Dividends

Viewsroom: Bank dividends and Chinese rentals

17 December 2020

European regulators’ cautious lifting of a ban on bank dividends leaves investors in limbo, plus details of an unusually bold growth strategy from Credit Suisse. And the collapse of China’s WeWork-like apartment rental middlemen has left many young tenants homeless and in debt.

ECB fiat anoints unlikely bank dividend heroes

16 December 2020

The regulator capped payouts as a proportion of earnings and assets. Well-capitalised lenders with richer valuations, like Nordea and KBC, now offer tiny yields compared with minnows like Liberbank. The risk is that a slow recovery causes restrictions to last beyond September.

BoE leaves UK lenders in investor purgatory

11 December 2020

The supervisor will let HSBC, Lloyds and others resume dividends and share buybacks next year. But its new “guardrails” will limit the sector’s overall yield to around 2%. While the original ban made sense, lingering restrictions may further raise banks’ cost of capital.

Lowly Europe bank values will outlast dividend ban

26 November 2020

Big lenders blame frozen payouts for depressing share prices, down 17% on average this year. But the selloff broadly matches the decline in profit forecasts for 2022, suggesting ultra-low interest rates are to blame. Even if dividends return, discount valuations may persist.

Corona Capital: Walt Disney

12 November 2020

Concise views on the pandemic’s corporate and financial fallout: Walt Disney is light-years ahead on projections for its streaming business.

Corona Capital: Salvatore Ferragamo

10 November 2020

Concise views on the pandemic’s corporate and financial fallout: Faded heels-and-loafers brand Salvatore Ferragamo could benefit from a coronavirus vaccine-induced return to airport shopping, but the Florentine fashion house would still need a makeover.

Aramco’s mighty value reflects mini investor base

3 November 2020

Shares in the $1.8 trln Saudi oil giant are flat since January, while those of western rivals like BP have halved. Aramco’s solid and more-secure dividend explains some of the difference. But a tiny free float comprised of investors who are less likely to sell helps, too.

Bank dividend bans have passed their sell-by date

30 October 2020

European supervisors in March halted payouts so that lenders could keep credit flowing and absorb losses. Yet earnings and capital have held up, while bond markets are booming. Regulators can drop the restrictions, as long as banks keep big shock absorbers and don’t cut lending.

Corona Capital: Utah Jazz, Comcast, Kraft

29 October 2020

Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.

Corona Capital: Palantir presents

9 September 2020

Concise views on the pandemic’s corporate and financial fallout: Potential shareholders have had their first look at the data company ahead of its planned direct listing later this month. One of the more memorable moments was boss Alex Karp making his pitch from a nature trail.

Corona Capital: Dividends, Zoom, Big-screen blues

24 August 2020

Concise views on the pandemic’s corporate and financial fallout: As company bosses try to conserve cash, investors are feeling the pinch; Zoom has a back-to-school problem; and a mediocre debut for Russell Crowe’s new road-rage movie shows Hollywood is stuck in the slow lane.

Corona Capital: Vroom, Estonia WFH, Johnny Rockets

13 August 2020

Concise views on the pandemic’s corporate and financial fallout: How Vroom can power through the pandemic; Estonia tries to lure those with wanderlust; Casual dining puts on the Covid-19.

Aramco’s dividend defences are triple-locked

10 August 2020

The Saudi state oil giant is disbursing $18.8 bln despite quarterly earnings slumping to $6.6 bln. Ultra-low costs lend an edge over Western rivals. Low debt and priority for private shareholders are extra buffers for those willing to overlook environmental and social concerns.

Glencore’s Glasenberg shows odd dividend caution

6 August 2020

The gunslinging boss of the big miner-trader is holstering this year’s $2.6 bln dividend. The company blames coronavirus uncertainty, but Glencore’s cash flow is holding up and metal prices are mostly recovering. The South African may be bracing for a hefty U.S. corruption fine.

Europe bank investors can bear more dividend pain

28 July 2020

Hopes for payouts this year have been dashed by top supervisor Andrea Enria, who told lenders to wait until 2021. If profits hold up, investors will only suffer a delay, not a loss. Covid-19 is special, but investors can worry about creeping regulatory control of dividends.

Bank stress tests give the Fed a pass grade too

25 June 2020

The biggest lenders would have a minimum capital ratio of 7.7% in a W-shaped virus recovery, the U.S. regulator reckons. The Fed is capping dividends as some banks approach the danger zone. Still, it reassures that after a decade of reforms, they can weather an unforeseen crisis.

ESG takes on new meaning with U.S. private prisons

17 June 2020

CoreCivic is halting dividends and may ditch its REIT structure. That comes as social risks prompted most banks to stop lending to the incarceration business. An LBO is one option. But with leverage hard to come by, CoreCivic would need investors for whom the E means equity.

BP’s greener credentials sharpen focus on dividend

15 June 2020

The energy giant is writing off up to $17.5 bln after slashing long-term oil price forecasts. BP’s green transition would get an extra boost if it cut dividends to spend more on low-carbon output. But as Royal Dutch Shell has found, that irks investors it needs to keep sweet.

Corona Capital: Crisis loans, Jet fighting

3 June 2020

Concise views on the pandemic’s corporate and financial fallout: Bank customers are no longer making a dash for cash, loan drawdowns suggest. Meanwhile, a U.S. block on Chinese passenger flights suggests domestic battles haven’t dimmed President Trump’s desire to make China pay.

Shell’s dividend surrender is a necessary evil

30 April 2020

Given it hadn’t reduced shareholder payouts since WW2, the Anglo-Dutch major’s two-thirds cut hurts its pride. But amid an epic price crash boss Ben van Beurden couldn’t have kept Shell’s rating and paid to transition from oil. Stubbornly clinging on would have been even worse.