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Vector to Maintain Dividend Following Real Estate Spin-off But Balance Sheet Remains Weak

Discount cigarette maker Vector Group recently announced plans to spin off most of the firm's real estate businesses, including one of the nation's largest brokerage firms, Douglas Elliman.Once the separation takes place on December 29, the real estate business will continue as Douglas Elliman (DOUG) and trade on the NYSE. As part of the transaction, investors [...]

December 21st, 2021|Uncategorized|

3M’s Food Safety Divestiture Has No Impact on Dividend

3M this week announced plans to separate its food safety business through a tax-friendly combination with Neogen (NEOG), a company specializing in food and animal safety.While this transaction has garnered media attention, food safety only accounts for about 1% of 3M's net sales and will have minimal impact on the firm's overall earnings and payout ratio.Given the [...]

December 17th, 2021|Uncategorized|

Kimco’s Improved Occupancy and Payout Ratio Strengthen Dividend Profile

In the summer of 2020, Kimco Realty took the drastic step of suspending its dividend when the pandemic sent a severe and sudden shock to the REIT's cash flow while engendering an uncertain recovery.The move seemed prudent at the time for a retail REIT whose tenants mostly require steady foot traffic to generate enough income [...]

December 15th, 2021|Uncategorized|

Welltower’s Improving Occupancy Rates Strengthen Dividend Outlook

The onset of the pandemic in 2020 ignited a number of negative trends, including a dramatic decline in demand for senior housing, given the increased risks of COVID-19 for older generations.Senior housing residents began to move out of these facilities and into the homes of family members, where they believed they were less likely to [...]

December 8th, 2021|Uncategorized|

Realty Income Completes Office Properties Spinoff; Dividend Remains Safe

This week, Realty Income completed the spin-off of substantially all of its office properties into the newly created Orion Office REIT (ONL), as announced earlier this year.Realty Income stockholders received one share of the Orion Office REIT for every ten shares of Realty Income stock held, with cash received in lieu of any fractional shares.The [...]

November 17th, 2021|Uncategorized|

Compass Minerals Cuts Dividend by 79% to Focus on Growth

Yesterday, Compass Minerals surprised investors by cutting its dividend by nearly 80%. This drastic cut is part of a new direction in the company's capital allocation strategy to focus more on growing the business. This strategy shift is primarily driven by the firm's discovery of a significant and sustainable lithium resource identified at its solar [...]

November 16th, 2021|Uncategorized|

Johnson & Johnson’s Separation of Consumer Health Business Unlikely to Affect Dividend

Johnson & Johnson announced this morning its intention to separate its consumer health division, which accounts for roughly 16% of sales and includes iconic consumer brands like Band-Aid, Tylenol, and Listerine.The decision to break up the world's largest pharmaceutical conglomerate is rooted in the belief that its business units will have more significant growth opportunities [...]

November 12th, 2021|Uncategorized|

IBM Completes Spinoff of IT Services Business; Dividend Expected to Be Maintained

Earlier this week IBM completed the spinoff of its infrastructure services business, which was named Kyndryl and began trading on Thursday under the ticker symbol KD. IBM investors received 1 KD share for every 5 IBM shares held. Kyndryl shares are not worth much compared to IBM, representing less than 5% of the two firms' [...]

November 5th, 2021|Uncategorized|

Lockheed Slumps on Dampened Growth Outlook But Dividend Remains Safe

Lockheed Martin slumped about 12% on Tuesday following disappointing guidance. Based on the forecast Lockheed provided in August, analysts had expected the defense giant's sales to grow roughly 3% next year. Instead, the firm this week nudged its 2021 revenue guidance lower and now sees sales next year falling about 1.5%. Management then expects low single-digit [...]

October 27th, 2021|Uncategorized|

Verizon’s Customer Growth Supports Growing Dividend and Deleveraging Goals

Shares of telecommunications companies like Verizon have been under pressure this year following record spending in the C-Band spectrum auction.With fierce competition to be a leader in 5G capabilities, telecom companies proved willing to go deeper into debt to ensure they were not left behind with inferior networks.Earlier this year, we wrote a note on Verizon that [...]

October 23rd, 2021|Uncategorized|

Physicians Realty’s Steadily Improving Payout Ratio Strengthens Dividend Safety

Physicians Realty is a self-managed healthcare REIT with ownership in nearly 300 top-tier medical office buildings (MOB's) across 31 states.Since its founding in 2011, the REIT's portfolio has become more evenly balanced between properties located on campus with a hospital, an area it was far more concentrated in earlier on, and off-campus properties found closer [...]

October 22nd, 2021|Uncategorized|

International Paper’s Rebased Dividend Supported by Strong Balance Sheet and Steady Cash Flow

International Paper completed the spin-off of its printing papers business on October 1 and, as expected, rebased its dividend on Tuesday to reflect the firm's lower cash flow. The dividend was reduced by about 10% (better than management's original estimate of a 15% to 20% cut). With the spin-off complete and the rebased dividend in place, we are upgrading [...]

October 14th, 2021|Uncategorized|

Falling Demand for Steel Likely to Reduce Rio Tinto’s Variable Dividend

Last week iron ore prices tumbled 20%, marking the worst week for the mineral since the financial crisis in 2008. The sell-off was stamped by China implementing production limits for steel, the primary use for iron ore, to help ensure blue skies for the upcoming winter Olympics in Beijing.However, global steel demand had already begun [...]

September 20th, 2021|Uncategorized|

Vaccine Mandate for Nursing Home Staff Threatens to Exacerbate Pressure on Omega’s Tenants

The Biden administration last week announced plans to require staff vaccinations within America's Medicare and Medicaid-participating nursing homes, which include the vast majority of Omega's tenants. Most nursing facilities have been trying to incentivize their workers to get vaccinated from the beginning, but only 61% of the nation's staff was vaccinated as of August 15. Already struggling with disruptive [...]

August 26th, 2021|Uncategorized|

Walmart’s E-Commerce Traction Strengthens Long-term Outlook

In recognition of Walmart's improved payout ratio, lower leverage, and e-commerce traction, we are upgrading the discount retailer's Dividend Safety Score from Safe to VerySafe. For years, Walmart's earnings stagnated as labor costs rose faster than sales and more of its product categories lost ground to e-commerce rivals such as Amazon. This trend never endangered Walmart's dividend, but [...]

August 25th, 2021|Uncategorized|