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.
Walt Disney Company has taken first position in the list, after the company announced a higher dividend and share buybacks. Second in the list is BHP Billiton, which delivered strong results and declared a dividend. British American Tobacco is third, as the tobacco company also unveiled a good set of results. Last in the list is Arbor Realty Trust, a real estate investment trust with a high dividend.
Don’t forget to read our previous edition of trends here.
Walt Disney Ups Dividend
Entertainment juggernaut Walt Disney (DIS) has placed first this past fortnight, seeing its viewership soar 150%. Walt Disney increased its dividend by 50% to 45 cents per share and announced a share buyback program of $3 billion. The good news for shareholders came after Disney reported solid revenue growth for the fourth quarter and improved profitability, triggering optimism that the company has turned a corner.
Disney has been making large investments in its streaming product in a bid to catch up with market leader Netflix. This meant Disney’s profitability fell dramatically at a time when Wall Street changed its attitude from valuing growth at all costs to cherishing profits. With the Hollywood writers’ strike over and COVID-19 no longer impacting its experiences business, Disney might indeed be turning a corner. Losses at its streaming service also narrowed from $1.4 billion to $420 million, although questions remain over how profitable the business can be.
Disney’s current dividend is still half of what it was before the pandemic, when the company decided to suspend the payout amid falling attendance at its theme parks and the need to invest in its then-nascent direct-to-consumer category.
Source: Barchart
BHP Billiton Delivers Solid Quarter
BHP Billiton (BHP) has taken the second position in the list with an advance in viewership of 54%. The world’s largest miner has announced a profit of $6.6 billion for the half year and declared a dividend of 72 cents per share. Profits were the same as last year but beat analysts’ expectations by about $200 million.
However, one big worry for investors has been an impairment charge of some nickel assets in Australia to the tune of $5.7 billion. Another takeaway from the results was the slowing demand from China, which is expected to have peaked as the country shifts into slow-growth mode. However, China’s lack of growth can be offset by rising demand from India and countries in Southeast Asia.
BHP’s annual dividend of $3.2 per share yields a strong 5.5% and the company’s stock has performed decently, up about 26% in the past five years. BHP has a payout ratio of 62%.
Source: Barchart
British American Tobacco Posts Encouraging Results
British American Tobacco (BTI) has placed third in the list, seeing its traffic rise by 52%, not far from BHP Billiton.
The cigarette maker has reported better-than-expected, with organic sales up 3.1% to 27.3 billion pounds. This has been welcome news for the stock, which fell about 9% at the end of last year after the company announced a $31 billion impairment charge related to its Reynolds American Brands. The stock has gained some lost ground, but still remains down 25 over the past 12 months.
While the business is slowly deteriorating, investors can find solace in the stock’s juicy dividend of 9.8%. If British American Tobacco can maintain the dividend for 10 years, investors will basically recoup their investment through dividends. What remains is just a bonus.
British American has tried to bring smoking alternatives to the market, although, so far, they have not contributed significantly to growth.
Source: Barchart
Arbor Realty Trust Raises Dividend
Arbor Realty Trust (ABR) is last in the list, experiencing a jump in traffic of 45%.
The real estate investment trust attracted readers after the company raised its dividend by 7.5% to 43 cents per quarter. The dividend increase came after the company reported net income that was 5% higher for the full year at $330 million.
Although results were strong, Arbor Realty said it saw an increase in non-performing loans, which were cushioned by allowances for loan losses of nearly $200 million.
Arbor Realty’s dividend yields a juicy nearly 13% and has been increasing for the past 13 years.
Source: Barchart
The Bottom Line
Walt Disney has reported encouraging results, triggering optimism it may have turned a corner. BHP Billiton’s earnings beat expectations, but questions remain over China slowing demand affecting results. British American is slowly recovering after a massive asset write-down. Arbor Realty Trust increased its dividend, thanks to solid results.
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