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 revenue declined by 3% in March as global shutdowns caused companies to slash their marketing expenditures. The advertising agency expects a severe double-digit decline in sales in the second quarter, and while visibility remains extremely limited, management believes trends in the second half of the year won't be as bad since economies will continue reopening.

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 and support shareowner interest. UPS's first-quarter earnings report showed 5% revenue growth but a 10% decline in adjusted EPS as lower-margin home deliveries swelled to nearly 70% of the firm's package volume by late March (up from around 50% historically). Compared to commercial business deliveries, which fell significantly as nonessential stores were forced to temporarily close, residential packages are smaller (lower price) and require more frequent stops, [...]

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 and other non-essential medical procedures be postponed in order for hospitals to preserve space and equipment for COVID-19 patients. Recently, many hospitals have begun resuming non-essential procedures. But it's possible, if not likely, that many people will continue to avoid hospitals to reduce their risk of exposure to the coronavirus. So far, the shock to sales of many medical supplies has been extraordinary.

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 likely. The outlook for extended store closures and rent collections has materially weakened since then. We expect this to pressure Simon's ability to cover its dividend, protect its balance sheet, and invest in its necessary redevelopment projects. As a result, we are downgrading Simon's Dividend Safety Score from Borderline Safe to Unsafe and believe it would be prudent for management to reduce the dividend substantially, perhaps as soon as [...]

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 in their control and are better aligned with secular themes working in their favor. The apparel retail space does not meet those objectives given its fast pace of change and the rise of online shopping. At the time, Tanger's dividend did not look at risk of an imminent cut. We stated that "outside of a wave of store closures or a potential desire to maintain [...]

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 revealed that only 64% of April rent had been collected so far. For context, normally 100% of rent is collected by mid-month. 90% of the remaining 36% of rent had been granted deferral status with repayment expected within the next year or so. No payments had been forgiven or reduced, but the other 10% of uncollected rent was still in negotiation. May will likely be [...]

Earlier this year, Coca-Cola (KO) announced its 58th consecutive annual dividend increase. When the company reported earnings on April 21, management reaffirmed their commitment to the dividend: We will of course continue to focus on protecting the progress we made on working capital and free cash flow in 2019. And in this context, our capital allocation priorities remain very much focused on investing wisely to support our business operations and continuing to prioritize our dividend. Specifically with regard to the dividend, we currently have no intentions to change our approach. While many consumer staples businesses have seen a surge in demand due to pantry loading, Coca-Cola's outlook is more tempered due to its diversified reach into many different markets worldwide (over 60% [...]

AT&T (T) reported earnings on April 22 and reiterated confidence in its dividend despite the uncertainty caused by COVID-19:  No one knows the full duration and magnitude of the situation, but we have been running several different stress test scenarios with varying degrees of severity. Through it all, we expect to come through this healthy and expect that our cash flow will allow us to continue to invest in growth areas, to provide ample dividend coverage, and allow us to retire debt...We remain committed to our dividend. In fact, we finished last year with our dividend as a percent of free cash flow a little over 50%. And even with the current economic crisis, we expect the payout ratio in 2020 to [...]

Philip Morris (PM) reported earnings on April 21 and reiterated the firm's commitment to its dividend during these uncertain times: We also expect that strong cash flows will exceed cash requirements, including the funding of dividends to which we remain fully committed...Crucially, our organization, liquidity, and balance sheet are strong. We'll continue to protect and support our employees, serve our consumers, and reward our shareholders, which clearly includes our strong commitment to a dividend. The international maker of Marlboro cigarettes and IQOS heated tobacco products expects to remain relatively resilient overall during the pandemic. 

Earlier this month Raytheon completed its all-stock merger with United Technologies, forming Raytheon Technologies (RTX). Several weeks before the merger closed, United Technologies executed the spin-offs of its Otis (OTIS) elevators and Carrier (CARR) building systems businesses. United Technologies stock remained outstanding but the company changed its name to Raytheon Technologies and its ticker symbol to RTX. Since Raytheon Technologies has not yet reported financial results, please note that the financial data shown on our website (and most others) reflects United Technologies' past information, including its dividend.