Mr. Krabs is right. It is all about making money.

When you get down to it, the basic question everyone has to ask when thinking about investing in a company is simple.

May 01, 2023

SpongeBob was one of my favorites.

The cartoon is aimed at kids, but it subtly (and sometimes not so subtly) makes a lot points aimed at adults. One of the threads of commentary the show makes is on the plight of employees.

If you live under a rock — like SpongeBob’s friend Patrick Star — then you should know that SpongeBob is a fry cook at the Krusty Krab, a fast food restaurant run by the greedy Mr. Krabs.

Mr. Krabs is the personification of capitalist greed. He is shrewd, and all he cares about is money. He serves as a perfect foil to SpongeBob’s character who is foolish, but good-hearted and not motivated by money.

The irony is that while Mr. Krabs is a caricature of a business-owner, businesses exist to make money.

Even in an era of for-more-than-profit companies, organizations still need to have healthy revenues (hopefully leading to profits) in order to fund any charitable goals.

Warren Buffet, one of the most successful investors of the last 50 years looks at his investing in this way.

He wants to know if the company he is investing in is a quality company, and one of the primary ways he measures that is how likely he believes that company is to increase its revenues (and typically profits) over the next decade.

So after investing in three new stocks in the past month, I want to take a page from Warren Buffet’s playbook and take a quick look at how the companies in my portfolio make money, and how much of it they make.

A couple notes. First, I choose stocks in April with the strategy of gaining value through growing dividend payments. Second, all of the information I’m going to go through is historical, and so it doesn’t necessarily guarantee an increase in revenues in the future.

Apple

🍎 Industry: Technology
🍎 Sources of revenue: iPhone, Mac, iPad, Wearables, Home and Accessories, Services
🍎 Revenue 2018 - 2022: $265.5 billion, $260.1 b, $274.5 b, $365.8 b, $394.3 b
🍎 Profit 2018 - 2022: $101.8 billion, $98.4 b, $105.0 b, $152.8 b, $170.8 b
🍎 Future sources of revenue: Augmented reality glasses is rumored to be coming this year, opening up a new platform for the company.

HF Sinclair

🦕 Industry: Crude oil products
🦕 Sources of revenue: Oil refineries, Gasoline and diesel, lubricants, and other oil-derived products
🦕 Revenue 2018 - 2022: $17.7 billion, $17.5 b, $11.2 b, $18.4 b, $38.2 b
🦕 Profit 2018 - 2022: $3.8 billion, $3.6 b, $2.0 b, $2.8 b, $7.5 b
🦕 Future sources of revenue: The company is investing in renewable diesel which is made with recycled animal fats and other plant materials.

Rocket Companies

🚀 Industry: Financial services
🚀 Sources of revenue: Mortgages, Automobile loans, Personal loans, Solar loans
🚀 Revenue 2018 - 2022: $4.2 billion, $5.1 b, $15.7 b, $12.9 b, $5.8 b
🚀 Profit 2020 - 2022: $198 million, $308 m, $46 m
🚀 Future sources of revenue: The loan products offered change depending on market conditions (largely mortgage interest rates).

Steelcase

🪑 Industry: Furniture manufacturing and design
🪑 Sources of revenue: Furniture for classrooms, hospitals, and offices
🪑 Revenue 2018 - 2022: $3.3 billion, $3.7 b, $2.9 b, $2.7 b, $3.2 b
🪑 Profit 2018 - 2022: $79 million, $124 m, $200 m, $26 m, $4 m
🪑 Future sources of revenue: The company is seeking to create office furniture that accommodates the new hybrid work model that many companies are embracing where employees spend work days at home and in the office.

Verizon

📶 Industry: Telecommunications
📶 Sources of revenue: Cellular telephone and internet services, fiber optic home internet services
📶 Revenue 2018 - 2022: $130.9 billion, $131.9 b, $128.3 b, $133.6 b, $136.8 b
📶 Profit: 2018 - 2022: $75.4 billion, $77.1 b, $77.1 b, $77.3 b, $77.7 b
📶 Future sources of revenue: Mobile computing services that are integrated with its network to offer high speed response times for various cloud-computing based needs.

So after looking at the companies I’ve invested in from a revenue perspective, I’m very curious to see how (my employer) Rocket and Steelcase fare in 2023. Financial services and furniture manufacturing and design are both good industries that offer concrete services that are always needed, at least to some degree.

We’ll see where this goes.

In this newsletter, Evan Invests, I explore the world of investing from the perspective of the everyday investor by making small investments every month. Follow along with me as I look to grow my wealth through wise money management and making investments in cryptocurrency, index funds, stocks and more.

Let’s take a quick look at how my portfolio has been performing in the past week.

YTD Invested (Total): $2,096.09

YTD Portfolio Growth: 11.6 percent

→ YTD S&P 500 Growth: 9.0 percent

→ YTD BTC Growth: 77.6 percent

My Portfolio Holdings as of 4/28/23

Apple stock
HF Sinclair stock
Rocket Companies stock
Steelcase stock
Verizon stock
Bitcoin
Fidelity 500 Index Fund
Invesco International Small-Mid Company Fund Class R6
Vanguard High Dividend Yield ETF
Vanguard International Dividend Appreciation Index Fund Admiral Shares
Vanguard Mid-Cap Growth Index Fund Admiral Shares
SPDR Portfolio S&P 500 Growth EFT
iShares S&P SmallCap 600 ETF
Vanguard FTSE Emerging Markets Fund
Invesco S&P 500 Momentum ETF
Vanguard FTSE Developed Markets ETF
Invesco S&P 500 Quality ETF
iShares Core S&P 500 ETF
Vanguard Total Bond Market ETF

I’ll report back next week.

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📨 Connect with me on Twitter @EvanInvests

🚀 My favorite financial tweet from the past week.

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📈 Inspired to begin investing yourself? Use my link to open an account on Robinhood, and we’ll both get between $5 and $200 toward a stock.

Evan Invests