ONEOK (OKE) on Thursday declared its regular quarterly dividend payable in May, maintaining its existing payout despite the uncertainty facing the midstream services industry.  "ONEOK's dividend payout is supported by our strong balance sheet and healthy dividend coverage. Holding the dividend at its current level is the prudent financial decision for ONEOK during this time of market uncertainty. Our integrated and extensive assets and financial strength position us well for an industry recovery once energy markets stabilize." – CEO Terry Spencer Previously, on March 11, ONEOK reaffirmed its 2020 guidance for the year despite the plunge in commodity prices and the impact that will have on producer activity. Management also reduced the firm's 2020 capital spending plans from $2.5 billion to $2 billion and [...]

Shares of Franklin Resources (BEN) are down 25% since March 1, significantly underperforming the S&P 500 during that period and pushing Franklin's dividend yield near an all-time high of 7%. Since we published our last note on Franklin in February reviewing the firm's $4.5 billion acquisition of Legg Mason, the coronavirus pandemic has taken the world by storm, and financial markets have been hit hard. Franklin and other asset managers don't do well when the market sinks because management fee revenue is driven by the value of their investments. It's also possible that the market's elevated volatility has further challenged the performance of Franklin's funds, causing more investors to pull their money out.

STORE Capital (STOR) is a triple-net lease REIT with a highly diversified portfolio of tenants that operate in 49 states and over 110 industries. No single tenant accounts for more than 3% of revenue. STORE hasn't provided an update to investors since coronavirus-related shutdowns began in earnest in late March, making it challenging to assess the impact of the pandemic on the firm's tenants. However, our preliminary analysis suggests that STORE's tenants may be significantly impacted by shutdown orders and what will likely be extremely challenging conditions this year for restaurants, gyms, entertainment venues, retailers, and more. As a result, we are downgrading STORE's Dividend Safety Score to Borderline Safe. STORE's rating could be upgraded or further downgraded as the pandemic [...]

Johnson & Johnson (JNJ) on Tuesday reported first-quarter results and, unlike many of its peers which have withdrawn guidance, provided investors with an update on management's financial expectations for 2020. First, the dividend will remain safe and growing. Management announced plans to raise J&J's dividend by 6.3%, marking its 58th consecutive year of increases. The company's diversified healthcare businesses and strong balance sheet position J&J well to ride out the pandemic while continuing to reward income investors. Johnson & Johnson's 2019 revenue was generated from pharmaceuticals (51% of sales), medical devices (32%), and consumer health products (17%).

On March 20, we published a note on Main Street (MAIN) explaining why we believed its regular monthly dividend still appeared safe despite the stock's 14% dividend yield at the time and the looming challenges expected from the coronavirus pandemic. This morning Main Street (MAIN) provided a business update and confirmed that its regular dividend is expected to remain safe for now. The firm had already declared its regular monthly cash dividends through June 2020. Based upon management's current projections, Main Street said it expects the board to approve unchanged regular monthly dividends for the third quarter of 2020 (July, August, September) as well.

What is a landlord to do when many tenants, all at once and to no fault of their own, can't operate their businesses and are strapped for cash? This is the question facing Realty Income (O), whose dividend, having never experienced a cut since the firm's founding in 1969, is under its greatest test ever. Realty Income is set to report earnings on May 4, and management will provide insight into the impacts of the coronavirus pandemic on tenants then. For now, based on our analysis below, we are maintaining Realty Income's Very Safe Dividend Safety Score. However, a downgrade could be in order if evidence arrives that many tenants will suffer mightily for longer than a few months.

The coronavirus pandemic is disrupting many industries in the short term, including senior housing and skilled nursing. National Health Investors (NHI), a healthcare REIT, has high exposure to these markets. Senior housing accounts for nearly 70% of NHI's rental revenue, and skilled nursing facilities contribute another 27%.  Source: NHI Q419 Supplemental Information Based on our analysis below, we are downgrading NHI's Dividend Safety Score to Borderline Safe. Prior to the pandemic, the senior housing and skilled nursing markets were struggling due primarily to a boom in new developments over the last five years which created a glut of supply. As you can see, since 2015 industry occupancy rates have slumped across Independent Living (IL), Assisted Living (AL), and Nursing Care (NC). [...]

The coronavirus pandemic is disrupting many industries in the short term, including senior housing. Welltower (WELL) generates over 60% of its net operating income, or NOI, from this industry (primarily senior apartments, independent living, and assisted living). About two-thirds of the REIT's exposure to senior housing comes from properties Welltower runs directly by partnering with an operator (43% of NOI). This exposes the firm to the ups and downs of the industry more than if Welltower solely collected rent from outside operators.

On March 20, we published a note detailing actions that TJX was taking to strengthen the firm's financial position in the wake of nationwide store closures. One somewhat surprising component of TJX's plan was to reevaluate its dividend, which the retailer has increased every year since going public in 1987. About a week later, the company filed its annual 10-K report with the Securities and Exchange Commission (SEC) and made the following remark: ...the Company does not intend to declare a dividend for the first quarter of fiscal 2021 (calendar year 2020), and we continue to evaluate our dividend program in the near term. Nothing is official yet, and a lot could still change between now and the end of April, when [...]

On April 8, Starbucks (SBUX) provided a business update in response to the coronavirus pandemic.  The company's board of directors recently approved Starbucks' next dividend, which will be paid in May, and management confirmed that they do not anticipate reducing the dividend going forward despite temporary store closures: To further enhance our financial flexibility, we have also temporarily suspended our share repurchase program and are taking steps to defer capital expenditures and reduce discretionary spending. We do not expect to reduce our quarterly dividend. Management's confidence in the dividend stems from the belief that business will likely return to normal within several quarters.