Southern Company's two nuclear reactors under construction in Georgia may face more delays and require $2 billion of additional costs, according to testimony provided earlier this week by an independent monitor of the troubled project. Known as Vogtle Units 3 and 4, these plants are America's first new nuclear reactors built in more than 30 years and have faced a number of major complexities and operational setbacks. The project, which Southern has a 45.7% stake in, was initially expected to be completed in 2016 at a maximum cost of roughly $14 billion. But in-service dates have been delayed over five years and the total budget already exceeds $27 billion.

Last week Merck completed the spinoff of its women's health, biosimilars, and off-patent drugs businesses into the newly formed Organon & Co (OGN).Investors of Merck received one-tenth of a share of Organon common stock for every Merck common share owned, with cash paid in place of any remaining fractional shares.Organon has not declared an official dividend yet, but the company has communicated its long-term plans to pay a dividend with a payout ratio in the low 20% range.

National Health Investors (NHI) on June 3 cut its dividend by 18%. This was in line with the expectation we shared in May that NHI may lower its dividend by up to 25%, reflecting the challenging environment faced by its senior housing and skilled nursing tenants. NHI's dividend cut will save the REIT nearly $40 million annually (about 12% of revenue), providing more flexibility to adjust lease terms for distressed tenants until the industry has seen occupancy levels recover from the pandemic.  Management also noted the potential for asset sales and acquisitions to improve the portfolio's quality. 

The U.S. Supreme Court on Tuesday denied Johnson & Johnson's request to appeal a 2018 ruling in Missouri that its talc-based baby powders helped cause ovarian cancer, keeping the healthcare giant on the hook to pay $2.1 billion to 22 women. This eye-popping payout may seem especially alarming since J&J at the end of 2020 faced claims from 25,000 other plaintiffs (up from 17,900 in 2019) making similar allegations about the firm's body powders. Coupled with an expected liability of around $5 billion to settle litigation related to Johnson & Johnson's role in the opioid crisis, some investors wonder if these legal costs could balloon enough to threaten the dividend. Despite this week's setback, which highlights the wide range of liability outcomes [...]