Disney and Comcast Bidding War for Fox, Sky: What It Means for Dividend Investors
The short but heated bidding war between Comcast (CMCSA) and Disney (DIS) for most of Twentieth-Century Fox’s (FOX.A) assets is now mostly over. However, the M&A drama isn't truly done, at least not globally. Let’s take a look at Comcast's decision to give up on its bid, why Comcast continues to battle Disney to buy Sky, and what it might mean for dividend investors in both companies.
Deere & Company: Over 20 Years of Uninterrupted Dividends
Founded in 1837, Deere & Company (DE) manufactures and distributes agriculture and turf, and construction and forestry equipment worldwide. Deere has three operating segments: Agriculture and Turf (68% of 2017 revenue): agriculture and turf equipment including large, medium, and utility tractors; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters. This segment also makes related harvesting front-end equipment such as: sugarcane loaders and pull-behind scrapers; tillage, seeding, and application equipment comprising sprayers, and nutrient management and soil preparation machinery. Construction and Forestry (19% of 2017 revenue): builds backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders, loaders, forwarders, and timber harvesters. Financial Services (10% of 2017 revenue): finances the sales [...]
Johnson & Johnson Loses $4.7 Billion Lawsuit: What Dividend Investors Need To Know
On July 12, 2018, a Missouri jury ordered Johnson & Johnson (JNJ) to pay $4.7 billion to 22 women who had accused it of giving them ovarian cancer due to asbestos in its name-brand talcum powders. With over 9,000 additional talcum powder cases pending, some investors are worried that this beloved dividend king (55 straight years of rising dividends) might be facing monstrous legal bills that could potentially put its dividend at risk of a cut or suspension. Let’s take a look at what dividend investors in Johnson & Johnson need to know about this looming liability.
International Paper (IP)
Founded in 1898, International Paper (IP) is the world's largest global paper and packaging company with a No. 1 position in all of its key markets, which span North America, Europe, Latin America, North Africa, India, and Russia. The company owns over 290 facilities and has a total capacity of more than 20 million tons of paper and paper products per year. International Paper operates through three segments: Industrial Packaging (69% of 2017 revenue): manufactures containerboards, which are the linerboards that primarily get used in packaging products such as cardboard boxes. Printing Papers (19% of 2017 revenue): produces printing and writing papers, such as uncoated papers for end use applications, including brochures, pamphlets, greeting cards, books, annual reports, and [...]
An Update On The Wells Fargo Scandals: What Dividend Investors Need To Know
Wells Fargo has been fighting a number of scandals that are impacting its fundamentals. Let's take a look at how the bank's turnaround efforts are going and what they mean for dividend investors. More Scandals Continue To Surface At this point, Wells Fargo has become well-known for its ever-growing list of scandals which include: An independent third-party review of the bank's accounts revealed that the total number of unauthorized accounts opened was actually 3.5 million, 67% more than initially thought. The bank incorrectly charged 800,000 car loan customers for unnecessary insurance that, according to Wells Fargo, could have caused around 20,000 customers to default on their payments and have their vehicles repossessed. Wells Fargo Merchant services apparently overcharged thousands [...]
AT&T: More Merger Drama
On July 12, just one month after the Justice Department's antitrust lawsuit to block AT&T's merger with Time Warner was rejected by U.S. District Court Judge Richard Leon, the Justice Department appealed the ruling. What does this mean for dividend investors? After all, AT&T already merged with Time Warner on June 15. Let's take a closer look to understand if this event is news or noise. In his 172-page opinion issued in June, Judge Leon made it clear that the Department of Justice (DOJ) had failed to meet its burden of proof that the AT&T/Time Warner merger would harm consumers. He even warned that any appeal would be likely to fail, and strongly urged the DOJ to not [...]
Royal Dutch Shell (RDS.A) (RDS.B)
Founded in 1833, Royal Dutch Shell (RDS.B) is one of the world's largest integrated oil companies with operations in over 70 countries. In addition to exploring for and extracting crude oil, natural gas, and natural gas liquids, Royal Dutch Shell owns a number of refineries, distribution terminals, and LNG tankers. The company also has a midstream master limited partnership (MLP) called Shell Midstream Partners (SHLX). This is used to monetize its North American midstream (storage, transportation, and processing) facilities. Shell owns 44% of Shell Midstream's common units, a 2% general partner stake, and its lucrative incentive distribution rights (IDRs). Thanks to this structure, about 70% of Shell Midstream's cash flow comes back to the parent company. Shell operates [...]
Kellogg (K)
Kellogg (K), founded in 1906, is a global manufacturer and marketer of ready-to-eat cereal and convenience foods such as cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods. Kellogg's core brands, which drive almost 40% of its sales in North America, include Kellogg’s, Pop Tarts, Eggo, Froot Loops, and Rice Krispies. Some of its most popular snacks brands are Pringles, Keebler, Cheez-It, and Famous Amos. Source: Kellogg Investor Presentation Kellogg is the world’s leading producer of cereal and toaster pastries, the second largest manufacturer of cookies and crackers, as well as one of the largest producers of savory snacks and frozen foods such as waffles and vegetables. Kellogg primarily sells its products [...]
Vodafone (VOD)
Vodafone (VOD) was founded in 1984 in the U.K. and has quickly grown into one of the world’s largest telecom conglomerates. Along with its joint venture partners, the company offers telephone, internet, cable TV, and wireless mobile services in 72 countries on six continents. In total, Vodafone serves 536 million mobile customers and 20 million broadband customers. Source: Vodafone Annual Report While Vodafone’s global diversification is impressive, the vast majority of its business remains dominated by Europe, which accounts for 75% of its revenue. The company is especially dependent on Germany (25% of sales), the UK (15%), and Italy (13%). Source: Vodafone Annual Report The company’s long-term plan calls for continued diversification into emerging markets, especially India. However, in [...]
Kimco Realty (KIM)
Founded 60 years ago, Kimco Realty (KIM) is one of North America’s largest publicly traded owners and operators of open-air shopping centers. As of March 31, 2018, the company owned interests in 475 U.S. shopping centers comprising 81 million square feet of leasable space primarily concentrated in major metropolitan markets along the coast. The REIT has a total of 8,900 leases with about 3,900 tenants, mostly operating in the grocery (14% of rent), restaurant (13%), home improvement (10%), service (9%), and off-price (9%) industries. Most of its centers are anchored by grocery stores. Here's an example of Kimco's shopping center layout and tenants in Corona, CA: Source: Kimco Investor Presentation Over 80% of the firm's rent comes from centers [...]