On Monday, Occidental Petroleum (OXY) announced an 86% cut to its dividend and an approximately $2 billion reduction in capital spending. The catalyst was a 30% decline in the price of oil, the result of a price war initiated by Saudia Arabia. While we didn't foresee a crash in oil prices this severe and thus didn't anticipate a dividend cut coming so soon, we did identify several risks with Oxy's dividend that were reflected in our Borderline Safe rating and published in several notes. Specifically, here's what we said in a note on February 28: The bottom line is that debt reduction needs to be a top priority, and organic deleveraging won't come easy with the dividend consuming so much of Oxy's free cash flow. [...]

Unum (UNM) is a leading provider of disability, group life, and related insurance products. These businesses serve primarily employers' health plans, resulting in long-term relationships that have delivered predictable results; Unum's premiums and earnings have grown at a mid-single digit clip most years, and the company has paid steady dividends since 2004. Source: Unum Investor Presentation However, there's more to Unum's story. The company's "Closed Block" division, which accounted for less than 10% of earnings last year, consists mostly of long-term care policies Unum sold decades ago. The firm stopped offering these policies in 2012 but remains on the hook for their future benefit claims.

EPR Properties (EPR) is one of the more exposed REITs to the coronavirus outbreak. Movie theaters drive 45% of EPR's revenue, and Eat & Play businesses such as TopGolf and Pinstripes account for another 23% of sales. Schools represent 11% of revenue as well. Source: EPR Investor Presentation With social distancing becoming the norm across America to help slow down the spread of the novel coronavirus, many of EPR's tenants could be forced to close down temporarily. This would reduce their cash flow and potentially pressure their ability to pay rent.

Walt Disney's (DIS) business is in the crosshairs of the coronavirus outbreak, with access to theme parks (38% of sales) and movie theaters (studio films account for 16% of sales) appearing increasingly likely to be temporarily cut off.  This demand shock comes at a less than ideal time as only a year ago Disney closed its $71 billion acquisition of 21st Century Fox, doubling its leverage in the process. While the company's long-term outlook and brand remain solid, it's less clear if the looming coronavirus-related hit to short-term cash flow could threaten Disney's credit rating and increase pressure on management to pay down debt. In light of this uncertainty and a desire to remain conservative, we are downgrading Disney's Dividend [...]