Parker Hannifin on Monday announced plans to acquire British aerospace components maker Meggitt in a cash and debt transaction valued at more than $9 billion. This deal will boost Parker Hannifin's revenue by over 15% and nearly double the size of its aerospace division, which will account for roughly a third of the business going forward. While [...]

Faced with low oil prices, a stretched balance sheet, and growing pressure to invest more in low-carbon energy, BP in August 2020 slashed its dividend by 50% and unveiled a business transformation plan. Following the dividend cut, we maintained BP's Unsafe Dividend Safety Score in recognition of the international oil major's still-elevated leverage and the challenging commodity price environment. [...]

British American Tobacco, or BAT, is one of the world's largest tobacco companies with a broad international reach. The company primarily sells cigarettes (~90% of sales), with oral tobacco and so-called next-generation products accounting for the rest.Through the years, BAT has generated consistent cash flow thanks to the addictive nature of its products, strong brand [...]

Simon's Empire Mall in South Dakota – the largest mall in the state – has seen its retailers' sales exceed their 2019 pre-pandemic level, according to comments made earlier this week by General Manager Dan Gies. Empire Mall's observation supports Simon's expectation that its mall retailers would likely see their sales start topping 2019 levels beginning in [...]

Southern Company's two nuclear reactors under construction in Georgia may face more delays and require $2 billion of additional costs, according to testimony provided earlier this week by an independent monitor of the troubled project. Known as Vogtle Units 3 and 4, these plants are America's first new nuclear reactors built in more than 30 years and [...]

Last week Merck completed the spinoff of its women's health, biosimilars, and off-patent drugs businesses into the newly formed Organon & Co (OGN).Investors of Merck received one-tenth of a share of Organon common stock for every Merck common share owned, with cash paid in place of any remaining fractional shares.Organon has not declared an official dividend yet, [...]

National Health Investors (NHI) on June 3 cut its dividend by 18%. This was in line with the expectation we shared in May that NHI may lower its dividend by up to 25%, reflecting the challenging environment faced by its senior housing and skilled nursing tenants. NHI's dividend cut will save the REIT nearly $40 million annually (about 12% [...]

The U.S. Supreme Court on Tuesday denied Johnson & Johnson's request to appeal a 2018 ruling in Missouri that its talc-based baby powders helped cause ovarian cancer, keeping the healthcare giant on the hook to pay $2.1 billion to 22 women. This eye-popping payout may seem especially alarming since J&J at the end of 2020 [...]

At Exxon's annual meeting Wednesday, shareholders elected at least two of the four board directors (votes are still being counted) nominated by Engine No. 1, an activist investment firm that turned up the heat on the oil major late last year. Engine No. 1, which holds a mere 0.02% stake in Exxon, has criticized the company's poor performance over [...]

April 2021 marked the first monthly occupancy gain in Welltower's senior housing operating (SHO) portfolio since prior to the pandemic. With the vaccine rollout enabling many senior living communities to drop comprehensive move-in restrictions that were implemented last year to reduce the risk of COVID-19 transmission, Welltower is hopeful that the industry has finally bottomed [...]

Activist investor Elliott Management on May 17 published a letter to Duke Energy's board urging the utility to break itself into three separately traded companies. Elliott argued that Duke's sprawling portfolio of utilities, which spans parts of the Midwest, Florida, and the Carolinas, "has burdened shareholders with a conglomerate discount relative to the value of Duke's utility [...]

AT&T on Monday announced plans to combine its WarnerMedia business (around 20% of cash flow) with rival Discovery to form a new publicly traded company. AT&T will maintain its current dividend until the transaction closes, which is expected in mid-2022. Then, management will reduce the dividend to account for the distribution of WarnerMedia to AT&T shareholders, who [...]

National Health Investors (NHI) has kept its dividend covered with cash flow throughout the pandemic despite the challenging environment faced by its senior housing and skilled nursing tenants. The healthcare REIT's rent collection rates averaged over 95% in 2020 and exceeded 94% in the first quarter of 2021. However, Covid's impact continues to be felt [...]

Omega Healthcare continues collecting virtually all rent due despite the crushing blow dealt by the pandemic to many of its skilled nursing tenants (over 80% of revenue). As we discussed last summer, operators of skilled nursing facilities had razor-thin margins heading into the crisis, with around half of them failing to turn a profit. Years of [...]

In May last year when pandemic uncertainties were at their peak, STORE Capital's rent collection rate fell to just 64% as restaurants (14% of pre-pandemic rent), gyms (5%), movie theaters (5%), and other "non-essential" tenants braced for a long downturn.  At this level of rent collections, cash flow no longer covered the dividend.  And management [...]