3M on Monday provided 2022 financial guidance and a strategic update on its sprawling businesses. The industrial conglomerate's presentation contained few surprises or shifts in strategy. But management did not offer many updates on the biggest issue looming over 3M: legal liabilities tied to the firm's legacy PFAS chemicals and military earplugs. 3M manufactured PFAS from the 1950s through the early 2000s to help make a wide variety of consumer and industrial products, including firefighting foams, nonstick coatings, fast food wrappers, and water resistant clothing. These toxic "forever chemicals" have come under significant scrutiny due to environmental and consumer health concerns. 3M faces a growing number of lawsuits across the country accusing the company's PFAS manufacturing sites of polluting water supplies.

Clorox shares were hammered Friday, down nearly 15%, following an earnings report that fell short of analyst expectations.In 2020, the maker of disinfecting wipes and bleach was an early pandemic darling whose stock price soared as demand for sanitization products exceeded supply.Management had predicted this pandemic-induced spike in demand would persist as part of the "new normal," but sales ultimately dropped 8% last quarter. However, when comparing recent sales data to 2019, Clorox's revenues are actually up a solid 19%, suggesting the long-term trajectory of the business remains healthy.

On Tuesday, AT&T provided an update on its plan to separate and combine WarnerMedia with Discovery. Most notably, AT&T elected to structure the separation as a spin-off rather than a so-called exchange offer. This surprised some investors since management seemed to be leaning towards an exchange offer up until last week. An exchange offer would have allowed AT&T holders to swap some, all, or none of their AT&T shares for shares of the new media company. This would provide more flexibility for investors and eliminate a meaningful portion of AT&T's beaten-down shares, but it involves additional complexity to execute. A spin-off is more straightforward: all AT&T investors will receive a 0.24 share of the new media company – Warner Bros. Discovery (WBD) [...]

Discount cigarette maker Vector Group recently announced plans to spin off most of the firm's real estate businesses, including one of the nation's largest brokerage firms, Douglas Elliman.Once the separation takes place on December 29, the real estate business will continue as Douglas Elliman (DOUG) and trade on the NYSE. As part of the transaction, investors will receive one share of Douglas Elliman for every two shares of Vector owned.Vector will maintain its $0.20 per share quarterly dividend, while Douglas will adopt a $0.05 per share quarterly payout. 

3M this week announced plans to separate its food safety business through a tax-friendly combination with Neogen (NEOG), a company specializing in food and animal safety.While this transaction has garnered media attention, food safety only accounts for about 1% of 3M's net sales and will have minimal impact on the firm's overall earnings and payout ratio.Given the limited impact on profits and considering the $1 billion the company will receive as part of the transaction to further strengthen its balance sheet, we are reaffirming 3M's Safe Dividend Safety Score.

In the summer of 2020, Kimco Realty took the drastic step of suspending its dividend when the pandemic sent a severe and sudden shock to the REIT's cash flow while engendering an uncertain recovery.The move seemed prudent at the time for a retail REIT whose tenants mostly require steady foot traffic to generate enough income to pay rent. With many non-essential stores temporarily closed, Kimco's rent collection rate plunged to 60% in April 2020.However, the economy quickly rebounded, powered by emboldened consumers flush with cash and eager to return some normality to life.

The onset of the pandemic in 2020 ignited a number of negative trends, including a dramatic decline in demand for senior housing, given the increased risks of COVID-19 for older generations.Senior housing residents began to move out of these facilities and into the homes of family members, where they believed they were less likely to contract the coronavirus.Some would-be residents postponed moving into senior housing, while others permanently altered their plans. Many facilities implemented temporary move-in restrictions as well to reduce the risk of the virus entering their communities.

This week, Realty Income completed the spin-off of substantially all of its office properties into the newly created Orion Office REIT (ONL), as announced earlier this year.Realty Income stockholders received one share of the Orion Office REIT for every ten shares of Realty Income stock held, with cash received in lieu of any fractional shares.The REIT's intent to spin-off its office properties was made known when the merger with VEREIT was announced earlier this year. Shortly thereafter, we provided details of the merger and our belief that it would have no impact on Realty Income's dividend profile here.As previously noted, offices represented only 3% of Realty's rent but nearly 20% of VEREIT's. Spinning off the office properties of each was a [...]

Yesterday, Compass Minerals surprised investors by cutting its dividend by nearly 80%. This drastic cut is part of a new direction in the company's capital allocation strategy to focus more on growing the business. This strategy shift is primarily driven by the firm's discovery of a significant and sustainable lithium resource identified at its solar evaporation site in Utah. The funds saved from cutting the dividend are expected to be used on developing this lithium site, with production expected to hit the market around 2025.  Lithium is a critical component in rechargeable batteries, which are increasingly in demand with the expanding electric vehicle market. 

Johnson & Johnson announced this morning its intention to separate its consumer health division, which accounts for roughly 16% of sales and includes iconic consumer brands like Band-Aid, Tylenol, and Listerine.The decision to break up the world's largest pharmaceutical conglomerate is rooted in the belief that its business units will have more significant growth opportunities as separate companies where they can more intently focus on their specific customers and markets that have diverged so much through the years.  While this is significant news, Johnson & Johnson will still remain the world's largest healthcare company as it continues on with its pharmaceutical and medical device divisions.