Dividends

Big Smoke offers Big Oil tips to avoid dodo status

9 June 2021

Fat dividends supported tobacco shares even as regulators focused on health risks. The outperformance of Philip Morris suggests investors like speedy pivots. Better still, hydrocarbon producers’ switch to green energy looks an easier ESG sell than tobacco substitutes.

Crazy metal prices inflate miners’ capex conundrum

14 May 2021

Sky-high copper and iron ore values should make the likes of Rio Tinto and BHP invest in extra supply for the green energy transition. But shareholders wary of past write-downs want dividends, not risky new projects. The higher prices climb, the starker the disconnect.

Drahi paints debt masterpiece with Sotheby’s bond

13 May 2021

The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.

Total is least-bad pick for confused oil investors

29 April 2021

First-quarter results show the French group and rivals BP and Royal Dutch Shell rebounding from last year’s woes. Yet BP’s turn to wind and solar may be too sharp and Shell’s too relaxed. For now, Total’s balanced green ambition and fat dividend look more appealing.

Guest view: A qualified opinion on UK audit reform

28 April 2021

Corporate collapses like Carillion and Thomas Cook highlight flaws in accounting for capital and dividends, argues Natasha Landell-Mills of Sarasin & Partners. Proposals to restore trust in accounts fall dangerously short. The government should focus on enforcing existing laws.

Aramco’s next share offer is just as hard a sell

22 March 2021

The $1.9 trln Saudi oil giant’s annual results showed Covid-19 scars. If Riyadh sells more shares, Aramco’s low costs and spare capacity may be appealing to non-Saudi investors that largely sat out its 2019 IPO. But many environmental, social and governance red flags remain.

Fund stragglers offer own post-crisis value punt

9 March 2021

UK asset managers Standard Life Aberdeen and M&G are shaking off the pandemic, helped by better stock picking. The challenge is to keep assets and profit growing in an industry shaken by passive funds, and find new businesses. Their low valuations at least provide a cushion.

Rio can use sunny outlook to mend leaky roof

17 February 2021

Jakob Stausholm’s first results benefitted from soaring iron ore prices, allowing the global miner’s new CEO to hike dividends. But he has a messy situation in Mongolia to resolve, and governance issues. Better to spend time and money fixing these than on splashy new deals.

Capital Calls: Disney+, SPAC romance

12 February 2021

Concise views on global finance in the Covid-19 era: The entertainment giant’s streaming growth comes at a cost; blank-check companies are trashing all records in 2021.

Capital Calls: Third Point, Kraft Heinz/Hormel

11 February 2021

Concise views on global finance in the Covid-19 era: Dan Loeb’s hedge fund gets a good start in 2021, while Hormel Foods buys peanuts, but pays anything but.

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.