LyondellBasell's (LYB) origins date back to the 1950s when breakthrough discoveries were made in synthesizing petrochemicals. Today, LyondellBasell is one of the world’s largest diversified chemical suppliers and refiners. The heart of LyondellBasell's business is converting fossil fuels into plastic resins and other petrochemicals that are sold to manufacturers and eventually turned into food packaging, [...]

The price of oil plummeted as much as 30% last weekend as Saudi Arabia and Russia engaged in a price war that threatens to take market share from higher-cost U.S. shale producers. We analyzed this event in a note here, but the bottom line is that we believe oil prices could now remain at historically weak [...]

Boeing's (BA) timeline for returning its best-selling 737 MAX plans to commercial service likely took another hit this week, as the Federal Aviation Administration is expected to order certain electrical wires relocated inside the jets, accordingto the Wall Street Journal. Meanwhile, the coronavirus is weighing on travel demand and the financial health of Boeing's airline customers. Not [...]

Oil prices plunged as much as 30% last weekend as Saudi Arabia and Russia engaged in a price war that threatens to take market share from higher-cost U.S. shale producers. We analyzed this event in a note here, but the bottom line is that we believe oil prices could now remain at historically weak levels (i.e. [...]

The International Air Transport Association (IATA) now expects the coronavirus to cause the global air transport's 2020 revenue to fall between $63 billion and $113 billion, or as much as 20%.  This is expected to pressure the cash flow of most airlines, which are very sensitive to changes in demand due to their high fixed costs.  While [...]

On February 25, we downgraded Carnival's (CCL) Dividend Safety Score to Borderline Safe. Our full note here is worth reading for more background on Carnival's situation, but in our conclusion, we wrote: Cruise demand will take a hit for some period of time, but barring a major setback, Carnival appears to have the financial strength necessary to ride [...]

Canadian Imperial Bank of Commerce (CM) CEO Victor Dodig was interviewed by BNN Bloomberg this afternoon and gave a strong vote of confidence to the bank's dividend: We've never cut a dividend since 1868. Our goal is to make sure those dividends are flowing...The Canadian investors that invest in our banks rely on those dividends for income. [...]

EQM Midstream Partners, LP (EQM) announced plans to merge with its general partner Equitrans Midstream (ETRN) in an all-stock transaction, continuing the trend of MLP simplifications. Each unit of EQM would be exchanged for 2.44 shares of ETRN stock.  The exchange ratio represents only a 3% premium based on EQM's average price over the 20 days leading up [...]

In August 2019, we published a note about MPLX (MPLX) and some of the challenges weighing on the stock, including low natural gas prices, questionable acquisition decisions, and Marathon Petroleum's (MPC) control over MPLX. One month after our note was published, activist investor Elliott Management pressured Marathon Petroleum to split its conglomerate business up with hopes of unlocking value. [...]

Cisco (CSCO) was founded in 1984 and has grown to become one of the most important technology companies in the world. While the business sells a wide variety of products and services to businesses of all sizes, its main offerings connect computing devices to networks or computer networks with each other. The company’s website provides an overview [...]

On Tuesday, Franklin Resources (BEN) announced plans to acquire rival asset manager Legg Mason (LM) for $4.5 billion. Franklin's assets under management will rise from about $700 billion to $1.5 trillion once the deal closes by the third quarter of 2020, underscoring the significance of this transaction. Fortunately, Franklin's payout ratio, balance sheet, and cash [...]

Founded in 1925 with a product line consisting of just five tractors, Caterpillar (CAT) has grown to become the world’s largest industrial machine maker, with its hands in all major infrastructure industries. The company primarily sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.Caterpillar operates through four business [...]

On February 5, Merck (MRK) announced plans to spin off its Women's Health and Biosimilar divisions, as well as various legacy branded drugs. Combined, these businesses ("NewCo") account for nearly 15% of Merck's revenue. Source: Merck Investor Presentation The spin-off transaction is expected to be completed in the first half of 2021 and will take the form [...]

Founded in 1912 during the dawn of flight, Lockheed Martin (LMT) is the world’s largest defense contractor and supplier of fighter aircraft. Though best known for its F-35 joint strike fighter, Lockheed has four major divisions that combined to generate $60 billion in revenue last year: Aeronautics (40% of sales): designs, manufactures, and services combat aircraft [...]

We are upgrading General Electric's (GE) Dividend Safety Score from Unsafe to Borderline Safe following continued improvement in the firm's cash flow generation and deleveraging progress. In early 2019, GE believed its core industrial operations might burn through as much as $2 billion as the company's turnaround took time to gain momentum. The company's money-losing Power division (about 20% [...]