Financial Portfolio Analysis: Investment Overview and Stock Analysis

This project provides a comprehensive analysis of financial portfolios, focusing on investment strategies and stock selection. It begins with an investment overview, emphasizing the dividend growth strategy as a key approach for selecting stocks with stable dividend histories and growth prospects. The project outlines specific criteria for stock selection, including long-term market advantages, consistent above-average returns, strong financials, aligned management, profitable growth, and justifiable valuations. It then analyzes three companies: Brookfield Asset Management (BAM), Alphabet (GOOGL), and Starbucks Corporation (SBUX), evaluating their financial strengths and potential for market outperformance. The analysis includes stock risk and return assessment, correlation coefficients, and portfolio optimization, culminating in a bibliography of relevant sources. This project offers valuable insights into building a diversified and potentially high-performing investment portfolio.

Financial
Management
Portfolio Analysis

Investment Analysis
• Investment Overview
• Criteria for Stock Selection
• Company Analysis
• Stock Analysis
• Portfolio Analysis

Investment Overview
• Investment in stock markets could provide investors an opportunity to earn a sound risk
return ratio along with the help of gaining additional amount of exposure to various
global companies.
• It was found out that only about 15% of the actively managed funds had in turn could
only manage to beat the benchmark index. On the other hand, retail and single investors
could hardly beat the market as a whole as charted by JP Morgan Company (How to Invest
in the Stock Market, 2020).
• Dividend Growth Strategy of Investment is considered as the best and optimum strategy
for selecting stocks that would be giving the investors a regular flow of income.
• Companies that have a stable and consistent amount of dividend history, along with a
stable dividend payout ratio and an optimum growth prospects have been well
considered for selection process.

Investment Analysis

Criteria for Stock Selection
• The key set of criteria that were placed for the stocks were as follows:
• Criteria 1: The Company does get advantage from long-term market run and has considerably a
lesser amount of risk.
• Criteria 2: The analyzed company must generate above-average return and the same must be
consistent.
• Criteria 3: Strong Financials of the company in the financial trend period analyzed.
• Criteria 4: The tenure of management of company should be aligned with the profitability of the
company.
• Criteria 5: Profitable Growth is seen in the company creating value for the company.
• Criteria 6: The valuation of the company is justifiable.

Two Content Layout with Table
• First bullet point here
• Second bullet point here
• Third bullet point here
Class Group 1 Group 2
Class 1 82 95
Class 2 76 88
Class 3 84 90

Company Analysis
• The considered companies are reasonably valued and are having a sound risk-return
basis and are well meeting the above set criteria. It is expected that the analyzed
companies does well beat the market as they have done in the past so that the
portfolio build would be able to earn a consistent amount of return with the lowest
possible risk (Investment tip: Merits and risks of investing in US equity market, 2020).
• Brookfield Asset Management (BAM)
• Alphabet (GOOGL)
• Starbucks Corporation (SBUX)

Brookfield Asset Management (BAM)
• The Canadian Financial Firm is an asset management firm that specializes in a range
of managing real estate services like property, infrastructure assets and renewable
form of energy.
• In the last 20 year of time period the company has evolved and has shown a rapid
growth and this is the key reason why the company is currently having around $500
Billion of Assets under Management.

Alphabet (GOOGL)
• The company considerably has the strongest financials in terms of sound balance sheet that is
having around $120 Billion of investment in the Cash and Cash Equivalents and is having a
meagre amount of $4 Billion in its total debt when compared to the Cash Balance of the
company.
• The EBITDA margin that the company had reported for the year was around 15% and has been
growing for the company at consistent rate (MSN Money, 2020).

Starbucks Corporation (SBUX)
• The coffee giant company Starbucks has well
transitioned its operations from a growth stock
into a value stock after many years of market-
crushing business performance.
• The company is having a saturated market in the
North America and Starbucks is well focusing on
expanding it globally with a specific focus of its
operation base in the China. The increasing
population of China that is massive population
base of $1.4 Billion and increasing middle class,
would be allowing the management of the
Starbucks to eventually have sound base in China.

Stock Analysis
• Stock Risk and Return
• Correlation Coefficient
Risk and Return Analysis
Particulars GOOGL BAM SBUX
Mean 1.61% 1.44% 1.83%
Variance 0.44% 0.25% 0.32%
Standard Deviation 6.61% 5.01% 5.65%
Correlation Coefficient GOOGL BAM SBUX
GOOGL 1.00 0.33 0.28
BAM 0.33 1.00 0.24
SBUX 0.28 0.24 1.00
Portfolio Optimization
Portfolio Optimizer
Stocks Weight (%) Return (%)
GOOGL 5.00% 1.61%
BAM 25.00% 1.44%
SBUX 70.00% 1.83%
Weight 100.00%
Return 1.72%
Stdev. 0.90%
Rf 1.69%
Sharp Ratio 1.75

Bibliography
• Brookfield Asset Management Inc. (BAM) Stock Analysis & News. (2020). Retrieved 22 February
2020, from https://seekingalpha.com/symbol/BAM
• GOOG - Research and Analysis for ALPHABET INC. - MSN Money. (2020). Retrieved 22 February
2020, from https://www.msn.com/en-us/money/stockdetails/analysis/nas-goog/fi-a1u3p2
• Paul R. La Monica, C. (2020) The Dow and Nasdaq are approaching big milestones. Is it too late to
invest?, CNN. Available at: https://edition.cnn.com/2020/02/19/investing/dow-nasdaq-stock-
market/index.html (Accessed: 22 February 2020).
• Ratings, A., Chart, A., Trades, I., Ownership, I., Chain, O., & Filings, S. et al. (2020). BAM Stock
Price, Forecast & News (Brookfield Asset Management). Retrieved 22 February 2020, from
https://www.marketbeat.com/stocks/NYSE/BAM/
• SBUX | Starbucks Corp. Financial Statements - WSJ. (2020). Retrieved 22 February 2020, from
https://www.wsj.com/market-data/quotes/SBUX/financials