Costco (COST) was founded in 1976 and pioneered the membership warehouse business model. The company is one of the world’s largest sellers of groceries, alcohol, diamonds, electronics, prescription drugs, tires, gasoline, and even travel services. Costco operates over 775 store locations, mostly in North America.

On September 5, Meredith (MDP) issued weak guidance for the year ahead. The company's leverage profile and payout ratio will now remain elevated for longer than we expected, and execution risk has also increased. As a result, we downgraded Meredith's Dividend Safety Score from Safe to Borderline Safe. Meredith's dividend still seems unlikely to be cut for now and the stock's sharp sell-off feels like a bit of an overreaction, but the company's margin for error has shrunk.  Let's take a closer look at Meredith's outlook and dividend profile.

Meredith (MDP) is one of the nation's oldest media and publishing companies, having been founded in 1902 as an agricultural publisher. At its core, Meredith provides consumers with content by leveraging print, digital, mobile, video, and broadcast TV media platforms. Nationally, the firm reaches over 180 million American consumers. Advertising accounts for a little over half of Meredith's revenue and is driven by selling print ads (22% of firm-wide sales), spot ads on broadcast TV stations (13%), and digital ads across the company's websites (12%).

Earlier this year, we published a note reviewing Macy's dividend safety profile and struggles turning around its brick-and-mortar retail business. In the note, we said that Macy's Borderline Safe Dividend Safety Score was predicated in part on the company's turnaround efforts not stalling more than they already have. Unfortunately, Macy's turnaround efforts have appeared to do just that. Despite a healthy economy and strong results from other retailers, Macy's reported disappointing earnings last month, forcing management to lower its full-year earnings guidance. Macy's earnings per share have now declined 12% over the past year, and analysts expect Macy's EPS to drop a further 26% over the next twelve months.