Shares of Lowe's (LOW) have slumped more than 15% since the home improvement retailer released earnings on May 22, including the stock's worst-ever single-day loss of 12%. The market is notorious for overreacting to short-term results, even for quality dividend kings such as Lowe's. However, the world of retail is also evolving as e-commerce and trade wars could force a record number of store closings this year. Whenever one of my holdings experiences an unusually large decline, I like to investigate the situation to try and assess if I might be missing anything. Let's take a look at why the market was so disappointed with Lowe's and why the firm's long-term outlook appears to remain intact. 

Longtime tobacco investors know a thing or two about the challenges this industry can face. From regulatory pressures to costly settlement agreements, over the years income investors have had to stomach bouts of severe volatility. In fact, Altria's (MO) share price was nearly cut in half in the early 1990s when the Supreme Court ruled that smokers could seek damages against the cigarette industry. The country's major tobacco makers ultimately faced the largest class action lawsuit in U.S. history. Despite these periodic ups and downs, for decades Altria delivered double-digit annualized total returns and has increased its dividend 53 times in the last 49 years.  Many income investors fell in love, and Altria is not surprisingly one of the most popular holdings in [...]

In March 2019, I published a note reviewing Tanger's dividend safety. In my concluding remarks, I had stated the firm's dividend still looked safe, but investors needed to watch the performance of Tanger's tenants (emphasis added): Tanger's operating results have significantly deteriorated in recent years, driven largely by its exposure to troubled apparel retailers. While Tanger's dividend still appears reasonably safe based on the information we know today, investors considering the stock need to closely monitor the health of Tanger's tenants going forward.While additional retailer bankruptcies are already baked into management's 2019 guidance, it's hard to say whether this headwind is cyclical (a few over-leveraged and poorly managed apparel retailers) or secular (e-commerce and shifting consumer shopping preferences reducing the appeal [...]

Opioids are a class of drug that includes prescription pain relievers such as OxyContin and Vicodin, synthetic opioids such as fentanyl (similar to morphine but much more potent), and illegal drug heroin.  In 2017 the U.S. Department of Health and Human Services (HHS) declared a public health emergency to address the national opioid crisis. The HHS believes pharma companies caused a boom in opioid prescriptions throughout the 1990s and 2000s by reassuring healthcare providers that patients would not become addicted to these pain killers.  Increased prescriptions of opioid medications have resulted in an estimated 2.1 million people developing an opioid use disorder, and drug overdose deaths from opioids have skyrocketed in recent years to more than 45,000 in 2017 alone (though only [...]