In March, we discussed the various financial and political challenges facing Wells Fargo (WFC) and the U.S. banking industry due to the COVID-19 pandemic. We concluded that the outlook for dividends had become much blurrier, supporting the Borderline Safe Dividend Safety Scores placed on many banks. Please see our note here for complete background information.  Investing in banks is complicated enough when times are good. Today, investors must grapple with uncertain political and financial pressures that have potential to interfere with dividend payouts. Banks appear to remain in good shape today, but the environment is evolving quickly. The fate of some of their dividends, at least in the short term, could depend on how much caution and help for the community regulators and management teams [...]

Leggett & Platt (LEG) delivered a positive surprise for income investors today: the dividend is being maintained. As we discussed on May 6, the company's payout looked to possibly be in peril due to the coronavirus pandemic. Mattress store closures and idled automotive manufacturing plants drove a 60% decline in Leggett & Platt's revenue in the first week of April. Sales were still down 45% in the third week of April. For perspective, the company's sales never fell more than 30% any given quarter during the 2007-09 financial crisis.  This was especially bad timing because Leggett & Platt was in the middle of deleveraging following a large acquisition in January 2019. As part of this deal, the firm needed to increase the size [...]

Cisco's (CSCO) CEO Chuck Robbins recently described the current environment as "the greatest financial crisis in our lifetime," so it's no surprise that many companies are tightening up their budgets. On Wednesday, market research firm Gartner updated its global IT spending forecast for 2020 and now projects a drop of 8% versus prior expectations calling for a 3.4% increase, according to The Wall Street Journal. Given this backdrop, Cisco (CSCO) delivered better-than-feared earnings on May 13, and we continue to believe that the network-equipment giant remains deserving of its Very Safe Dividend Safety Score. The pandemic has had a mixed impact on Cisco. The firm's revenue fell 8% last quarter, driven by at 15% decline in Infrastructure Platforms (58% of sales). This segment primarily sells [...]

Whirlpool (WHR) reported earnings on April 30 and provided investors with a first glimpse into the impacts of the pandemic on sales in the home appliance maker's two most important regions, the U.S. (54% of 2019 revenue) and Europe (21%). Both regions saw sharp drop-offs in retail sales in March as people began to stay home and stores closed. Demand has since started to recover, albeit slowly. In Italy, demand bottomed out at negative 67% year-over-year in mid-March but has improved each week since. Similar trends were observed elsewhere in Europe.