The coronavirus outbreak has prompted a growing number of retailers to temporarily close their stores to help slow the spread of the virus. On March 19, TJX (TJX) announced actions it was taking in response to "the rapidly changing market uncertainty" caused by the global pandemic. The off-price retailer stated it was closing practically all of its stores for [...]
The coronavirus pandemic and oil-price war have weighed on the short-term outlook for Magellan Midstream Partners' (MMP) business. The firm generates about 55% of its operating profits from transporting and storing refined petroleum products such as gasoline and diesel fuel. This has long been a nice cash cow business because demand trends are stable and [...]
In the crosshairs of America's response to the spread of the novel coronavirus, Simon (SPG) announced yesterday that all of its mall locations would close until at least March 29 (about two weeks). Simon is now in an unprecedented situation with a wide range of outcomes and a high level of uncertainty. It's anyone's guess how long [...]
National Retail Properties (NNN) is one of America's oldest triple net lease REITs and has grown its dividend each of the last thirty years. Triple net lease contracts shift most operating expenses (insurance, maintenance, utilities, and property taxes) to the tenant. NNN simply collects rent and typically enjoys highly stable cash flow. However, the coronavirus [...]
A dramatic slowdown in auto sales is becoming more likely as consumers brace for tough times and governments appear increasingly poised to implement drastic measures to slow the spread of the novel coronavirus. Yesterday, GM announced that the automaker would suspend production and idle factories until at least March 30 (about two weeks) in response to the [...]
The unprecedented crash in oil prices, fall in interest rates, and continued slowdown in the global economy due to the novel coronavirus outbreak have rattled the confidence of many bank investors. Depending on their magnitude and duration, these issues have potential to increase pressure on banks to conserve capital, making it a more difficult task [...]
The response by governments worldwide to stop the spread of the novel coronavirus has created unprecedented uncertainty in the restaurant industry. Restrictions are coming into place around the world that require restaurants to close or switch to carryout only. France, Italy, and Spain announced closures over the weekend, and several states (California, Ohio, Illinois, and others) followed suit soon thereafter [...]
The coronavirus pandemic has sapped demand for gasoline and jet fuel as more people worldwide are told to stay home and avoid non-essential travel. It's hard to say how long these restrictions will remain in place, but they have created a cloud of uncertainty over refineries, which primarily process crude oil into conventional and premium [...]
Ventas (VTR) has paid uninterrupted dividends for twenty years, including during the 2007-2009 financial crisis, a time which tested the financial strength of most businesses and forced one-third of dividend-paying S&P 500 companies to cut their payouts. However, Ventas is now facing an unprecedented and unforeseen risk: that the REIT's already weak-performing senior living portfolio, [...]
BP (BP) has the most delicate balance sheet of any of the oil majors, and its leverage finished 2019 above the high end of management's target range. Following last week's unexpected plunge in oil prices, which we believe has potential to keep oil near $35 per barrel or lower (below the firm's breakeven point) for the foreseeable [...]
On Monday, Occidental Petroleum (OXY) announced an 86% cut to its dividend and an approximately $2 billion reduction in capital spending. The catalyst was a 30% decline in the price of oil, the result of a price war initiated by Saudia Arabia. While we didn't foresee a crash in oil prices this severe and thus didn't [...]
Unum (UNM) is a leading provider of disability, group life, and related insurance products. These businesses serve primarily employers' health plans, resulting in long-term relationships that have delivered predictable results; Unum's premiums and earnings have grown at a mid-single digit clip most years, and the company has paid steady dividends since 2004. Source: Unum Investor [...]
EPR Properties (EPR) is one of the more exposed REITs to the coronavirus outbreak. Movie theaters drive 45% of EPR's revenue, and Eat & Play businesses such as TopGolf and Pinstripes account for another 23% of sales. Schools represent 11% of revenue as well. Source: EPR Investor Presentation With social distancing becoming the norm across [...]
Walt Disney's (DIS) business is in the crosshairs of the coronavirus outbreak, with access to theme parks (38% of sales) and movie theaters (studio films account for 16% of sales) appearing increasingly likely to be temporarily cut off. This demand shock comes at a less than ideal time as only a year ago Disney closed [...]
On March 5, Exxon (XOM) reaffirmed its contrarian plans to boost its capital spending in the years ahead with hopes of doubling its earnings power between 2018 and 2025: "Capacity investments have overwhelmed the growth in demand, leading to the down cycle and waiting for demand to catch up. These are typical cycles. Unfortunately, they're hitting multiple [...]