Phillips 66 (PSX) is a diversified petrochemical company that refines crude oil and natural gas into fuels and petrochemicals, operates gas stations in the U.S. and Europe, and owns stakes in two midstream MLPs that transport fuels. Phillips 66's earnings are very hard to forecast as they depend largely on unpredictable swings in commodity prices (crude oil, natural gas, gasoline, ethylene, etc), which are in turn based on ever-shifting trends in supply and demand. Moreover, the diversified nature of Phillips 66's operations means that fluctuations in commodity prices can have both favorable and unfavorable impacts on the business. For instance, refining can be more profitable when oil prices are low, whereas midstream firms benefit from high oil prices. Nevertheless, it's [...]

Main Street Capital (MAIN) was the only Safe-rated business development company, or BDC, prior to the coronavirus outbreak. Five other BDCs were rated Borderline Safe, and the remaining 30-plus companies have had Unsafe or Very Unsafe Dividend Safety Scores for several years. Since the beginning of March, the VanEck Vectors BDC Income ETF (BIZD), which tracks the overall performance of publicly traded BDCs, has collapsed 46% while the S&P 500 Index has shed 21%. Handing out loans with double-digit yields in a zero interest rate world is a dangerous game that's only magnified with the use of leverage. In 2018, Congress even increased the amount of leverage BDCs can use.Making matters worse, most borrowers who take money from BDCs are relatively small, highly levered companies that aren't able to access [...]

On March 6, we discussed why Chevron appeared to have one of the safest dividends in the energy sector. Days later, the price of oil plunged from around $45 per barrel to below $35 as Saudi Arabia engaged Russia in a price war for market share. At the time, we shared our thoughts that the price of oil could remain very weak for at least a few quarters, if not for more than a year. Since then, a bad situation has only gotten worse. With the coronavirus pandemic suddenly bringing many parts of the economy to a standstill and depressing short-term demand for fuel, last week oil suffered its worst loss since 1991, settling near $20 per barrel. This is an unprecedented environment for oil [...]

In a market filled with uncertainty, McDonald's CEO Chris Kempczinski provided income investors with a vote of assurance during his interview with CNBCtoday:  "The dividend for us is a paramount priority and so there's no changes planned for that." McDonald's is one of the few restaurant stocks positioned to continue its dividend during the coronavirus pandemic. Mr. Kempczinski said that only 50 of the company's 14,000 U.S. restaurants are closed, and that's only because they were located in larger buildings such as offices which are no longer open. McDonald's generates the majority of its business through drive-thru, delivery, and curbside pick-up, positioning it better than most to continue operating. Given people's essential need for food, management expects governments will ask them [...]