Recent Tweets

Recent Tweets

An Update on Dividend Safety During the Coronavirus Crisis

Dear customer or prospective member, Matt (my business partner) and I want to provide you with an update on how Simply Safe Dividends is responding to the impact of the coronavirus and the turmoil it has caused in financial markets.  The past several weeks have been a trying time for the U.S. and the world. Our foremost wish is health and safety for you, your families, and the brave men and women serving on the frontlines.  As we all continue grappling with what the future may hold, I wanted to address some of the investing questions you might have. 

March 23rd, 2020|

Lowe’s Remains Open; Dividend Continues to Look Safe

According to the Wall Street Journal, over 38,000 stores around the U.S. have temporarily closed in response to the coronavirus outbreak.  Deemed to sell essential products, Lowe's has not. In fact, two associates we spoke to (including one in Chicago where a shelter-in-place order had gone into effect) described their stores as "slammed" and "really busy". At this point, the greatest risk to Lowe's near-term outlook appears to be the prospect of a recession, which could result in less foot traffic and fewer sales. Lowe's revenue is sensitive to consumer spending. But a recession — perhaps especially one where people are more likely to want to stay home and work around the house — seems unlikely to threaten the dividend.

March 22nd, 2020|

Phillips 66’s Diversified Operations and Balance Sheet Have Potential to Support the Dividend

Phillips 66 (PSX) is a diversified petrochemical company that refines crude oil and natural gas into fuels and petrochemicals, operates gas stations in the U.S. and Europe, and owns stakes in two midstream MLPs that transport fuels. Phillips 66's earnings are very hard to forecast as they depend largely on unpredictable swings in commodity prices (crude oil, natural gas, gasoline, ethylene, etc), which are in turn based on ever-shifting trends in supply and demand. Moreover, the diversified nature of Phillips 66's operations means that fluctuations in commodity prices can have both favorable and unfavorable impacts on the business. For instance, refining can be more profitable when oil prices are low, whereas midstream firms benefit from high oil prices. Nevertheless, it's [...]

March 21st, 2020|

Interest Rates, Oil, and Coronavirus Shutdowns Create Some Uncertainty for Main Street

Main Street Capital (MAIN) was the only Safe-rated business development company, or BDC, prior to the coronavirus outbreak. Five other BDCs were rated Borderline Safe, and the remaining 30-plus companies have had Unsafe or Very Unsafe Dividend Safety Scores for several years. Since the beginning of March, the VanEck Vectors BDC Income ETF (BIZD), which tracks the overall performance of publicly traded BDCs, has collapsed 46% while the S&P 500 Index has shed 21%. Handing out loans with double-digit yields in a zero interest rate world is a dangerous game that's only magnified with the use of leverage. In 2018, Congress even increased the amount of leverage BDCs can use.Making matters worse, most borrowers who take money from BDCs are relatively small, highly levered companies that aren't able to access [...]

March 21st, 2020|
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