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.
Dow Inc. has taken the first position on the list, as the company’s recent stock decline raised its dividend yield. PepsiCo is second on the list, as the beverage giant cut its earnings guidance due to weak sales. Third on the list is Pfizer, which has been battling with falling sales. Last in the list is energy infrastructure company Enbridge, which posted a doubling of profit in the third quarter.
Don’t forget to read our previous edition of trends here.
Dow Sales Fall on Weak China and Europe Business
Chemical materials juggernaut Dow Inc. (DOW) has taken the first position on the list this fortnight, with an increase in traffic of 56%. Dow Inc. has reported mixed results recently, forecasting weaker-than-expected revenue for the fourth quarter. The company said it expects revenue of $10.7 billion, versus about $10.8 billion expected by analysts.
As a result of weak demand in China and Europe, Dow Inc. has launched a strategic review of some European assets, including its polyurethane business. Another reason for the review of European assets cited by the company is the challenging regulatory environment.
Slowing growth has led to a decline in the stock price of about 36% since a peak was reached in mid-2022. Recently, the stock hit a low not seen since September 2022. As a result of the stock drop, Dow dividend yield increased, paying now shareholders around 6.37% per year.
Since Dow was spun off from DowDuPont in mid-2019, the quarterly dividend of 70 cents per share has not changed.
Source: Barchart
PepsiCo Cuts Guidance
PepsiCo (PEP) has taken the second place on the list with an increase in traffic of 52%, not far from Dow. PepsiCo shares have been hovering near 12-month lows, after the company cut its revenue guidance for the year on the pulling back of consumers across all major regions.
PepsiCo said it believes growth for the full year will come in the low single digits compared to about 4% earlier. In the third quarter, the company was hurt by a recall of its QuakerⓇ granola bars. PepsiCo is now focusing on making its products more affordable for customers in a bid to lure them back.
The beverage giant is also continuing its focus on bringing to market products that appeal to health-conscious customers. PepsiCo’s competitor Coca-Cola is facing the same fate with slower demand amid a slew of price hikes.
PepsiCo has been increasing its dividend for 53 years in a row, with the dividend now yielding 3.41%.
Source: Barchart
Pfizer Shares Continue to Drop
Pfizer (PFE) is third on the list with an advance in traffic of 28%.
Pfizer shares have continued to decline in recent weeks, as the company faces slowing sales in some of its key products, including the COVID-19 vaccine, and there aren’t many drugs in the pipeline to hope for a revival of sales growth.
Under pressure from activist investor Starboard Value, Pfizer is now exploring a sale of its hospital drugs division, which it acquired for $17 billion nearly 10 years ago. The move should allow the company to reduce its huge debt pile of more than $60 billion.
Despite making a few very pricey acquisitions in recent years, including splashing $43 billion for cancer drugmaker Seagen, the company’s sales have sagged. Revenue declined more than 40% in 2023, to $58 billion.
Source: Barchart
Enbridge Profits More Than Double
Enbridge ENB (ENB) is last on the list with a jump in traffic of 26%. The stock of the Canadian pipeline operator has been on a tear lately, rising nearly 20% over the past six months. Enbridge results have been strong lately, with revenue increasing 52% in the quarter ending September 30. Net income surged around 124%.
Demand for natural gas has been increasing since the U.S. and Canada have moved toward cleaner energy alternatives. Natural gas is cleaner than coal, although it still has emissions. Demand is expected to skyrocket as the artificial intelligence revolution is prompting an unprecedented buildout of data centers. An AI data center consumes about ten times more energy than traditional data centers. Most of that energy demand is expected to be fulfilled with natural gas in the coming years.
This trend is poised to benefit Enbridge in the coming years. In addition to a strong stock price performance, Enbridge pays a dividend of more than 6%.
Source: Barchart
The Bottom Line
Dow Inc. expects weaker results due to declining demand in Europe and China. PepsiCo has cut its revenue guidance on slowing demand, but the company is looking to lure back customers. Pfizer has taken another hit on its stock price, as the company is looking to shed assets to pay back its debt. Canadian energy pipeline operator Enbridge is likely to benefit from growing demand for natural gas.
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