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McDonald’s Exit of Russia Not Expected to Impact Dividend Policy

McDonald's on Monday announced intentions to sell its Russian business, two months after temporarily suspending operations in the country due to the war in Ukraine. While the humanitarian crisis in Ukraine is tragic and the headlines about McDonald's exit of Russia may create some anxiety for conservative income investors, these issues should not impact the firm's dividend policy. The fast-food chain operates in over 100 countries, and its restaurants in Russia and Ukraine represented only about 2% of system-wide sales in 2021. Maintaining the infrastructure of these locations costs McDonald's about $55 million per month, but that is a very manageable sum until the properties are sold given that the firm generates over $10 billion of operating income annually.

May 17th, 2022|

V.F. Corp’s Outlook Remains Solid Despite Stumbling Share Price

As inflation weighs heavy on consumers' pocketbooks, shares of apparel retailers have fallen nearly 30% this year, almost double the broader market decline.On top of shoppers' stretched budgets, clothing retailers continue to battle shipping and supply challenges exasperated by this year's Covid-related lockdowns in China, the world's largest textile producer.These economic headwinds have pushed shares of V.F. Corp back down to levels last seen during the depths of the pandemic in 2020, when it was unclear if retailers would survive the shuttered economy.

May 13th, 2022|

Philip Morris to Continue Prioritizing Dividend Following $16 Billion Acquisition of Swedish Match

Philip Morris on Wednesday announced plans to acquire Swedish Match in a $16 billion all-cash transaction, marking a major step in the international Marlboro maker's transition to a smoke-free company. While this deal will increase Philip Morris's leverage ratio from about 2x to 3x, its highest level in at least a decade, management reassured investors that they have "an unwavering commitment" to growing the dividend annually. Philip Morris seeks to reduce its payout ratio to around 75% compared to a projected level of 90% in the year ahead, but management does not "put any pressure on when we get there, it's a kind of a long-term vision."

May 12th, 2022|

T. Rowe’s Dividend Looks Safe Despite Performance Headwinds

Shares of T. Rowe Price have slumped nearly 50% since late 2021, sending the stock's dividend yield to levels not seen since the depths of the pandemic and the 2007-09 financial crisis. As one of the world's largest money managers, T. Rowe generates most of its revenue from investment advisory fees charged for managing clients' portfolios. Fees are typically assessed as a percentage of assets under management (AUM).

May 11th, 2022|
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