing—and tasting. Along with a domestic same-store sales increase this quarter, Domino’s also reported its 84th consecutive quarter of international same-store sales growth. It’s no wonder the company’s share price has risen 40% over the past year.
Domino’s Pizza, Inc. (DPZ) shares ended the week at $101.53.
Campbell’s Has Lackluster Quarter
Campbell’s Soup Company (CPB) reported its second quarter results on Wednesday, February 25. The company experienced revenue and earnings declines.
Sales during the quarter were $2.23 billion. This was a 2% decline compared to the $2.28 billion generated during the same period last year.
“Over the last three years, we’ve made solid progress advancing our dual mandate to strengthen the core business and at the same time expand into faster growing spaces; however, it has not been enough in this more challenged environment,” said Campbell’s President and CEO Denise Morrison. “After several months of careful study, we’ve announced a significant reorganization of our company creating three new divisions, each with clear portfolio roles.”
The company reported earnings per share during the quarter of $0.66. This was a 13% decrease from $0.76 per share during the comparable period last year.
Campbell’s has spent the last few years looking for a way to reinvigorate its business. Consumers are trending away from traditional brands such as Campbell’s in search of healthier options. This has caused Campbell’s to acquire newer brands and produce new products in an attempt to draw consumers back. As this most recent quarterly report shows, Campbell’s still has a hill to climb. Investors will be watching closely to see if the company can regain some of the market share it lost in recent years.
Campbell’s Soup Company (CPB) shares ended the week at $46.59.
The Dow started the week of 2/23 at 18,141 and closed at 18,133 on 2/27. The S&P 500 started the week at 2,110 and closed at 2,105. The NASDAQ started the week at 4,953 and closed at 4,964.Bonds - Treasury Yields Decline on Fed News
Comcast Corporation (CMCSA) announced its fourth quarter and year-end results on Tuesday, February 24. Facing market changes, the company’s results barely outpaced pre-release estimates.
Comcast reported that quarterly revenue grew 4.8% to $17.7 billion. Full-year revenue grew 6.4% to $68.8 billion.
“2014 was a great year financially, operationally, and strategically for Comcast NBCUniversal,” said Comcast Chairman and CEO Brian L. Roberts. “We continued to execute incredibly well as we accelerated our innovation, launched new products, and brought amazing films, shows and theme park attractions to consumers.”
Earnings per share for the fourth quarter grew 2.8% to $0.74. On a full-year basis, earnings per share grew 25% to $3.20.
Like other cable and traditional media companies, Comcast has faced stiff competition fromstreaming media services like Netflix and Amazon. For example, in 2013 pay-TV companies lost 1.7 million subscribers as a result of competition from such services. This has forced traditional media companies to launch similar streaming services. Comcast has been no different. Its Xfinity Go app is a competitive attempt to keep subscribers and fend off challengers like Netflix and Amazon.
Comcast Corporation (CMCSA) shares ended the week at $59.38.
Domino’s Pizza Revenue Increases
Domino’s Pizza, Inc. (DPZ) announced its fourth quarter results on Tuesday, February 24. While the company’s quarterly profit missed estimates, its revenues exceeded expectations.
Domino’s reported that quarterly revenue increased 13.5% to $643 million. This increase was driven by a domestic same-store sales increase of 11.1%.
“Fundamental strength, with a growing global store base, robust sales and technological innovation, continues to truly drive the business,” said Domino’s President and CEO J. Patrick Doyle. “Franchisees are both energized and financially sound, which is fueling our store reimage program, sales and store growth.”
Net income during the quarter rose 7.5% to $48 million or $0.91 per share. Expectations were for earnings of $0.93 per share.
Domino’s has historically been known—rightly or wrongly—for low quality pizza. The company even admitted several years ago that customers thought its pizza tasted like cardboard. Despite this image, the company has revamped its pizza recipe and thereby helped its reputation with consumers. So far, it seems customers like what they are seeing—and tasting. Along with a domestic same-store sales increase this quarter, Domino’s also reported its 84th consecutive quarter of international same-store sales growth. It’s no wonder the company’s share price has risen 40% over the past year.
Domino’s Pizza, Inc. (DPZ) shares ended the week at $101.53.
Campbell’s Has Lackluster Quarter
Campbell’s Soup Company (CPB) reported its second quarter results on Wednesday, February 25. The company experienced revenue and earnings declines.
Sales during the quarter were $2.23 billion. This was a 2% decline compared to the $2.28 billion generated during the same period last year.
“Over the last three years, we’ve made solid progress advancing our dual mandate to strengthen the core business and at the same time expand into faster growing spaces; however, it has not been enough in this more challenged environment,” said Campbell’s President and CEO Denise Morrison. “After several months of careful study, we’ve announced a significant reorganization of our company creating three new divisions, each with clear portfolio roles.”
The company reported earnings per share during the quarter of $0.66. This was a 13% decrease from $0.76 per share during the comparable period last year.
Campbell’s has spent the last few years looking for a way to reinvigorate its business. Consumers are trending away from traditional brands such as Campbell’s in search of healthier options. This has caused Campbell’s to acquire newer brands and produce new products in an attempt to draw consumers back. As this most recent quarterly report shows, Campbell’s still has a hill to climb. Investors will be watching closely to see if the company can regain some of the market share it lost in recent years.
