Dividend.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
This week’s traffic has been slow amid a tepid market, as many investors are taking a break. Still, energy and technology stocks have caught attention. Midstream energy firm Phillips 66 (PSX ) and Microsoft (MSFT ) are both on the list, along with companies paying special dividends and Lockheed Martin (LMT ).
Phillips 66: Buffett's Play
Midstream energy company Phillips 66 has seen its viewership increase 21% week-over-week, comfortably taking the first spot on our list. The company’s stock has dropped nearly 5% since the beginning of the year, and about 6% over the past twelve months, weathering the oil debacle. Indeed, the firm even increased its quarterly dividend, from $0.56 to $0.63, this May.
However, the company is part of a cyclical business and its margins may be at the low end of the cycle. The stock price has proved resilient, in no small part, due to Warren Buffett’s large investment. Buffett’s Berkshire Hathaway owns 15% in the company, having steadily added to it over the last quarters. In its latest quarterly filing, Berkshire revealed it bought 3.2 million additional shares, and now owns 78.8 million.
Rumors in the press abound that the company, or at least part of it, may be a good acquisition target for Berkshire. Phillips 66, which was spun off from ConocoPhillips (COP ) several years ago, cancelled an appearance at the Deutsche Bank Energy Summit, saying it had nothing new to say. The decision could mean the company prepares a big corporate announcement that could possibly involve Buffett. With about $70 billion in cash, Berkshire could easily afford to acquire Phillips 66, which has a market capitalization of about $40 billion.
Special Dividends Page
Special dividend companies have taken second place on our weekly list, with a 19% increase in viewership. Special dividends are usually one-time payments to shareholders that are intended to unlock shareholder value – or just simply reward investors when the company generates additional cash from a sale of a unit or other corporate one-off transactions. For example, Stanley Furniture (STLY) recently announced a special dividend of $1.50 per share, as part of a strategic review aimed at increasing shareholder value. The dividend, which represents about half of the share price, will be paid this Friday. An additional $0.25 per share dividend is expected soon.
In another example, Berkley Corporation (WRB ) said it will pay a $0.50 per share special dividend on top of a regular dividend of $0.13 this autumn.
Microsoft: Renewed Impetus
Iconic software company Microsoft has experienced 17% more viewers this week compared to last, as its stock price is hovering near the all-time highs reached during the dotcom bubble. Shares in the technology behemoth are down more than 1% over the past five days, but are up nearly 4% since the beginning of the year.
Iconic software company Microsoft has experienced 17% more viewers this week compared to last, as its stock price is hovering near the all-time highs reached during the dotcom bubble. Shares in the technology behemoth are down more than 1% over the past five days, but are up nearly 4% since the beginning of the year.
Lockheed Martin: Gaining From Disorder
Defense company Lockheed Martin has taken last place on the list, with a 14% increase in traffic. Lockheed Martin, which pays a nearly 3% annual dividend, has seen its stock price edging higher lately on an escalation in conflicts across the world. Shares are up more than 17% since the beginning of the year, although they have fallen nearly 2% in the past five days.
Lockheed Martin recently completed a spin off of its low margin IT services business, sending the stock down more than 3%. The split is dilutive to earnings in the near term, but over the long term it could benefit by improving focus on the higher-margin core manufacturing business.
A victory by Hillary Clinton in the upcoming elections in the U.S. will likely boost all defensive stocks. The U.S. has been calling on its European partners to increase military spending in the face of threats from the Middle East and a resurgent Russia. The U.S. itself is likely to boost spending given that both presidential candidates, Donald Trump and Clinton, support a strong army. Trump, however, is in favor of a more isolationistic approach and a less confrontational stance with Russia, likely making Clinton a slightly better candidate for Lockheed Martin.
The Bottom Line
This week, Phillips 66 has taken first spot on our list on rumors the dividend company may be an acquisition target for Warren Buffett. Companies paying special dividends are second on the list, with two firms recently announcing hefty one-time payouts. Microsoft has been in the news with its successful transformation plan, while Lockheed Martin stands to gain from an increase in geopolitical tensions.
By analyzing how you, our valued readers, search our property each week, we hope to uncover important trends that will help you understand how the market is behaving so you can fine-tune your investment strategy. At the end of the week, we’ll share these trends, giving you better insight into the relevant market events that will allow you to make more valuable decisions for your portfolio.
