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  • Kimberly-Clark declares $0.92 dividend  [View news story]
    KMB paid out ALL of its free cash flow, plus a pinch extra, in dividends last year. Not surprising they raised the dividend at a slower rate.
    Feb 11, 2016. 05:13 PM | 2 Likes Like |Link to Comment
  • Is HCP's Dividend Aristocrat Record At Risk?  [View article]
    Brad,
    The inserted table in your writeup shows that ManorCare represents 23% of total revenue and Brookdale equals 10% of total revenue. If I read that correctly, shouldn't the two combine to 33% of HCP's revenue rather than 46%?? or...What did I miss??
    Feb 10, 2016. 03:12 PM | 1 Like Like |Link to Comment
  • Is HCP's Dividend Aristocrat Record At Risk?  [View article]
    So the dividend cut risk is between 1% and 20%.
    What is the guess as to the amount of the cut??
    What happens if HCRMC goes BK (that was asked on the call and just HCP going to cash recognition of rent indicates that HCP thinks it can happen)??
    If HCRMC goes BK, what happens to the cash flows to HCP??
    If you eliminate all of the current cash flows to HCP (that is lease payments), then HCP's debt could very reasonably be lowered to less than investment grade (a 23% lowering of cash flow would seemingly put the cash flow to debt ratio at something like 12 to 13 times--that is "junk" territory.
    I ask this as an owner of HCP (only 0.3% of the portfolio--this is why one diversifies), and I am wondering how bad it might get. A 50% redux in the dividend would be unfortunate, but I would not sell if that is what happens. On the other hand, a cut in the credit rating etc would suggest that there is no reason to stick around (so I am trying to figure out the probabilities of the different possible outcomes for the company, not the stock.)
    Thanks to anyone who might offer useful insights.
    Feb 10, 2016. 10:04 AM | 1 Like Like |Link to Comment
  • HCP beats by $0.02, beats on revenue  [View news story]
    TN,
    According to the release they have already sold some HCRMC properties in 4q2015 as well as 1q2016 with more sales to come (unless I mis-read the release).
    You are, unfortunately, very correct about the lack of diversification in their portfolio; and they can't diversify easily or well now.
    Not to defend the current management, but it appears (at least to me) that this is why the prior CEO left the company under cloudy circumstances.
    Feb 9, 2016. 10:14 AM | Likes Like |Link to Comment
  • HCP beats by $0.02, beats on revenue  [View news story]
    FFO before adjustments = loss of $0.99 per share.
    They kind of backed out all the bad news on HCRMC, similar to what they did in 1q2015 (if my memory serves me correctly).
    Seems like they are saying that if HCRMC did not generate 30% (or whatever it is) f their business, then HCP would be just fine.
    Unfortunately, this report did not make me feel that HCP as a whole is very healthy.
    Feb 9, 2016. 09:35 AM | 3 Likes Like |Link to Comment
  • Dividend Cut Risk Of The 6 Oil Super Majors  [View article]
    Dale,
    Where is the info about a Vanguard dividend health screen that you refer to? I have an account at Vanguard and can find nothing on either the dividend health screen or the dividend achievers (except for that phrase in the name of some funds run by other managers).
    Thanks for any clarification or direction you can give.
    Feb 8, 2016. 09:29 AM | Likes Like |Link to Comment
  • Enterprise Products Partners - Key Facts And Trends Revealed By Q4 2015 Earnings  [View article]
    Ron,
    Why did EPD's sustaining cap exp drop year over year (and for every quarter) in 2015?
    What did they divest, if anything, in late 2014 that might have lowered the sustaining cap exp?

