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.
Star Bulk Carriers has taken first position in our trends list this fortnight as the company reported record profitability. Tobacco company and dividend king Altria Group is second in the list. Intel shares took a hit after the company said it will delay a key chip by one year to 2024. Finally, iron ore miner Rio Tinto will pay out a bumper dividend to shareholders thanks to strong results.
Don’t forget to read our previous edition of trends here.
Star Bulk Carriers
Cargo shipping company Star Bulk Carriers (SBLK) has topped the viewership list this fortnight with an increase in traffic of 43%. This is not surprising. Star Bulk has said it reached record profitability in the fourth quarter, with net income hitting $300 million. The strong quarter has helped the company report its best year ever, with net income of $680 million.
The company said market conditions were strong and it was able to increase its TCE (daily time charter equivalent) from $13,415 in the fourth quarter of 2020 to 37,406 in the same period in 2021. As the company’s operating expenses per vessel are largely static, it was able to pass on the increase straight to the bottom line.
As a result, the company announced a $2 per share quarterly dividend, equal to a yield of 6%. For the full year, Star Bulk paid a dividend of $4.25 per share, representing a yield of 13% at the closing price on February 22.
The company’s results and its dividend are highly volatile, very much depending on demand for cargo volumes in any given period. The company has benefited from supply chain disruptions, but the same results cannot be guaranteed in the future.
Check out our latest Best Dividend Stocks Model Portfolio here.
Source: Barchart.com
Altria Group
Altria Group (MO) has taken second position in the list this week with an increase in viewership of 19%. Altria, the tobacco products giant, has had a strong year, succeeding in returning to shareholders more than $8 billion via dividends and share buybacks. This was the third-largest annual cash return in the company’s history. While net revenues for 2021 declined slightly to $26 billion, adjusted earnings per share increased 5.7% to $4.61. Fourth-quarter earnings edged up 10.1% to $1.09.
While cigarette shipments have declined, the company’s revenues from smoke products increased slightly due to higher prices. Net revenues in oral tobacco products advanced 4.9% thanks to higher pricing.
Altria’s dividend has been relatively stable in recent years, yielding around 7%. However, the company has room to increase it as its current payout ratio of below 70% is lower than its long-term objective of 80%.
Source: Barchart.com
Intel
Intel (INTC) has again taken the third place in the list for the second consecutive time. Intel has seen its viewership advance 11% this fortnight.
Intel shares have declined around 14% over the past month, as a series of announcements disappointed investors. CEO Pat Gelsinger said at a conference recently that the company will have to ramp up its capital spending in the coming years in order to become a manufacturer of chips for other semiconductor firms. This could mean the company will increase its borrowings and is unlikely to announce any dividend increases.
Another disappointment for investors was the delay of a key chip for servers, named Granite Rapids, from 2023 to 2024. Bringing this chip to market is crucial for Intel’s plans to catch up with domestic and international rivals that are already producing more efficient chips.
However, both the market and investors are skeptical that Intel’s turnaround plan will succeed, with the stock price hovering around lows not seen since the coronavirus pandemic-induced market selloff in March 2020.
Intel’s payout ratio is around 40% and its dividend yields 3.3%, double technology’s average.
Source: Barchart.com
Rio Tinto
Rio Tinto (RIO) has taken last position in the list with an increase in traffic of just 3%.
Rio Tinto has trended as the company, on Wednesday, revealed a monster $23-billion dividend following a surge in profits to record levels. Rio Tinto’s profits for the full year rose to $21 billion, more than double the previous year. The company has benefitted from rising demand for iron ore from steel makers and an increase in prices.
Rio Tinto’s dividend currently yields a stunning 10% on a payout ratio of more than 100%.
While Rio Tinto’s results are enviable, the job of current CEO Jakob Stausholm is under threat following the publication of a damning report that revealed a culture ripe with sexual harassment, racism and bullying. Stausholm has made it a top priority to improve the culture going forward. Incoming Chair Dominic Barton recently said he will weigh whether Stausholm is best-placed to lead the cultural change at Rio Tinto.
Source: Barchart.com
The Bottom Line
Star Bulk Carriers has reached record profitability and announced a bumper dividend, thanks to rising demand for cargo shipping and prices. Tobacco-maker Altria Group has seen its revenues increase slightly on high pricing, although volumes continue to decline. Intel disappointed investors after CEO Pat Gelsinger said the company was expected to make large investments to become a manufacturer for other chip companies. Finally, Rio Tinto unveiled a large dividend thanks to strong results.
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