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.
Companies that raised dividends have trended over the past two weeks. PNC Financial topped the list as the company slightly raised its dividend. Enterprise Products Partners also increased its payout as the stock is trading at near pre-pandemic highs. The third spot is taken by Johnson and Johnson, which recently spun off its consumer unit. Last in the list is Verizon, whose stock has been hit by potentially costly litigation.
Don’t forget to read our previous edition of trends here.
PNC Financial Raises Dividend
PNC Financial (PNC) has taken the first position in the list with a strong advance in viewership of 184%. PNC was in the news after the company raised its quarterly dividend by 3% to $1.55 per unit. The dividend now yields 4.5% at most recent stock prices.
The stock has risen about 20% since reaching an intra-year low in May following the collapse of Silicon Valley Bank and ensuing fears of banking contagion. The company has delivered a strong quarter, with net interest income jumping 15% to more than $3.5 billion. However, the rosy picture was cut short by the full-year guidance.
The bank said that it now expects net interest income to rise between 5% and 6% in 2023 compared with a previous forecast of 6% to 8%. Rising interest rates have proven a boon for banks like PNC as the spreads have increased. However, the company expects higher interest rates to dampen demand for loans. PNC also set aside 4x more funds for debt delinquencies than last year.
Source: Barchart.com
Enterprise Products Partners Hikes Dividend by 2%
Enterprise Products Partners (EPD) has taken the second position in the list with an advance in traffic of 46%. Enterprise, a natural gas and crude oil pipeline operator, hiked its dividend by more than 2% to $2 per unit.
Given what seems to be a continued depressed stock price, the dividend yields a solid and secure 7.4%. The stock also appears very cheap, trading at a price-to-earnings ratio of just 10.70. Of course, the risk with Enterprise is that a fall in energy demand will hit its earnings. Revenues and net income have been falling for four straight quarters, but the stock rallied thanks to investor confidence slowly improving. The stock now trades very close to pre-pandemic levels.
Source: Barchart.com
Johnson & Johnson Reports Strong Results
Pharmaceutical company Johnson & Johnson (JNJ) has placed third this week with a rise in viewership of 18%. The pharmaceutical giant hit the news after it announced the start of an exchange offer with current shareholders for shares in Kenvue, its consumer unit that it recently spun off into a newly listed company.
Johnson & Johnson is offering to exchange its own stock with shares of Kenvue at a 7% discount. Since it listed, Kenvue has underperformed Johnson & Johnson, but its revenues and profits have been going up. Johnson & Johnson has also seen its revenues and profits increasing in recent quarters. The split-off was necessary for shareholders who might want to own the healthcare business without having exposure to the more cyclical consumer unit and vice versa.
Johnson & Johnson recently increased its full-year guidance as sales in its medical technology division, which produces devices for surgeries, among others, have seen strong demand. Non-urgent surgeries were delayed during the pandemic but now their numbers are increasing strongly.
Source: Barchart.com
Verizon Stock Falls on Litigation Fears
Telecom juggernaut Verizon Communications (VZ) is last in the list with a rise in viewership of around 12%. Verizon has been in the news after revelations that Verizon and its peer AT&T left lead cables in several U.S. states, something that could expose them to litigation and cleanup costs. It is yet unclear how big the impact will be, but there is a chance it could be negligible. Verizon shares have fallen 6% over the past month, extending year-to-date losses to more than 15%.
The news comes as the company already faces falling revenues and profits, amid heightened competition and rising capital costs with the deployment of 5G. The stock trades at a dirt-cheap price-to-earnings ratio of 6%, while its dividend yields a whopping 7.7%. However, the payout could be cut if costs with the lead cleanup are significant.
Source: Barchart.com
The Bottom Line
PNC Financial has increased its dividend, but the outlook looks less bright than previously believed. Enterprise Products Partners hiked its dividend, as the company’s results continue to impress. Johnson & Johnson reported strong results following higher sales from medical technology devices. Lastly, Verizon Communications shares have dropped as the company could be facing costly litigation due to revelations that the company left toxic lead cables in the U.S.
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