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Leggett & Platt’s Record Cash Flow Strengthens Dividend Safety Profile

Earlier this year, Leggett & Platt's dividend looked to possibly be in peril due to the COVID-19 pandemic. Organic sales in the second quarter plunged 31% as stores closed and plants idled, and the firm was on the brink of breaching a financial covenant limiting its leverage. In May, Leggett worked with its banks to amend its [...]

November 23rd, 2020|Uncategorized|

V.F. Corp’s Impressive Digital Growth Returns Confidence in Dividend

Last spring, we downgraded V.F. Corp’s Dividend Safety Score from Safe to Borderline Safe. Mandated store closures and anxious shoppers led to a sharp decline in revenues across the industry.  The revival for retailers was uncertain as the severity and length of the pandemic was not clear.   V.F. Corp's cash flow no longer covered its dividend, leading us to wonder [...]

November 20th, 2020|Uncategorized|

Amazon Launches Online Pharmacy; Walgreens’ Dividend Outlook Remains Stable For Now

Shares of Walgreens fell nearly 10% on Tuesday following Amazon's introduction of its new online pharmacy service. Amazon Prime customers can now order prescriptions for home delivery within a couple of days. Amazon stocks most brand name and generic medications, works with most insurance plans, and will have pharmacists available 24/7 by phone. Besides trying to [...]

November 18th, 2020|Uncategorized|

Solid Rent Collection, Additional Federal Support Help NHI’s Outlook

National Health Investors (NHI) has had an Unsafe Dividend Safety Score since May, reflecting the risks posed by its high exposure to senior housing (70% of rental revenue). While NHI does not operate any of its properties, providing some cash flow insulation as long as tenants continue paying rent, many of the REIT's senior housing tenants entered [...]

November 14th, 2020|Uncategorized|

Barring Another Lockdown, Simon’s Cash Flow Can Continue Covering the Dividend For Now

Simon's third-quarter earnings report released on November 9 showed that mall fundamentals remain weak. While the REIT collected 85% of its net billed rents, up from 72% in the prior quarter, Simon's sales were still down 25% year-over-year due to elevated levels of rent deferrals and abatements given to struggling tenants. Tenant bankruptcies and lease expirations also [...]

November 12th, 2020|Uncategorized|

Ventas’ Operating Results Stabilize, Improving Dividend Safety Profile

In June, Ventas cut its dividend by 43% in response to pandemic-driven headwinds impacting its senior housing business (about 50% of net operating income). Occupancy fell to historic lows as restrictions on community access prevented move-ins, and expenses spiked for labor and personal protective equipment. The end result was a dividend that was no longer expected to [...]

November 11th, 2020|Uncategorized|

Pfizer’s COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter

Pfizer announced on Monday its COVID-19 vaccine candidate was found to be more than 90% effective, and no serious safety concerns had been observed. The drugmaker and its German partner BioNTech are the first to release successful results from a major clinical trial of a COVID-19 vaccine, according to Reuters. More data continues to be collected, but Pfizer expects [...]

November 9th, 2020|Uncategorized|

Dominion’s Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares

Dominion made its dividend cut official this week, reducing its fourth-quarter payout by 33% after closing a deal to sell its natural gas transmission and storage business. As we discussed in early July when this news was announced, we are upgrading Dominion's Dividend Safety Score to Safe with the lower dividend now in place. Without its midstream business, Dominion [...]

November 6th, 2020|Uncategorized|

AltaGas’s Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business

AltaGas generates about 60% of its EBITDA from U.S. regulated gas utilities and the remaining 40% from an integrated midstream business in western Canada which connects natural gas liquids and natural gas to various markets. Source: AltaGas Investor Presentation The company in recent years went through a major transformation which culminated in a 56% dividend [...]

November 2nd, 2020|Uncategorized|