Posts related to ‘Dividend’

The More Focused, and More Opaque, Buffett & Berkshire Hathaway (BRK-A, BRK-B, BNI, UNP, NSC, GS, GE, TIF, HOG, WMT, COP, XOM, WFC, RSG, DOW, ETN, WBC, MCO, WLP, UNH, GSK, SNY, GCI, WPO)

This was an important week for investment guru and billionaire watchers to see which gurus were holding which stocks.  The full public equity holdings of Warren Buffett via Berkshire Hathaway Inc. (NYSE: BRK-A) were particularly of note, particularly with those B shares under “BRK-B” soon to split and giving a chance for even the less astute ranks of Joe Public to own a piece of the Berkshire dream.  Obviously the huge change is via the Burlington Northern Santa Fe Corp. (NYSE: BNI) buyout.  As part of this deal, Buffett is exiting Union Pacific (NYSE: UNP) and exiting Norfolk Southern (NYSE: NSC) stakes of about $600 million and $100 million, respectively, to avoid duplication and internal competition.  The rail transport play now accounts for about one-quarter of the total Berkshire Hathaway entity upon closing. But the less obvious position in that Warren Buffett in 2009 has made it clear that there will be a simpler and probably less “stock-hound” version of Berkshire Hathaway ahead.

Buffett has gone higher up the food chain and is likely to be a creditor now inside or to large institutions.  We have seen this during the crisis.  Buffett negotiated a better deal for Goldman Sachs Group (NYSE: GS) than the US Government was able to get.  Buffett’s preferred stock in Goldman Sachs has a dividend of 10% and is callable at any time at a 10% premium; but Buffett also got warrants to purchase $5 billion of common stock with a strike price of $115.00 per share, exercisable for a five-year term (4 years now), and Buffett would effectively get to pocket $61 per share if he exercised those all today at the market (and with a $2.6 billion warrant profit alone).

The General Electric Co. (NYSE: GE) stake was listed only as 7.77 million shares of common stock (about $125 million now), the same as it has been for quarters.  Yet last year Buffett came to the rescue with a $3 billion of perpetual preferred stock in a private offering with a dividend of 10% and warrants to purchase $3 billion of common stock.  The preferred is callable after 3-years (2 years now) at a 10% premium; the warrants have a strike price of $22.25 and are exercisable for a five-year term (4 years now).
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Posted on: November 19, 2009 – 8:59 am in Activist Investor, Bonds, Buffett, Conglomerates, Dividend, Editor's Picks, Infrastructure, Large Cap Stocks, Mergers and Buy Outs, Oil & Gas, Private Equity, Transports, Value Investing, , , , , , , , , , , , , , , , , , , , , , , ,

How High Are Intel Dividend Aspirations (INTC)

Intel LogoIntel Corporation (NASDAQ: INTC) is defying the old status quo of big technology companies which do not pay what most would consider real dividends.  Today’s quarterly dividend hike to $0.1575 from $0.14 is far from the first hike.  Even when you consider a 2% share gain to $20.20, the old dividend yield was already 2.7%.  The new dividend yield is 3.1% based on today’s share price.  It begs one to ask, “How high does Intel want its payout to be?”
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Posted on: November 16, 2009 – 10:51 am in Dividend, Semiconductor, Technology Companies,

Tech Giants Now Hold ~$265 Billion Cash To Spend (HPQ, COMS, INTC, AMD, MSFT, CSCO, AAPL, GOOG, ORCL, JAVA, QCOM, EMC, YHOO, DELL, AMZN, EBAY, ONT, BRCD, JDSU, STAR, VMW)

You have already seen the Hewlett-Packard (NYSE: HPQ) buyout of 3Com Corporation (NASDAQ: COMS).  But this week before that deal was announced we covered how mergers in the technology sector have been very slow to develop over the scale in which we and others think is possible for the sector.  After the Intel Corporation (NASDAQ: INTC) settlement with Advanced Micro Devices (NYSE: AMD), the tally of cash that is now estimated would be an implied $265 billion that is available for the tech giants in our 24/7 Wall St. Real-Time 500 to make acquisitions.

The giant cash balances are held by Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), and Oracle Corp. (NASDAQ: ORCL), assuming nothing happens with Sun Microsystems Inc. (NASDAQ: JAVA).  But players like QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY) are either all sitting with large amounts of cash or will be very soon.

We have broken out these technology, IT, software, and Internet companies by the cash amount they hold or what they have in a soon-to-be cash balance.  Of course only a fraction of this cash will be used for mergers.  But there is also a ton of room here for dividends and of course the share buybacks.

