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, utility stock NextEra Energy has taken the top spot in the list as the company raised its dividend. Second in the list is Home Depot, which trended after issuing cautious earnings guidance for 2023. Third in the list is Diamondback Energy, as the oil explorer raised its base dividend. This list is closed by Medical Properties Trust, a REIT that has experienced a big selloff in its stock.
Don’t forget to read our previous edition of trends here.
NextEra Energy Raises Dividend by 10%
Utility company NextEra Energy (NEE) has taken the first position in the list with an advance in viewership of 56%. NextEra has trended after the company raised its dividend by 10%, as part of its plan to boost payouts to shareholders every year through 2024.
NextEra has benefited from being a utility in the current tough environment for equities. As it is focused on aggressively expanding its green energy output, NextEra did well in the growth-oriented environment for the past 10 years, as a lot of money poured into green energy out of oil and gas stocks.
And NextEra has done well financially too. Its revenues rose 22% in 2022 to nearly $21 billion, while net income jumped 16% to $4.15 billion. The stock may have been overvalued so it’s down 20% from peak, but it remains up more than 80% over the past five years.
NextEra pays a dividend of $1.87 per year, equal to a yield of 2.5%. The dividend is payable on March 15 to shareholders of record on February 28.
Source: Barchart.com
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Home Depot Reports Disappointing Results
Home Depot (HD) is second in the list with a solid advance in traffic of 52%. Home Depot’s stock price performance has been mixed in recent weeks, as the company’s results have disappointed. Revenue for the fourth quarter came in at $35.8 billion versus $40 billion expected by analysts. Earnings per share, meanwhile, were slightly higher than expected at $3.30 per share.
The company attributed the disappointing results to falling lumber prices nationwide. It argued the consumer is still strong and likely to continue to be strong for the foreseeable future. The U.S. consumer has taken a hit from rising inflation and interest rates, lower house prices, and higher energy prices, but the labor market has been surprisingly resilient.
The guidance has also disappointed. Home Depot said it expects a decline in diluted earnings per share as it believes consumer spending will be flat.
Home Depot pays an annual dividend of $8.36 per share, resulting in a yield of $2.81%.
Source: Barchart.com
Diamondback Energy Increases Base Dividend
Diamondback Energy (FANG) has taken the third position in the list with an advance in viewership of 46%. Diamondback has trended after the company increased its annual base dividend by 7% to $3.20 per share, which means a yield of 2.4% on current share prices.
Diamondback also announced a variable dividend, bringing the total annual payout to shareholders at 8.8%, while repurchasing about $316 million worth of shares in the fourth quarter.
Like most energy companies, Diamondback has had a stellar year, with revenues doubling to $4.4 billion and free cash flow increasing by 35% to $1.32 billion. The company benefited from rising oil prices.
Source: Barchart.com
Medical Properties Trust Suffers from Troubled Client
Medical Properties Trust (MPW) has taken the last place this fortnight, seeing its viewership edge up 16%. The investor in healthcare facilities has had a rough ride, as rising interest rates put the entire REIT sector under stress.
Medical Properties’ revenues declined 7% in the fourth quarter of 2022, while it switched to a net loss of $140 million from a net income of $206 million. The loss was largely due to a tenant running into financial difficulties and not being able to pay rent. The company was forced to write off about $112 million in rent related to four Pennsylvania properties leased out to Prospect. These properties were responsible for a little more than one tenth of the company’s total revenues.
These issues should be temporary. Medical Properties’ bumper 11% yield could be attractive, especially for those betting on a recovery in the stock price and the company’s fortunes.
Source: Barchart.com
The Bottom Line
NextEra Energy has raised its dividend as the company’s financial results continue to improve. Home Depot has reported disappointing results and guidance. Diamondback Energy has increased its dividend, while Medical Properties Trust has recorded a big loss due to a troubled client that failed to pay rent.
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