Large-scale M&A is nothing new to Wall Street, especially in the pharmaceutical industry. However, mega deals are often fraught with risks, so when a dividend stock announces an enormous purchase investors understandably get nervous. On January 3, 2019, Bristol-Myers Squibb (BMY) announced it will be buying biotech giant Celgene (CELG) in a $74 billion deal ($90 billion including debt), one of the largest Pharma mergers in history. BMY's stock price plunged 10% on the news, sending a clear signal that the market isn't so happy that this dividend-paying blue-chip undertaking what could be a risky growth venture. With Bristol-Myers now sporting its highest dividend yield (near 3.5%) in more than five years, let's take a closer look at this acquisition to see [...]

Digital Realty Trust (DLR) is one of the largest publicly traded REITs in the country and supports the data center needs of more than 2,300 customers across industries such as financial services, information technology, and manufacturing. The REIT has a portfolio of 198 data centers in 12 countries and boasts the second highest global market share, behind only Equinix (EQIX) according to analysts at 451 Research. Data centers provide secure, continuously available environments for companies to store and process important electronic information such as transactions and digital communications. Data centers can also serve as hubs for internet communications in major metropolitan areas.

Founded in 1983 as SBC Communications (the company bought AT&T in 2005 and adopted the more famous moniker), AT&T (T) is a telecom and media conglomerate that, after closing on its $85 billion acquisition of Time Warner in June 2018, operates four business segments: Communications (79% of revenue, 75% of segment profits):provides wireless and wireline (phone and internet) services to consumers and businesses, as well as paid video (streaming, U-verse, DirecTV). WarnerMedia (18% of revenue, 23% of segment profits): consists of all Time Warner assets, including Turner Cable TV channels, HBO, and Warner Brothers studios. Latin America (4% of revenue, -2% of segment profits): offers mobile services and satellite TV subscriptions throughout Latin America. Xandr (1% of revenue, 3% of segment profit): AT&T's [...]

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.

PepsiCo (PEP) traces its roots back to 1898 when its original formulation was created by North Carolina pharmacist Caleb Bradham. PepsiCo was formed by the 1965 merger of Pepsi-Cola and snack food giant Frito-Lay (founded in 1932). Today, Pepsi boasts 22 iconic brands with more than $1 billion in annual sales, including Lay’s, Pepsi, Tropicana, Quaker Oats, Gatorade, Naked Juice, Aquafina, Lipton, Doritos, Tostitos, Mountain Dew, Ruffles, Cheetos, and Sierra Mist. While the company is perhaps best known for its name brand sodas, carbonated beverages generate about 24% of revenue while just over half of Pepsi's sales are from high-margin snacks. The company's Frito-Lay and Quaker brands generate nearly half of total operating profits. By geography, about 60% of sales [...]

Founded in 1886 in Atlanta, Georgia, Coca-Cola (KO) has grown to become the world’s largest drink purveyor and the fifth most valuable brand in the world. It markets over 3,900 products through more than 500 brands in over 200 countries. In fact, Coca-Cola is so geographically diversified that the U.S. market accounts for just  20% of its overall sales volumes and 26% of operating income. The vast majority of the company’s sales and profits come from a strong core of $1+ billion brands that the company produces in about 900 plants around the world and markets through 24 million global retail outlets. Currently, just under 70% of Coca-Cola's sales are still from sodas, but the company has aggressively been diversifying [...]

General Mills (GIS) was founded in 1866, owning just a single flour mill at the time. Since then, the company expanded into a number of different industries, including restaurants, toys, and even apparel. However, the business refocused completely on consumer foods in 1995. And in early 2018, the company made a big push into premium pet food with its $8 billion acquisition of Blue Buffalo. Today, General Mills sells a diversified mix of packaged meals, cereal, snacks, baking products, yogurt, and more. The company’s largest brands are Cheerios, Betty Crocker, Yoplait, Pillsbury, Nature Valley, Old El Paso, and Haagen-Dazs. Each of these brands generates over $1 billion in annual sales.

Kimberly-Clark (KMB) was founded in 1872 (incorporated in 1928) and has grown into one of the largest global manufacturers of various tissue and hygiene products, selling its products in more than 175 countries. The company's products have such a wide reach that they are used by one-quarter of the world's population. Some of the company’s key products are disposable diapers, training pants, baby wipes, incontinence care products, tissues, toilet paper, and paper towels. Kimberly-Clark's products are sold under a number of strong global brands, including five billion-dollar brands: Huggies, Kleenex, Cottonelle, Scott, and Kotex. Products are primarily sold to supermarkets, mass merchandisers (Walmart is a 10+% customer), drugstores, and other retail outlets.

The first Starbucks (SBUX) location opened in 1971, and the company has since grown to become the world’s largest coffee purveyor with over 29,000 stores in 78 countries. Starbucks stores sell not just premium coffee but also tea, packaged coffee, juices, bottled water, pastries, and various lunch items. In addition, the company licenses several of its products, which are available in supermarkets and stores, and sells through other up-and-coming brands such as Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, and Ethos. In its most recent fiscal year, the vast majority of Starbucks' sales came from the company’s namesake, company-owned stores. Company-owned stores: 80% of revenue Licensed stores: 11% of revenue

While the stock market, in general, has had a rough few months, many popular tech stocks have been hammered far harder. That includes Apple (AAPL), which saw its share price decline by as much as 40% since hitting an all-time high in October 2018. Apple's fall included a 10% single-day drop on January 2, 2019, when the company shocked Wall Street with a surprise revenue guidance cut for its first quarter of fiscal 2019. Let's take a look at why the market has turned so bearish on this beloved consumer tech giant and, more importantly, determine whether Apple's long-term thesis and dividend growth prospects appear to remain intact.