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.
Carl Icahn’s namesake public investment vehicle Icahn Enterprises is first in the list after the company’s favorable settlement with the Securities and Exchange Commission made its high dividend attractive to investors. Second in the list is business technology investor Hercules Technology, with the company’s high dividend and low valuation attracting interest from income investors. Third in the list is Walmart Stores, whose strong results buoyed the stock. Last in the list is Armour Residential REIT, which invests in agency mortgage-backed securities.
Don’t forget to read our previous edition of trends here.
Icahn Enterprises Dividend Attractive After SEC Settlement
Icahn Enterprises (IEP) has taken the first position in the list, as the investment vehicle of activist investor Carl Icahn settled a dispute with the Securities and Exchange Commission. Icahn Enterprise has seen its viewership increase 36%.
Icahn allegedly failed to report to the SEC that Icahn Enterprises pledged securities for margin loans. After an inquiry, Icahn agreed to pay $2 million to settle the charges.
The SEC investigation came after short seller Hindenburg Research alleged in early 2023 that Icahn overvalued its own securities and questioned the activist’s practice of borrowing on margin. The stock immediately lost half its value and has not recovered since then. The company also cut its dividend in half at the time from $2 to $1.
Despite the cut, Icahn’s dividend yields an impressive 25%, although it remains unclear how sustainable it is given that the company’s operational performance has disappointed of late.
Source: Barchart
Hercules Capital Drops Following Results
Hercules Capital (HTGC) has taken the second position in the list with an advance in reader traffic of 29%. Hercules, a business development company lending to startups in the technology sector, has seen its stock drop about 15% in the past month, possibly because it may have seemed overvalued to some investors. Hercules shares were trading at about $21 per share, while the company reported net asset value of $11.43 per share.
The stock trades at a premium because the company’s dividend yield of 13% looks sustainable. Its loan book seems to be high quality, with the majority of loans secured. Meanwhile, its net investment income provides 128% coverage for the base cash distribution to shareholders.
Source: Barchart
Walmart Stock Surges on Strong Earnings
Walmart (WMT) has placed third in the list, enjoying a spike in viewership of 21%. The largest retailer in the U.S. has again reported blockbuster results, with revenues growing about 5% in the second quarter to $169.3 billion and adjusted earnings up 10%.
In a tough economic environment with rising prices, Walmart has gained market share from rivals by providing value to customers. Walmart’s grocery business has also been boosted by higher prices for restaurant dining, prompting value-seeking customers to cook meals at home.
Walmart’s dividend yields about 1%, but the stock is up 40% so far this year, outperforming competitors like Target and Dollar General by a wide margin.
Source: Barchart
Armour Residential
Armour Residential (ARR) has taken the last place in the list this fortnight, with an advance in viewership of 18%.
Armour Residential, an investor in agency-backed mortgage-backed securities, may benefit from potentially lower interest rates, as their cost of borrowing will decrease and the spread between the interest rates they pay and the interest rates they get can get bigger.
Armour shares are still down about 13% so far this year. Its dividend, however, has more than offset the weak stock price performance, given that it yields 14.3%.
Source: Barchart
The Bottom Line
Icahn Enterprises has settled a dispute with the Securities and Exchange Commission, but the stock remains beaten down. Hercules shares have dropped following financial results that failed to justify its premium valuation. Walmart reported blockbuster results, with its stock outperforming competitors this year. Armour Residential may benefit from potentially lower interest rates.
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