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 costs that pressured the company's profit margins. Other retailers have similarly reported sudden margin declines, leading to the worst week for retailers since the early days of the pandemic.
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 year in 2020. Chevron is no exception. The oil major's net debt to capital ratio, or gearing, has improved from 22.5% a year ago to just 10.8% today. Gearing measures the proportion of a company's financing that is from debt (net of cash) rather than equity.
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 6% growth. Adjusted earnings are also projected to miss consensus by about 13%. On its conference call, Cisco blamed the shortfall on the war in Ukraine (Russia, Belarus and Ukraine account for 1% of total sales) and Covid-related lockdowns in China creating supply problems, emphasizing that the company has not seen a slowdown in demand. Cisco has primarily faced challenges sourcing enough power supplies from [...]
Economic Challenges Unlikely to Disrupt Leggett & Platt’s Dividend
Leggett & Platt is now trading with one of the highest yields offered by a Dividend King at over 4.5%, as fragile economic conditions have weighed on the company's stock.Stubbornly high inflation and continued supply chain disruptions have led to lower sales volumes for the manufacturer of engineered components such as mattress springs and foams, recliner mechanisms, adjustable beds, steel wire, seat frames, carpet cushioning, and armrests. However, Leggett & Platt has successfully passed inflated costs on to customers, resulting in modest earnings growth. This profit stability has been a testament to the firm's strong market positioning, where it boasts a No. 1 or No. 2 market share in most of its operating categories.