AbbVie’s Dividend Safety Score Downgraded to Borderline Safe Following Large Deal to Buy Allergan

AbbVie (ABBV) announced plans to acquire Allergan (ANG) in a deal valued at more than $80 billion, including assumed debt.  As a result of this planned transaction, we are downgrading AbbVie's Dividend Safety Score from a rating of Safe to Borderline Safe. This isn't necessarily a reason to sell the stock if you own it but simply reflects the company's increased financial risk profile, at least over the short term. A dividend cut still seems unlikely, but the deal will cause AbbVie's leverage to rise significantly, driving the downgrade. Management reaffirmed its commitment to the current dividend and plans to deleverage aggressively in the years ahead. As the company's balance sheet improves and it demonstrates continued traction with its larger growth platform of drugs to [...]

June 26th, 2019|

Disney’s Appeal as a Long-term Dividend Growth Stock

Walt Disney founded his namesake company in 1923, and since then the business has gone on to become one of the most iconic brands ever created. Today Walt Disney (DIS) is a leading entertainment company with about $60 billion in revenue.  The media conglomerate is highly diversified and vertically integrated, with four major business segments. Here are the company's sales and profits through the first half of fiscal 2019: Media Networks (38% of sales, 47% of profits): TV programming (ABC TV and cable channels like A&E, History, Lifetime and ABC Family, ESPN network), radio (radio Disney, ESPN radio network), eight television stations. In total the company has about 100 Disney-branded television channels, which are broadcast in 34 languages and 162 countries. [...]

June 19th, 2019|

Is EQM’s Distribution Safe Following MVP Project Delay?

On Monday, EQM Midstream Partners, LP (EQM) announced yet another cost increase and delay to its targeted in-service date for the Mountain Valley Pipeline, or MVP.  The MVP project is by far the firm's most important growth opportunity, representing over two-thirds of EQM's current backlog and accounting for about 15% of firm-wide EBITDA upon completion. The successful completion of the MVP is critical to EQM's ability to maintain a healthy balance sheet and safe distribution. Continued delays and project cost increases have caused investors to worry about the firm's future financial health, causing EQM's dividend yield to double since early 2018 and sit at a lofty 10% today. 

June 19th, 2019|

Southern Company: Uninterrupted Dividends Since 1948

In business for more than 100 years, Southern Company (SO) is a major regulated utility involved in selling electricity and distributing natural gas, primarily across the Southeastern U.S. The firm's eight vertically integrated electric and gas utilities serve customers across Georgia, Alabama, Florida, and Mississippi.  Southern Company’s mix of business and service territories significantly changed after the company's 2016 acquisition of natural gas utility AGL Resources for $12 billion. AGL Resources owns more than 80,000 miles of pipelines and over a dozen storage facilities it uses to transport and distribute natural gas to businesses and households across Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland.  

June 19th, 2019|
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