Franklin Resources (BEN) has raised its dividend every year since 1981 and offers a 4% dividend yield, an all-time high for the stock. While the asset manager's payout continues to look safe, Franklin faces several headwinds that could weigh on its future performance and pace of dividend growth.

The 2014-16 oil crash, regulatory changes, and U.S. tax reform combined to upend the midstream MLP industry in recent years. As a result of these challenges, numerous MLPs have executed substantial corporate restructuring activities, with some converting from partnerships to corporations. Enterprise Products Partners LP (EPD) has long defended its structure as a partnership. After all, unlike many other MLPs, the firm has never had trouble accessing affordable capital and runs its business conservatively. However, management's tune appears to be changing. On December 11, Bloomberg reported that Enterprise's CFO Randy Folwer said at a conference that "there may be an element of inevitability" regarding an eventual corporate conversion as "K-1 island is becoming very exotic." 

Qualcomm (QCOM) has had a volatile year as the firm worked to address the significant legal risks faced by its core patent licensing business, which customers and government agencies accused of charging excess rates. The two major overhangs were a dispute with Apple and an antitrust suit issued against the company by the Federal Trade Commission (FTC). While Qualcomm reached a deal with Apple in April, the FTC won its case against the firm in May. Qualcomm appealed the ruling, which required the business to renegotiate its licensing deals with smartphone manufacturers and allow rival chip makers to use its intellectual property on more reasonable terms. Simply put, the ruling threatens to disrupt the lucrative licensing practices that historically generated over 70% of the company's operating [...]

In February 2019, Gap (GPS) announced plans to separate into two publicly traded companies in 2020, hoping to unlock value from its faster-growing Old Navy brand. Since then, the apparel retailer's performance has deteriorated, and Gap's CEO unexpectedly resigned in November. As a result of the company's persistent performance challenges and weakening fundamentals, the risk of Gap cutting its dividend next year as part of its separation plans has increased. As a result, we are downgrading Gap's Dividend Safety Score from a low Borderline Safe rating to Unsafe. Gap's business consists of more than 3,000 company-owned apparel stores, and about half of its revenue is generated by its Old Navy brand. While Gap's revenue has shrunk by 25% since fiscal 2005 and management is closing [...]

Established in 1889, McCormick (MCK) manufactures and distributes over 16,000 spices, seasoning mixes, condiments, and other flavorful products to the entire food industry – retail outlets, food manufacturers, and foodservice businesses. Some of the company's leading brands include McCormick, French's, Frank's RedHot, Lawry’s, Club House, Zatarain’s, Thai Kitchen, and Simply Asia.

Founded in 1894 in Hershey, Pennsylvania, Hershey (HSY) manufactures and sells chocolate and other confectionery products including gum and mints; baking ingredients such as toppings, beverages, and syrups; and snack items, including spreads, meat snacks, bars, mixes, popcorn, protein bars, and cookies.These products are marketed under over 80 leading brands including Hershey’s, Reese’s, Kisses, Kit Kat, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Payday, Rolo, Twizzlers, York, Ice Breakers, SkinnyPop, Krave, and Bubble Yum. Internationally (the company sells in over 90 countries), the company's brands include Pelon Pelo Rico, IO-IO, Nutrine, Maha Lacto, Jumpin, Sofit, and Tyrrells.

Ryder (R) has paid uninterrupted dividends since 1976 and increased its payout by 10% annually since 2005. However, Ryder recently encountered some challenges, sending its dividend yield above 4% to sit near its all-time high.Ryder's payout ratio is also expected to surge above 100% in the next 12 months due to a projected decline in earnings. Some investors are concerned about the safety of Ryder's dividend, but we believe the company's payout remains secure.

Founded in 1906, Kellogg (K) is one of the world's largest producers of cereals, snacks, and frozen foods. The company also manufactures crackers, toaster pastries, cereal bars, veggie foods, and more. Kellogg's well-known brands include Special K, Corn Flakes, Pop-Tarts, Eggo, Fruit Loops, Rice Krispies, Pringles, Cheez-It, and Nutri-Grain. In April of 2019, the company sold its struggling cookie and fruit snack businesses (about 6% of sales) to double down on investments in the company's core brands.

Founded in 1883, Leggett & Platt (LEG) patented the first steel coil bedspring. The company has since become a diversified manufacturer of engineered components (innersprings, recliner mechanisms, adjustable beds, steel wire, seat frames, carpet cushion, armrests, etc.) used in bedding, furniture, carpet, automobiles, aircraft, and other products around the world.

Founded in 1976, TJX Companies (TJX) has grown into the world’s largest off-price retailer, selling deeply discounted brand name and designer fashions. TJX's prices are generally 20% to 60% below department and specialty stores' regular prices on comparable merchandise.The company’s core customer is a fashion and value conscious female shopper between 25 and 54 years old who makes a middle to upper-middle income. This type of customer usually shops high-end and moderate department and specialty stores, as well as online.The company’s 4,000-plus stores operate under the T.J. Maxx, Marshalls, HomeGoods, Winners, HomeSense, T.K. Maxx, and Sierra (plus several e-commerce sites). TJ Maxx and Marshalls account for the majority of locations.