    Thanks for your continuing analysis of these MLPs and thanks for any answer you can give me on the sustaining cap exp
    Feb 3, 2016. 07:27 AM | Likes Like |Link to Comment
  • Abbott Labs buys Alere for $5.8B; shares up 46% premarket  [View news story]
    Sorry, should have typed $120mm (not $150mm).
    Feb 1, 2016. 02:15 PM | Likes Like |Link to Comment
  • Abbott Labs buys Alere for $5.8B; shares up 46% premarket  [View news story]
    Sivbum,
    Your math is correct though ABT expects something closer to $0.08 per share in EPS. Revising for that correction implies $150mm in earnings, much more reasonable (though not nearly so outstanding for ABT).
    Feb 1, 2016. 02:14 PM | Likes Like |Link to Comment
  • IBM CEO Rometty gets big bonus boost  [View news story]
    Quattro...,
    You are correct that too many here measure IBM in too short of time frames. However, the reaction is not about the lack of improvement in results, but the distinct improvement in compensation BEFORE ANY evidence of improvement.
    What is the justification for such a notable boost in pay for the CEO now, instead of waiting for clear signs of improvement?
    Jan 29, 2016. 09:53 AM | 3 Likes Like |Link to Comment
  • Correlation of KMI stock to oil prices misguided, Kinder says  [View news story]
    Might be a typo, nevertheless rather ironically amusing
    Jan 27, 2016. 01:18 PM | 28 Likes Like |Link to Comment
  • Kimberly-Clark Looks Ripe For A Fall Off Of Earnings  [View article]
    You may be correct about their guidance being somewhat optimistic, but management should know more about their business environment than we do.

    However, if you want to look for a tangible reason for concern for KMB, consider that in 2016 'KMB generated $2.306 B in cash, invested $1.056 B in capital spending, and paid $1.272 B in dividends. So, in 2015, one could reasonably say that KMB borrowed the last $22 MM of dividends that they paid as well as all of the cash to repurchase $851 MM of their own shares. The balance sheet is not a problem, at least not yet. But debt has increased considerably over the last year, so at some point in the next year or two or three, either the dividend is pressured (not cut, not necessarily frozen, but of necessity constrained) or the debt vigilantes (Moody's or S&P or Fitch) will probably start ululating about KMB's credit rating. It appears that management is transitioning from walking on a nice garden path two or three years ago to be walking something closer to a tightrope with a potentially unpleasant fall in the next year or two.

    BTW, KMB represents one of my five largest holdings. I am not inclined to sell (though I may write out-of-the-money calls against some of my position). Given the circumstances, I would not consider currently buying unless the stock offered around a 4% yield--I think dividend growth will probably be in the low single digits unless the organic business accelerates considerably. Perhaps CEO Falk knows of some new projects that will accelerate the biz.
    Jan 27, 2016. 09:56 AM | 1 Like Like |Link to Comment
  • Kinder Morgan: The Case For Going Short  [View article]
    Perhaps Brandon meant to specify a "pairs" trade: short KMI and go long MMP (or EPD or SEP). This trade makes perfect sense to a professional trader who is willing to take a bit of risk. For example, one could sell short 400 shares of KMI and buy 100 shares of MMP. The MMP (who just raised their distribution Tuesday night compared to KMI's big cut) yield is over 5% and the distribution on 100 shares would exceed the dividend from the 400 KMI shares that the short would need to cover; MMP's distribution coverage allows them to finance ALL of the equity portion of their growth cap exp without ANY unit issuances; MMP's interest coverage and all debt metrics beat KMI; and the enterprise value to EBITDA of the two are virtually identical. MMP should simply outperform KMI whether energy prices go up or down and whether the stock market or interest rates go up or down.
    A naked short of KMI seems very late (as several people commented), but a pairs trade appears reasonable--and a probable winner regardless of what energy prices, interest rates, or general stock prices do.
    Jan 27, 2016. 01:01 AM | Likes Like |Link to Comment
  • Intel declares $0.26 dividend  [View news story]
    This increase is not new...INTC announced this November 19.
    Jan 22, 2016. 09:41 AM | 10 Likes Like |Link to Comment
  • Beat The Market Pullback With This Outperforming Blue Chip Dividend Stock  [View article]
    For DLR's preferred shares, Schwab shows a "BB+" credit rating from S&P with the note "Considered highest speculative grade by market participants". Similarly, Schwab shows a "Baa3" credit rating from Moody's with the note "Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics". What does "blue chip" mean to you that you would call DLR by that name??

    By the way, I own some DLR common and some DLR preferred shares though not a large (that is a relative term) weighting of either.
    Jan 18, 2016. 11:07 AM | 2 Likes Like |Link to Comment
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