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.
United Parcels Service has taken the first position in the list, as the company reported falling revenues and net income. Second in the list is NextEra Energy Partners, a master limited partnership that pays a high dividend which might not be sustainable. Third in the list is mining giant Vale, which has reported strong results. The list is closed by MPLX.
Don’t forget to read our previous edition of trends here.
UPS Shares Nosedive After Dismal Earnings
United Parcels Service (UPS) has taken the first position in the list with an advance in viewership of 116%. The company’s stock hit a four-year low after the company released earnings that were well below expectations and its own estimates.
The company said it now expects revenue to be about $93 billion compared with $94.5 billion in the previous year. For the second quarter, UPS reported earnings per share of $1.79, 20 cents below expectations. Its revenues of $21.8 billion missed by about $400 million.
The weak results were due to low volumes during the quarter. However, the company said it is turning a corner and expects higher volumes going forward.
The stock price drop means the UPS dividend now yields a solid 5%, with the stock trading at a price-to-earnings ratio of 21.3.
Source: Barchart
NextEra Energy Partners Underperforms
NextEra Energy Partners (NEP) has taken the second position in the list with an increase in viewership of 86%. NEP, which is a master limited partnership used by clean energy giant NextEra Energy, has underperformed recently, with the stock down more than 50% in the past 12 months.
Rising interest rates have hit NEP’s ability to raise money at decent rates and buy assets from NextEra Energy. As a result, the dividend it returns to shareholders increased to 13%. Under the conditions that interest rates do not fall, this dividend yield might not be sustainable. Indeed, NEP’s payout ratio is currently 200%, meaning MLP cannot afford shareholder payouts from its free cash flow.
With the Federal Reserve indicating that it might cut interest rates soon, NEP could benefit.
Source: Barchart
Vale Stock Up on Strong Earnings
Vale (VALE) has taken the third position in the list with a surge in viewership of 30%.
The company’s stock appreciated in the past five days, after the company reported robust earnings. Net income of $2.77 billion was up from just $892 million during the same period last year. The strong increase in net income was largely due to a spike in iron ore revenues.
This means Vale could increase its dividend in the coming period. The company has a variable dividend and last quarter it cut it from 55 cents per share to 37 cents as financial results were not as strong.
Source: Barchart
MPLX Posts Strong Results
MPLX (MPLX) has placed last, experiencing a jump in viewership of 62%.
MPLX is also a master limited partnership formed by Marathon Petroleum, which owns energy infrastructure assets. The stock has been on a tear lately, as the company’s net income has been rising.
This master limited partnership pays a dividend of nearly 8% and its payout ratio is below 80%, meaning the company is in a healthy position. Meanwhile, it has rewarded shareholders with an increasing stock price, up 21% this year.
Source: Barchart
The Bottom Line
UPS shares have fallen after woeful results, but the company said it is turning a corner. NextEra Energy Partners has a high dividend, but it might not be sustainable. Mining giant Vale has released strong earnings, with the stock moving up slightly. Lastly, MPLX results have been improving, with investors benefitting from a high and sustainable dividend and rising stock price.
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