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Recent Tweets

Exxon’s Dividend Hinges on Oil Rebound and Management’s Tolerance of Higher Leverage

None of the oil majors can cover their capital spending and dividends at today's oil price, even after slashing their investment plans. Oil needs to be closer to $50 to $60 per barrel for these companies to breakeven on their obligations, according to data from Bloomberg. Source: Bloomberg, U.S. Energy Information Administration, Simply Safe Dividends The [...]

May 29th, 2020|Uncategorized|

AbbVie Begins Path to Strengthening Dividend Profile After Closing Allergan Acquisition

Shares of AbbVie (ABBV) have had a dividend yield above 5% for most of the past year, reflecting uncertainty about the biopharma company's growth profile. AbbVie's rheumatoid arthritis drug Humira, which in 2019 accounted for over 55% of sales and an even greater share of profits, loses exclusivity in the U.S. in 2023. That long-term [...]

May 28th, 2020|Uncategorized|

NHI Will Decide Dividend’s Fate in June as Largest Tenants Work Through COVID-19 Headwinds

On April 13, we discussed the challenges facing National Health Investors (NHI) due to the COVID-19 crisis:  Overall, the pandemic has increased NHI's risk profile. The REIT has some of the highest exposure to senior housing and skilled nursing, two areas of healthcare that could face the most pressure from the coronavirus outbreak.Coupled with NHI's small scale [...]

May 27th, 2020|Uncategorized|

Polaris Amends Credit Agreement, Maintains Dividend, and Expresses Optimism for Recovery

Polaris had good news for dividend investors yesterday when the company announced its regular quarterly payout and shared a brief business update. Earlier this month, we cited concerns about Polaris' leverage ratio (total debt to EBITDA) rising as cash flow declined due to closed dealerships, supply chain disruptions, and high unemployment crimping demand for the firm's products. The immediate [...]

May 27th, 2020|Uncategorized|

Altria Faces Long-term Growth Uncertainties But Says Dividend Remains a Top Priority

Altria (MO) shares have slumped over 20% since December 2018 when management announced plans to pay $12.8 billion for a 35% stake in e-vapor leader Juul. During that period, international cigarette manufacturer Philip Morris has seen its stock price appreciate about 7%, and the S&P 500 has gained 22%. Put simply, Altria's untimely investment in [...]

May 23rd, 2020|Uncategorized|

TJX Officially Suspends Dividend But Commits to Resuming Payouts Once Conditions Stabilize

TJX Companies (TJX) reported earnings on Thursday and officially suspended its dividend through at least the second quarter. The off-price retailer closed all of its stores and online businesses in mid-March, resulting in an unprecedented decline in sales and cash flow. On March 20, we downgraded TJX's Dividend Safety Score to Borderline Safe given risk that stores would stay closed for [...]

May 22nd, 2020|Uncategorized|

Medtronic Increases Dividend 7% Despite Major Decline in Procedures

Medtronic (MDT) reported earnings on Thursday. The medical device company faced a very challenging operating environment but announced plans to increase its dividend by 7%, marking its 43rd consecutive year of payout raises. As expected, the coronavirus crisis caused significant disruption for Medtronic's customers (hospitals, surgical centers, other care facilities). Procedure volumes plunged as health care systems [...]

May 22nd, 2020|Uncategorized|

Falling Occupancy, Rising Expenses Increase Pressure on CoreCivic’s Dividend

CoreCivic (CXW) is one of the largest private prison operators in America. The REIT generates 85% of its net operating income (NOI) from managing 50 correctional and detention facilities. CoreCivic also leases properties to government agencies (10% of NOI) and operates residential reentry facilities (5%). Though somewhat controversial, managing prisons has historically been a predictable business. [...]

May 21st, 2020|Uncategorized|

GEO Says It’s Committed to Dividend For Now But Safety Profile is Fragile

GEO Group (GEO) and CoreCivic (CXW) operate over 80% of America's privately managed prison facilities. GEO derives about 64% of its revenue from managing correctional and detention facilities for federal and state government agencies. Another 25% of the business is from operating community reentry centers and youth treatment facilities, with the remaining 11% from providing [...]

May 21st, 2020|Uncategorized|

V.F. Corp Remains Committed to Dividend Despite Sales Plunge

In March, we discussed the pandemic-related challenges facing V.F. Corp (VFC) and the uncertainty they created for the global apparel company's dividend.  V.F. Corp reported earnings on May 15 and reassured its shareholders that the dividend remains a priority, even though free cash flow is no longer expected to cover the payout this year.   We do, however, remain [...]

May 19th, 2020|Uncategorized|

Wells Fargo’s Dividend Looks Increasingly Fragile

In March, we discussed the various financial and political challenges facing Wells Fargo (WFC) and the U.S. banking industry due to the COVID-19 pandemic. We concluded that the outlook for dividends had become much blurrier, supporting the Borderline Safe Dividend Safety Scores placed on many banks. Please see our note here for complete background information.  Investing in banks is [...]

May 15th, 2020|Uncategorized|

Leggett & Platt Maintains Dividend

Leggett & Platt (LEG) delivered a positive surprise for income investors today: the dividend is being maintained. As we discussed on May 6, the company's payout looked to possibly be in peril due to the coronavirus pandemic. Mattress store closures and idled automotive manufacturing plants drove a 60% decline in Leggett & Platt's revenue in the first week [...]

May 15th, 2020|Uncategorized|

Cisco’s Dividend Remains Solid Following Earnings Report

Cisco's (CSCO) CEO Chuck Robbins recently described the current environment as "the greatest financial crisis in our lifetime," so it's no surprise that many companies are tightening up their budgets. On Wednesday, market research firm Gartner updated its global IT spending forecast for 2020 and now projects a drop of 8% versus prior expectations calling [...]

May 14th, 2020|Uncategorized|

Whirlpool’s Dividend Looks Safe, But Severity of Downturn Looms Large

Whirlpool (WHR) reported earnings on April 30 and provided investors with a first glimpse into the impacts of the pandemic on sales in the home appliance maker's two most important regions, the U.S. (54% of 2019 revenue) and Europe (21%). Both regions saw sharp drop-offs in retail sales in March as people began to stay home and [...]

May 14th, 2020|Uncategorized|

Extended Lockdowns Increase Risk Profile of Urstadt Biddle’s Dividend

On April 8, we discussed the coronavirus-related challenges facing Urstadt Biddle (UBA). Our primary concerns were the firm's small size (only 81 properties), concentrated operations in ground zero of the pandemic (New York), relatively high payout ratio entering the crisis (80% to 90%), and signs that numerous tenants (e.g. Staples) may skip their rent. More news has [...]

May 14th, 2020|Uncategorized|