Campbell’s Soup Company (CPB) shares ended the week at $46.59.
The Dow started the week of 2/23 at 18,141 and closed at 18,133 on 2/27. The S&P 500 started the week at 2,110 and closed at 2,105. The NASDAQ started the week at 4,953 and closed at 4,964.Bonds - Treasury Yields Decline on Fed News
Treasury Yields Decline on Fed News
Treasury yields fell during the week of February 23 after Federal Reserve Chair Janet Yellen indicated the central bank is not locked into a timetable to increase interest rates. A pair of economic reports later in the week revealed that the U.S. economic recovery continues to be fragile.
The big news earlier this week involved two-days of testimony Fed Chair Janet Yellen gave to Congress. During her testimony she stated that she did not see inflation rising to the Fed’s 2% goal. She also indicated that the Fed will not be wedded to a particular timetable on raising interest rates, which have hung close to zero over the past few years. Specifically, Yellen said that the removal of the Fed’s pledge to be “patient” regarding rate increases would not necessarily indicate a rate increase was imminent.
Despite the Fed’s assurances, investors will no doubt import significant meaning to any change in the Fed’s language on rates. “It’s still going to be a big deal when they remove ‘patient’ from their forward-rate guidance, even if it doesn’t mean explicitly that rates are going to rise in two meetings,” said Thomas Simons, a Government-Debt Economist in New York.
Treasury yields this week also responded to a pair of disappointing economic reports. The MNI Chicago business index fell to 45.8 in February. This was a sharp drop from forecasts of 58 and a reading of 59.4 for January.
The Commerce Department also revised U.S. GDP growth downward for the fourth quarter. Instead of the previously reported 2.6%, the revised data showed the U.S. economy expanded at a slower 2.2% rate for the quarter.
The 10-year Treasury note yield finished the week of 2/23 at 2% while the 30-year Treasury note yield finished the week at 2.6%.
CDs and Mortgages - Interest Rates Inch Higher
Treasury yields fell during the week of February 23 after Federal Reserve Chair Janet Yellen indicated the central bank is not locked into a timetable to increase interest rates. A pair of economic reports later in the week revealed that the U.S. economic recovery continues to be fragile.
The big news earlier this week involved two-days of testimony Fed Chair Janet Yellen gave to Congress. During her testimony she stated that she did not see inflation rising to the Fed’s 2% goal. She also indicated that the Fed will not be wedded to a particular timetable on raising interest rates, which have hung close to zero over the past few years. Specifically, Yellen said that the removal of the Fed’s pledge to be “patient” regarding rate increases would not necessarily indicate a rate increase was imminent.
Despite the Fed’s assurances, investors will no doubt import significant meaning to any change in the Fed’s language on rates. “It’s still going to be a big deal when they remove ‘patient’ from their forward-rate guidance, even if it doesn’t mean explicitly that rates are going to rise in two meetings,” said Thomas Simons, a Government-Debt Economist in New York.
Treasury yields this week also responded to a pair of disappointing economic reports. The MNI Chicago business index fell to 45.8 in February. This was a sharp drop from forecasts of 58 and a reading of 59.4 for January.
The Commerce Department also revised U.S. GDP growth downward for the fourth quarter. Instead of the previously reported 2.6%, the revised data showed the U.S. economy expanded at a slower 2.2% rate for the quarter.
The 10-year Treasury note yield finished the week of 2/23 at 2% while the 30-year Treasury note yield finished the week at 2.6%.
CDs and Mortgages - Interest Rates Inch Higher
Interest Rates Inch Higher
Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, February 26. The results show mortgage rates rising this week on rising home sales and values.
The 30-year fixed rate mortgage averaged 3.8% this week. This was up from last week when it averaged 3.76%.
This week, the 15-year fixed rate mortgage averaged 3.07%. This number was an increase from last week when it averaged 3.05%.
“Mortgage rates rose for the third consecutive week in February following solid housing data,” said Len Kiefer, Deputy Chief Economist at Freddie Mac. “New home sales beat market expectations at an annual pace of 481,000 units, down slightly from 482,000 units in December, but up 5.3% from a year ago. Also, the S&P/Case-Shiller National House Price Index rose 4.6% over the 12-months ending in December 2014.”
The money market fund finished the week of 2/23 at 0.4%. The 1-year CD finished at 0.7%.
Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.
Global Church of the Nazarene Foundation
Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, February 26. The results show mortgage rates rising this week on rising home sales and values.
The 30-year fixed rate mortgage averaged 3.8% this week. This was up from last week when it averaged 3.76%.
This week, the 15-year fixed rate mortgage averaged 3.07%. This number was an increase from last week when it averaged 3.05%.
“Mortgage rates rose for the third consecutive week in February following solid housing data,” said Len Kiefer, Deputy Chief Economist at Freddie Mac. “New home sales beat market expectations at an annual pace of 481,000 units, down slightly from 482,000 units in December, but up 5.3% from a year ago. Also, the S&P/Case-Shiller National House Price Index rose 4.6% over the 12-months ending in December 2014.”
The money market fund finished the week of 2/23 at 0.4%. The 1-year CD finished at 0.7%.
Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.
Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
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