In 2017, Target's dividend yield approached 5% as investors worried about the long-term fate of big-box retailers in the age of Amazon. The company's same-store sales had started declining as more shopping migrated online, and Target's margins dipped as management invested in a digital-focused turnaround plan. Despite these bumps in the road, Target always maintained [...]

The pandemic has caused significant disruption for Churchill Downs' business. The firm's flagship event, the Kentucky Derby, was delayed from early May to September, hurting its horse racing operations (28% of 2019 adjusted EBITDA). Meanwhile, casinos (58%) were forced to close temporarily. And although the online gaming business (14%) has continued growing, Churchill Downs' second-quarter [...]

Solar Senior Capital is an externally managed business development company that invests primarily in loans of private middle market firms to generate income. The company's portfolio is valued at around $500 million and diversified across 215 borrowers in over 115 industries, with an average issuer exposure of less than 0.5% of the portfolio. No industry [...]

BHP is the largest mining company in the world. The firm extracts and processes iron ore (63% of EBITDA), copper (20%), petroleum (10%), and coal (9%). Commodity businesses generally have little control over the selling price of their products and must invest heavily to secure and extract new resources. Coupled with their high fixed costs [...]

In July, Analog Devices announced plans to acquire semiconductor company Maxim for more than $20 billion. Assuming the deal gains approval from regulators and shareholders, it is expected to close by the summer of 2021. From a dividend safety perspective, Analog Devices plans to maintain its existing dividend policy and will continue targeting 7% to 15% annual [...]

Shares of Cisco fell more than 11% on Thursday following the company's latest earnings release. Sales declined 9% last quarter, slightly better than expected, but management is not seeing a V-shaped recovery. CEO Chuck Robbins said the environment feels "very much like it felt 90 days ago" and provided guidance for a somewhat steeper revenue decline [...]

On Tuesday, a federal appeals court issued Qualcomm a favorable ruling, reversing a May 2019 victory for the U.S. Federal Trade Commission which had accused the chipmaker of charging excessive royalty rates for its patents. The 2019 ruling threatened to disrupt the lucrative licensing practices that historically generated over 70% of the company's operating profits. As we discussed in December [...]

PPL's stock rallied 5% today after the firm announced plans to initiate a process to sell its U.K. operations. PPL's U.K. utility business generated 52% of the company's 2019 segment earnings but faced an uncertain longer-term outlook. The current regulatory framework driving PPL's U.K. electricity distribution business ends in 2023, and Britain's energy regulators appear eager to reduce [...]

UGI Corporation has a dividend yield nearly twice its historical five-year average.  Naturally, this is leading some investors to question the safety of UGI’s dividend. So, what’s weighing on the stock?  The biggest concern appears to be the timing of increased leverage shortly before an economic crisis brought upon by an unexpected global pandemic. In 2019 [...]

AT&T reported earnings on July 23, providing a more complete look at how its expansive business is performing during this economic downturn. For the most part, there were no big surprises. Revenue declined by about 9% and EBITDA dipped 6%, driven by a steep pandemic-related slump at WarnerMedia. Content production and theaters were shut down, and the [...]

Philip Morris reported earnings on July 21 and made clear that it remains committed to its dividend despite uncertainties created by the pandemic:  "Our balance sheet and financial position are strong, and our commitment to the dividend remains unwavering."– CFO Emmanuel Babeau As expected, lockdown measures and reduced social gatherings reduced demand for combustible cigarettes, which experienced [...]

Coca-Cola reported earnings on July 21, closing the books on "what has arguably been the toughest and most complex quarter in Coca-Cola history," according to Chairman and CEO James Quincy. As expected, organic sales fell 26% due to pandemic-related challenges in away-from-home markets, which account for about half of Coca-Cola's revenue and include restaurants, bars, cinemas, and [...]

On July 20, Chevron agreed to acquire independent oil and gas producer Noble Energy for $5 billion in an all-stock deal. Chevron will also assume Noble's debt of about $8 billion. We don't expect this deal to materially affect Chevron's dividend profile and are maintaining the firm's Safe Dividend Safety Score. The downturn in energy markets seemed likely to [...]

On Monday, STORE reported that as of July 17 it had received 85% of rent due this month. That's up from 71% in April, 68% in May, and 78% in June. The improved collection rate was driven by higher rent collected from tenants in the restaurant (14% of rent), education (7%), and furniture (6%) sectors. About 40% [...]

Walgreens Boots Alliance reported earnings on July 9, providing a closer look at the pandemic's impact on its business. From March through May, Walgreens' sales actually increased slightly but the firm's adjusted EPS fell 43%. In its core Retail Pharmacy USA segment (about 75% of profits last year), same-store sales grew 3% as consumers continued snapping up [...]