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 fortnight was all about earnings reports. Embattled oil major ExxonMobil reported strong earnings as a result of higher energy prices. Apple, which is last in the list, posted rather weak earnings due to supply chain issues. Microsoft trended second as it overtook Apple as the largest company in the world by market capitalization. Coca Cola, which trended third, is recovering from the coronavirus pandemic with improving earnings.
Don’t forget to read our previous edition of trends here.
ExxonMobil
ExxonMobil (XOM) has taken the first place in the list this week, seeing its viewership advance 38%.
Exxon has reported strong earnings in the third quarter, boosted by higher energy prices and strong demand for fuel. The company said its net income jumped to $6.7 billion in the third quarter from a loss of $680 million during the same period a year earlier. To the surprise of analysts, Exxon resumed a share repurchase program that is likely to pepper the stock in the upcoming quarters. The company announced a plan to buy back $10 billion worth of shares through 2023.
On top of share repurchases, Exxon pays out a dividend that currently yields 5.35%, nearly a percentage point higher than the Energy sector average. In addition, shares in ExxonMobil have appreciated by more than 90% over the past 12 months, although the stock still trades at half of its peak hit in 2014.
Exxon has outperformed its mega-cap peers like Chevron (CVX) and Royal Dutch Shell (RDS-A) in the past 12 months, partly because it was forced to add three new directors to its board following an ESG campaign by an activist investor. The activist success was a clear signal to the company’s management that investors want the company to invest more in renewables and ditch fossil fuel investments.
Source: Barchart.com
Check out our latest Best Dividend Stocks List here.
Microsoft
Microsoft (MSFT) has taken the second spot in the list with an increase in traffic of 27%.
Microsoft trended this fortnight as the software giant reported strong earnings and overtook Apple (AAPL) as the largest company in the world by market capitalization. As of November 1 close, Microsoft had a market cap of $2.47 trillion, while Apple was valued at $2.46 trillion.
In the third quarter, Microsoft grew revenues by 22%, largely boosted by the cloud division, which saw its revenues jump by 36%. Microsoft also reported net income of $20.5 billion, up by 47% compared to the same period a year ago. The company has largely benefitted from the digitalization trend, which is likely to continue.
Microsoft also pays a dividend of $2.48 per share, equal to a yield of 0.75%. Its payout ratio is 31%.
Source: Barchart.com
Coca Cola
Beverages company Coca Cola (KO) has seen its traffic jump by 17% over the past fortnight, taking third position in the list. Coca Cola has reported strong third-quarter earnings, with revenues of $10.04 billion beating expectations of $9.75 billion. KO’s profits expanded from $1.7 billion to $2.5 billion.
Coke has also trended after it agreed to buy all the shares in drink-maker Bodyarmor for $5.6 billion, the largest acquisition since it acquired U.K.-based coffee chain Costa Coffee in 2018 for $5.1 billion.
The acquisition will help Coke better compete in the sports drinks market, which currently is dominated by PepsiCo with its Gatorade drink. Bodyarmor is now the second-largest player after Coke’s Powerade.
Coke pays a dividend of $1.68 per share to shareholders, amounting to a yield of 3%.
Source: Barchart.com
Apple
Apple (AAPL) is last in the list with an increase in viewership of 14%. Apple has lost the title of most valuable company in the world to Microsoft after it posted a disappointing earnings report. In the third quarter, Apple’s revenues grew by 29% year-over-year to $83.3 billion, but that was more than $1 billion less than analysts’ expectations. The company blamed the results on supply chain issues, which CEO Tim Cook said impacted revenues by around $6 billion.
However, the demand was apparently very strong, and Apple could post stronger results in the next quarters. Shares in Apple are up by 15% year-to-date.
The company pays a slightly lower dividend to shareholders than Microsoft of around $0.88 per share, which yields 0.6%.
Source: Barchart.com
The Bottom Line
ExxonMobil has reported strong results, thanks to higher oil and gas prices. Microsoft overtook Apple as the most valuable company in the world, as Microsoft earnings were boosted by its cloud offerings, while Apple’s revenues came in lower than expected due to supply chain issues. Meanwhile, Coca Cola’s earnings are recovering from the pandemic and the company made a large acquisition by buying out Bodyarmor.
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