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Recent Tweets

Kellogg Plans to Split Into Three Companies; Payout Expected to be Maintained in Aggregate

Kellogg has announced plans to split into three independent companies, believing that separating its operating segments will provide better autonomy and room for growth while helping its rangebound stock price break higher as investors value each business separately.While details still need to be finalized, including board approval and a favorable ruling from the IRS, the tax-free spinoffs [...]

June 23rd, 2022|Uncategorized|

Altria’s Long-Term Positioning Becomes Fuzzier as Regulators Order Juul’s E-Cigarettes Off U.S. Market

The U.S. Food and Drug Administration (FDA) plans to take Juul's e-cigarettes off the market, the Wall Street Journal reported on Wednesday. Shares of Altria fell as much as 10% on the news. Altria paid $12.8 billion for a 35% stake in Juul in 2018. The Marlboro maker made this investment, which has since been written down [...]

June 22nd, 2022|Uncategorized|

Lancaster’s 59-Year Dividend Growth Streak Unthreatened by Surging Soybean Oil, Wheat Prices

Founded in 1961, Lancaster sells branded frozen dinner rolls and garlic bread, croutons, salad dressings, bottled sauces, and other specialty food products to retailers and restaurants. Compared to its peers, Lancaster has been hit harder by commodity cost inflation due to its higher exposure to dressings, which we estimate account for at least one-third of [...]

June 21st, 2022|Uncategorized|

Softening Appliance Demand Not a Threat to Whirlpool’s Dividend

Demand for refrigerators, dishwashers, laundry machines, and other big-ticket appliances seems likely to slow further in the months ahead following two pandemic-fueled bumper years. Evidence is stacking up that consumers are shifting more of their spending from goods to services, with many households feeling pinched by persistent inflation and rising interest rates. Big-box retailer Target [...]

June 16th, 2022|Uncategorized|

Stanley Black & Decker’s Dividend Remains Secure Despite Supply Chain, Inflation Challenges

Stanley Black & Decker has paid uninterrupted dividends for 146 consecutive years, a streak we expect will continue despite a handful of macro headwinds that have sent shares of the world's largest tool maker slumping over 40% in 2022. Stanley's core portfolio of branded power and hand tools depends on about 100 manufacturing plants and 45 [...]

June 15th, 2022|Uncategorized|

As High Inflation Persists, Clorox’s Dividend Continues to Look Safe

Since our last note on Clorox in February, inflation has accelerated and run hotter than expected. Rising costs have further squeezed earnings and driven the firm's trailing payout ratio to over 100%. Despite the operating environment turning even more challenging than anticipated, we believe Clorox's long-term outlook remains intact, and the company's dividend remains safe. However, [...]

June 15th, 2022|Uncategorized|

Cracker Barrel Battles Surging Food, Wage Costs to Defend Dividend

Cracker Barrel's operating margin sits at roughly half its pre-Covid level, reflecting double-digit commodity and wage inflation along with dine-in traffic that has yet to recover fully from the pandemic's effects. As earnings pressures mount, Cracker Barrel's payout ratio may creep further towards 100%, a level not seen since the onset of the pandemic in [...]

June 14th, 2022|Uncategorized|

STORE Capital’s Optimistic Outlook Remains Intact Despite Slowing Economy

Shares of STORE Capital have trailed the broader market this year, having dropped almost 25%. Rising interest rates and growing anxiety around consumers' financial health seem to be the biggest concerns.While STORE has built a portfolio of nearly 3,000 properties filled primarily with e-commerce-resistant businesses like restaurants and gyms to combat the long-term headwinds of [...]

June 13th, 2022|Uncategorized|

Economic Headwinds Not a Threat to Starbucks’ Dividend

Starbucks shares have fallen nearly 40% this year as inflation and Covid-related lockdowns in China have weighed on the company's profitability and outlook. With no clear end to these economic obstacles, Starbucks has removed guidance for the back half of this fiscal year despite confidence these issues will eventually wane. While Starbucks may need to endure a [...]

May 27th, 2022|Uncategorized|

Oxy’s Dividend Should Continue Being Restored as Balance Sheet Strengthens

Occidental Petroleum (OXY) has used the strong oil price environment to pay down nearly half of the debt it took on in 2019 to fund its pricey, ill-timed acquisition of independent oil and gas producer Anadarko. With net debt falling from about $35 billion nearly two years ago to an expected $20 billion this quarter, [...]

May 25th, 2022|Uncategorized|

Walmart’s Payout Remains Safe Despite Worsening Retail Environment

Shares of Walmart on Tuesday fell more than 11% after a rare earnings miss was reported along with concerns about a deteriorating retail environment, marking the company's largest single-day loss since the infamous Black Monday in 1987. The discount store operator heads into the weekend having lost around 20% of its market value in just [...]

May 20th, 2022|Uncategorized|

Exxon’s Debt Reduction Progress Improves Dividend Safety Profile

With oil prices more than doubling since the beginning of 2021 to over $100 a barrel, Exxon has used its surging cash flow to repay practically all of the debt it took on during the pandemic. As a result, the integrated oil giant's debt to capital ratio, or gearing, has fallen from a peak of [...]

May 20th, 2022|Uncategorized|

Target’s Dividend Remains Strong Despite Souring Retail Environment

Target's stock price dropped a staggering 25% after reporting earnings this week, marking the company's largest single-day loss since the infamous Black Monday in 1987. Almost one-third of the company's market value has been wiped out this week. Adjusted earnings contracted a staggering 40% last quarter despite sales growing a modest 3%, reflecting unexpectedly high [...]

May 20th, 2022|Uncategorized|

Chevron’s Leverage Falls Below Pre-Pandemic Level, Providing More Support for Dividend

Since the start of 2021, oil has surged from $50 per barrel – around the price Chevron needs to cover both its dividend and capital expenditures – to over $100. Oil and gas producers have enjoyed swelling profits over this period, enabling many of them to significantly improve their financial strength following a historically difficult [...]

May 20th, 2022|Uncategorized|

Cisco Hit by Supply Challenges But Long-term Outlook and Dividend Profile Appear Stable

Cisco will be the latest battered tech stock when the market opens Thursday. Shares of the networking giant slumped as much as 15% in after-market trading following the firm's disappointing earnings results and guidance.At the midpoint of guidance, Cisco expects sales in the current quarter to fall roughly 3% year-over-year, missing analyst estimates calling for nearly [...]

May 19th, 2022|Uncategorized|