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.
Store Capital has increased its dividend after agreeing to sell itself to Oak Street Capital in a blockbuster $14 billion deal. Annaly Capital, a mortgage real estate investment trust, announced a reverse stock split and maintained its dividend intact. Phillip Morris has been in the news as it attempts to acquire Swedish Match amid shareholder opposition from the target. Technology giant Microsoft also hiked its dividend.
Don’t forget to read our previous edition of trends here.
Store Capital Ups Dividend by 6.5%
Store Capital (STOR), the real estate investment trust known as Single Tenant Operational Real Estate, has hiked its dividend for the third quarter by 6.5% to $0.41 per share, as part of an agreement to sell the company to Oak Street Capital, a division of Blue Owl, for $14 billion in an all-cash transaction. As a result, Store has taken the first position in the list with an increase in viewership of 58%.
Store, whose dividend yields 5.18%, said this might be the last dividend payment to shareholders before it is integrated into Oak Street.
The merger consideration represents a premium of around 17% to the stock price right before the announcement but is about 22% lower compared with the high the stock reached in late 2019. The transaction is expected to close in the first quarter of 2023, subject to approval by shareholders.
Source: Barchart.com
Annaly Capital Announced 1-for-4 Reverse Stock Split
Annaly Capital Management (NLY), a mortgage real estate investment trust, is second in the list with an increase in viewership of 29%. Annaly Capital shares have plunged more than 20% over the past five days, after the company announced a 1-for-4 reverse stock split.
The company said the reverse split was made to boost the stock’s attractiveness to institutional investors. Many institutions are not allowed to buy equities that trade below a certain threshold, like $10 apiece.
The reverse stock split should not have influenced the direction of the stock, but investors took a negative view nevertheless. The company’s dividend has been declining since 2017, from a quarterly 30 cents per share to 22 cents. After the reverse split, the company confirmed its annual dividend would be unchanged at 88 cents.
Investors are also souring on the stock given the rising interest rates and possible repercussions on the housing market.
Source: Barchart.com
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Phillip Morris Faces Opposition to Swedish Match Takeover
Tobacco company Phillip Morris International (PM) is third in the list with an advance in traffic of 22%. Phillip Morris has agreed to acquire Sweden-based Swedish Match for $16 billion. However, mounting investor opposition means the company might have trouble hitting the required 90% approval threshold. Investors like Sydney-based Bronte Capital, New York-based Elliott Management, and Chicago-based Framtiden Partnerships are reportedly opposing the deal and will not tender their shares at current prices.
Australia-based Bronte said the company could reach a valuation of $100 billion. Over the past five years, the company has grown rapidly, with its stock appreciating by 170%, despite operating in a secularly-challenged market. Bronte believes shareholders should reject the offer altogether. Other investors would like the offer improved, the most likely scenario if Phillip Morris wants the deal to get through.
Phillip Morris has been increasing its dividend for the past 13 years, with its dividend currently yielding 5.8%.
Source: Barchart.com
Microsoft Hikes Dividend
Microsoft (MSFT) is last in the list with a jump in viewership of 21%. The technology giant was among the few companies that managed to increase its dividend in the current environment, owing to its strong operational performance.
Microsoft hiked its quarterly dividend by 10% to 68 cents per share. This is the 19th year of consecutive increases. The dividend yields 1.15%, a little lower than the technology average of 1.37%.
Microsoft shares are down about 31% since their peak in November 2021, as all technology stocks have been pummeled by rising interest rates as the Federal Reserve is committed to bringing inflation down whatever the costs. In the most recent June quarter, Microsoft’s revenues jumped 12% year-over-year to $51.87 billion, while net income was slightly up to $16.74 billion.
Source: Barchart.com
The Bottom Line
Real estate company Store Capital raised its dividend after being acquired in an all-cash $14 billion deal. Annaly Capital Management plunged after the company announced a reverse stock split. Phillip Morris is facing pressure to hike its takeover offer for rival Swedish Match. Microsoft announced its 19th consecutive increase in dividends.
Be sure to check out Dividend.com’s News section for the most trending news around income investing.
