International Business Machines (IBM) this afternoon reported first-quarter earnings results. So far, business is holding up reasonably well. Management said that about 60% of IBM's revenue is in recurring businesses such as long-term services contracts, software streams, and financing arrangements. In 2008, at the last recession, annuity-like businesses only accounted for around 45% of revenue, suggesting the firm could have greater resiliency in a downturn today. IBM also noted that over 70% of its revenue comes from industries that are expected to be "either moderately or minimally impacted by COVID-19" according to classifications from research firms IDC and Gartner. Examples include financial services, telecom, and the public sector.

Meredith (MDP) suspended its dividend today, citing "significant advertising campaign cancellations and delays." The media company's advertising revenue has taken a major hit since the coronavirus pandemic emerged as businesses across almost every industry have slashed non-core expenses. We downgraded Meredith's Dividend Safety Score to Unsafe on March 31. We had previously downgraded the firm's rating to Borderline Safe last September due to weak prospects and heightened leverage from the Time acquisition. Until today's announcement, Meredith had paid uninterrupted dividends for more than 70 consecutive years.

Formed in 2003, Medical Properties Trust (MPW) is one of the world's largest owners of hospitals with around 400 facilities and more than 40,000 beds. The REIT's properties are leased or mortgaged by hospital operating companies. MPW's largest tenant, Steward Health Care, accounts for close to 25% of its portfolio (down from 38% at the end of 2018). Its next two largest tenants represent 13% and 10%, respectively, and no single property accounts for more than 2.3% of the portfolio. Source: Medical Properties Q419 Supplemental Information Approximately 67% of MPW's are located in the U.S., followed by the U.K. (16%), Germany (7%), and Australia (5%).

In our last General Motors (GM) note on March 19, we wrote the following about the automaker's Borderline Safe Dividend Safety Score: If measures put in place by governments to slow the spread of the coronavirus become more drastic or prolonged, and if economic conditions materially worsen for consumers, then GM's dividend risk profile could need to be reevaluated. Shares of GM have surged more than 40% since then, but the outlook for auto producers has arguably continued to dim. Production shutdowns have been extended, the employment backdrop has become weaker, and demand for big-ticket purchases seems increasingly likely to be deferred for a while after the pandemic subsides.