With vaccine availability increasing and more economies opening up, Coca-Cola on Monday reported that its total sales volumes in March recovered to levels last seen in 2019 prior to the pandemic. The firm's beverage volumes had declined as much as 25% in April 2020 when numerous countries implemented synchronized lockdowns. While trends slowly improved throughout the year, Coke was still seeing mid-single-digit volume declines through mid-February. The company's return to pre-pandemic volumes is especially impressive given Coke's distribution mix. Nearly half of the firm's revenue is generated from away-from-home channels such as restaurants, convenience stores, movie theaters, and event venues. This part of the business continues improving sequentially but has not yet fully recovered. Even Coke's U.S. restaurant volumes were still down in March [...]

In response to economic uncertainty created by the pandemic, the Federal Reserve last year imposed additional capital preservation measures on America's largest banks. Banks with more than $100 billion in assets – including JPMorgan – were restricted from repurchasing shares until early 2021, and their dividends are still not allowed to be increased. Total buybacks and dividends cannot exceed net income generated over the past year either. These restrictions helped ensure that the country's most important banks maintained adequate capital reserves to survive a potentially severe recession and continue providing loans to struggling customers. With the U.S. economy recovering, the Fed on March 25 announced plans to end its capital distribution restrictions in July for most firms. By then the Fed will [...]

AT&T purchased $27.4 billion of spectrum at the Federal Communications Commission's recent record-setting auction and plans to reduce its leverage ratio to 2.5x in 2024, according to the firm's March 12 business update.Both of these figures missed our expectations. In the analysis we shared in February, we assumed AT&T would spend $20 billion at the spectrum auction and see its leverage ratio fall below 2.3x in 2023 (and even lower in 2024). We said we would consider downgrading AT&T's Dividend Safety Score if its spectrum costs were greater than we anticipated and management showed a willingness to run the business with higher leverage in the short term. With both of those factors materializing and reducing the company's margin for error, we are [...]

PPL since August has been shopping its U.K. utility operations, which generated 53% of the firm's adjusted earnings last year. On Thursday, management finally found a buyer. PPL will sell its U.K. business to National Grid in a transaction valued at $19.4 billion. PPL shares jumped 5% on the news as the assets achieved a higher value than expected; Reuters previously suggested the business could fetch a valuation of up to around $16 billion. Management expects net cash proceeds of $10.2 billion once the deal closes within four months. PPL will use $3.8 billion of these funds to acquire Narragansett Electric, a regulated utility in Rhode Island owned by National Grid. Following these transactions, PPL will consist of regulated utilities across Pennsylvania, Kentucky, [...]