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 of switches and routers, which are Cisco’s largest product segments and part of its infrastructure platform business segment.  Switches are used in buildings, offices, and data centers to connect devices such as workstations, servers, and phones together on a computer network. They help receive and forward data to the right device. Routers pass along data packets between computer networks to connect wireline and mobile networks [...]

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 flow generation will remain strong. As a result, we expect Franklin to maintain its Very Safe Dividend Safety Score. We estimate the combined company will generate about $1.5 billion of free cash flow while paying out around $500 million of dividends annually. This would put Franklin's payout ratio somewhere between 30% and 40%, a very reasonable level that also remains in line with the firm's [...]

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 segments:  Energy & Transportation (38% of profit): serves oil & gas, power generation, industrial, and transportation marketsConstruction Industries (38%): tied to infrastructure spendingResource Industries (16%): driven by mining and heavy constructionFinancial Products (8%): provides financing for Caterpillar equipment In addition to sales of heavy equipment, approximately 33% of Caterpillar’s revenue is tied to higher-margin aftermarket parts and services. Geographically, about 60% of the firm's revenue is generated outside of [...]

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 of a tax-free distribution to Merck shareholders of a new publicly traded stock in the new company. Whenever a company spins off part of its business and shrinks its remaining earnings base, one of the first questions many income investors have is what will happen to the dividend. Merck has paid uninterrupted dividends for more than two decades, and that trend will continue. Management has [...]

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 as well as military transport planes and unmanned air vehicles. Missiles and Fire Control (16% of sales): provides air and missile defense systems, air-to-ground weapon systems, and ground vehicles Rotary and Mission Systems (26% of sales): builds and services military and commercial helicopters in addition to sea-based combat systems Space Systems (18% of sales): designs and builds satellites, strategic and defensive missile systems, and space transportation systems The [...]

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% of revenue), which builds turbines used by natural gas- and coal-fired power plants to generate electricity, was a primary culprit. 

Founded in 1901 after striking oil in Persia, London-based British Petroleum (BP) is one of the largest integrated oil and gas companies in the world today with operations in over 70 countries. Impressively, BP's daily output of 3.7 million barrels of oil exceeds the yield of all but a handful of nations. Like other oil giants, BP partakes in all aspects of the fossil fuel business. The company's upstream segment (60% of 2018 pretax profit) explores for and produces oil and natural gas, a business which is sensitive to the price of oil. More stable cash flow is generated by BP's downstream activities (31% of pretax profit), which include operating gas stations, refining, and manufacturing petroleum-based products used in packaging, textiles, building [...]

Another quarter, another disappointment. That's been 3M's (MMM) story for much of the past two years, and the trend continued earlier this week. 3M reported fourth-quarter earnings on Tuesday, sending its shares falling by about 6%. The company's stock price is nearly unchanged since 2015, and 3M's dividend yield sits near its highest level since the financial crisis.

Chevron (CVX) was born from the discovery in 1879 of an oilfield near Los Angeles that yielded 25 barrels of oil per day. Today, Chevron is one of the largest oil companies in the world and produces nearly 3 million oil-equivalent barrels each day. The firm's upstream operations (77% of 2018 earnings) explores for, produces, and transports crude oil, natural gas, and liquefied natural gas (LNG). Chevron also owns refineries that use crude oil to make petroleum products such as gasoline, jet fuel, diesel, lubricants, additives, and petrochemicals. The company's downstream operations were responsible for 22% of earnings in 2018. With major operations in over 30 countries and non-U.S. profits accounting for about 68% of the firm's bottom line, Chevron is a [...]

America's first enclosed mall was built in 1956, and the nation hasn't looked back. About 1,500 malls were built in the U.S. from 1956 through 2005, providing hubs for social gathering and shopping throughout America's booming suburbs. By 1975, malls accounted for 50% of U.S. retail dollars spent, representing an impressive 13% of GDP. So much property was developed that by 2017 America  had an estimated 26 square feet of retail for every person in the country, compared with less than 3 square feet per capita in Europe, according to Time. But now, in the age of Amazon, many areas of brick-and-mortar retail, including malls, are being forced to right-size their footprints.