Leggett & Platt (LEG) has weathered many challenges over its 137-year existence while managing to increase its dividend for nearly 50 consecutive years. But the coronavirus pandemic could be a perfect storm for the dividend. After digesting the company's earnings call on Tuesday, we believe there is elevated risk that management could cut the dividend, [...]

Welltower (WELL) reported earnings after the market closed today and announced plans to reduce its dividend by 30%: The financial headwinds resulting from the pandemic will create significant pressure on our near-term cash flow, leading to the difficult, but prudent decision to reduce our quarterly dividend to 70% of pre-COVID levels. Based on WELL's closing price, the [...]

National Retail Properties (NNN) reported earnings yesterday and revealed that a dismal 48% of rent went uncollected in April. May could be even worse than April as shutdowns persist and more businesses grapple with reduced economic activity and no return to normalcy in sight. Troubling NNN is the firm's high exposure to several industries impacted heavily by [...]

On April 10, we published a note reviewing Welltower's (WELL) dividend safety and exposure to the coronavirus pandemic. More information about the state of the senior housing market has trickled in since then, and it's been worse than expected. As a result of these headwinds, we believe Welltower's cash flow may no longer cover its dividend for [...]

Brookfield Property Partners L.P. (BPY) is a major owner, operator, and investor in commercial real estate. In 2019, the firm generated approximately 46% of its net operating income (NOI) from retail assets, 35% from offices, and 19% from equity investments in Brookfield-sponsored real estate opportunity funds. We expect the coronavirus pandemic to impact each of [...]

The coronavirus pandemic creates several challenges for Iron Mountain (IRM). The business seems likely to remain a cash cow and has reasonable liquidity, but these emerging issues have potential to reduce the REIT's financial flexibility. This could be problematic given Iron Mountain's ongoing investments to evolve its business model for the digital world, plus the [...]

W.P. Carey (WPC) reported earnings this morning. Thanks to its diversified footprint, favorable retail exposure, and disciplined underwriting, the REIT collected over 95% of April rents and reiterated support for its dividend: Our capital needs in the near term are minimal, and we continue to expect that our earnings will more than cover our dividend. W.P. Carey [...]

Royal Dutch Shell (RDS.B) announced plans to reduce its dividend by 66%, marking its first cut since World War II. Shares of Shell are down about 13% in early trading. Based on their current price and the new payout, shares have a dividend yield near 4%. Shell had a low (45) Borderline Safe Dividend Safety Score prior to this [...]

Caterpillar (CAT) reported earnings on Tuesday, and the coronavirus pandemic's impact was already evident in its results; sales fell 21% and profits tumbled 39%.  Management said that the impact of COVID-19 on Caterpillar's business "has been significantly more severe and chaotic than any cyclical downturn we had envisioned." But this isn't Caterpillar's first rodeo, and the company [...]

Omnicom (OMC) reported earnings this morning. Despite unprecedented headwinds facing the advertising market due to the coronavirus pandemic, management reaffirmed the company's commitment to its dividend: Our liquidity, balance sheet, and credit ratings remain very strong, and we have no plans to change our dividend policy.  Omnicom recorded 3% organic revenue growth in January and February, but [...]

United Parcel Service (UPS) has paid a stable or growing dividend for nearly 50 years. Despite COVID-19, management on Tuesday said that trend is expected to continue: Our dividend remains a high priority and is a hallmark of our financial strength. We are confident our actions will continue to enable us to fund the business [...]

The outbreak of the novel coronavirus is coming head-to-head with Stryker's 28-year track record of paying uninterrupted dividends. Stryker (SYK) designs and manufactures devices and supplies used in a wide variety of medical procedures. 73% of Stryker's sales are generated in the U.S. In March, the Centers for Medicare and Medicaid Services (CMS) recommended that elective surgeries [...]

On March 19, we wrote the following about Simon's (SPG) Dividend Safety Score:  The risk to Simon's dividend hinges largely on how long store closures persist and how optimistic management is about retail performance once stores reopen. A further downgrade to Unsafe could be issued quickly if closures appear they will last longer or if widespread rent defaults become [...]

In May 2019, we downgraded Tanger's (SKT) Dividend Safety Score to Borderline Safe and wrote: With disruption (and rising store closures) looking more permanent, Tanger's occupancy level, rent rates, and cash flow could come under even greater pressure, and potentially for much longer than management and analysts currently expect...As conservative investors, we prefer to own businesses that have more [...]

Last week, we discussed how the coronavirus pandemic was impacting STORE Capital's (STOR) tenants significantly. Based on STORE's documented tenant mix, we estimated that between 40% and 60% of rent was at risk of deferral. Since then, STORE participated in a call with Morgan Staley to provide an update to investors on the firm's results. In the call, management [...]