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Posted on: November 12, 2009 – 11:31 am in Consumer Electronics, Cramer, Dividend, Editor's Picks, Internet, Large Cap Stocks, Mergers and Buy Outs, PC Companies, Private Equity, Rumors, Semiconductor, Software, Stock Buybacks, Technology Companies, Telecom, , , , , , , , , , , , , , , , , , , ,

Tech Titans Still Have $269 Billion Cash For Deals (MSFT, CSCO, AAPL, GOOG, INTC, HPQ, QCOM, EMC, VMW, YHOO, DELL, ORCL, JAVA, AMZN, EBAY)

The recovery is on and mergers are happening, yet the technology sector has been slow to make deals.  Despite some deals already having taken place from the technology giants and that $260 billion cash balance which was there in the middle of last quarter is even larger now.  The tally for cash by our count is now right around $269 billion.  We looked through the top market caps of technology companies in our 24/7 Wall St. Real-Time 500 and this list is expanded now that some issues have been resolved in all the companies.  The stocks in this group are Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Intel Corp. (NASDAQ: INTC), Oracle Corp. (NASDAQ: ORCL), Sun Microsystems Inc. (NASDAQ: JAVA), Hewlett-Packard Company (NYSE: HPQ), QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY).

These few tech companies with the $269 billion cash that could be deployed for mergers, acquisitions, or the good old dividends are also listed before tallying up credit lines, factoring, debt sales, and other creative financing methods.  We have listed the suppositions and counting methods for each one to illustrate how much is available at each company.
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Posted on: November 10, 2009 – 1:07 pm in Consumer Electronics, Dividend, Editor's Picks, Internet, Large Cap Stocks, Mergers and Buy Outs, PC Companies, Private Equity, Rumors, Semiconductor, Technology Companies, Value Investing, , , , , , , , , , , , , , , , ,

52-Week High Club (ANF, DISH, RSH, REV)

Abercrombie & Fitch Co. (NYSE: ANF) surged over 7%  to a yearly high of $37.80 after the company was upgraded from “neutral” to “buy” by anlysts at Goldman Sachs.  

DISH Network Corp. (NASDAQ: DISH) was up over 8% at its peak at a yearly high of $20.80 after the company announced that it would pay a one-time dividend of $2 for all Class A and B shares.  

RadioShack Corp. (NYSE: RSH) rose over 14% today to a yearly high of $20.57 after the electronics retailer announced that it plans to sell Apple iPhones in some of its stores that are located in major metropolitian areas.  This announcement has precipitated some analyst upgrades.

Revlon Inc. (NYSE: REV) surged over 37% today to a yearly high of $15.06.  The company announced that it intends to offer $330 million in senior notes that will be due in 2015 in order to pay off debt due in 2011.  The company was also upgraded to “outperform” by BMO Capital Markets.

Garrett W. McIntyre

Posted on: November 9, 2009 – 3:59 pm in Dividend, Media, Retail, Satellite, , , ,

America’s Largest Companies Hold $994 Billion In Cash

 

The five hundred largest non-financial companies in the U.S. hold $994 billion in cash and short term investments, up about 8 percent from last year, according to an exclusive study conducted by The Wall Street Journal. Some of the largest tech companies like Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) have tens of billions on their balance sheets.

There is nothing new about corporations holding high cash balances during a recession, since companies want to maintain a buffer against falling sales and earnings losses. But it raises the question of what will happen to the cash as the economy recovers.

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Posted on: November 2, 2009 – 9:10 am in Dividend, ,

Visa Solid, But Not Immune (V, MA)

Visa LogoVisa Inc. (NYSE: V) is reporting some stellar earnings considering the environment and this appears to be the 6th or 7th beat against estimates.  The credit card processing giant posted $0.74 non-GAAP EPS vs. $0.72 EPS estimates from Thomson Reuters.  The company also initiated a share buyback of up to $1 billion.  As far as 2010, the company sees 11% to 15% revenue growth and is comfortable with 20% earnings growth.  There are some metrics still showing growth, but it is obvious that not even the great big Visa is immune to a global recession with a world full of price-sensitive shoppers.  The report is also rubbing off a bit on MasterCard Incorporated (NYSE: MA).
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Posted on: October 27, 2009 – 4:22 pm in Banking, Dividend, Earnings, Financial Stocks, ,

When Special Dividends Don’t Deliver (MOS, MOO)

Mosaic LogoSometimes special dividends make sense, and sometimes they do not.  Mosaic Co. (NYSE: MOS) traded lower most of the trading day after the fertilizer and potash giant declared a special cash dividend of $1.30 per share.  The company also reaffirmed its 2010 capital spending guidance, but the special dividend failed to excite many investors.  With a prior close of $51.79, that is a 2.5% special return.  Generally speaking, special dividends have a higher return than this.  They also tend to come when an entity feels that it has no better use of its capital.  Yet the reaction today was an unfavorable one, and there are reasons why.
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Posted on: October 26, 2009 – 4:27 pm in Agriculture, Dividend, ETF, ,

Stocks That Missed the Rally (ABT, MO, AWK, BKC, ENER, GENZ, KR, ORB, WMT, LEAP, PCS)

Here we are going into yet another earnings season.  We saw Monday how the market has rallied significantly from the March lows and the major indexes are even up in positive territory for the 2009 calendar.  The DJIA is up 51% from its absolute lows of March, and the S&P 500 has rallied more than 61% from its absolute lows in March.  If you look at the December 31, 2008 closing bell levels, the DJIA is now up about 12.75% and the S&P 500 is now up more than 19% year-to-date.

But almost as always, there are still some key very large and/or very active stocks which have not recovered anywhere close to the same amounts with the overall stock markets.  Some of these lagging stocks are Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT).  Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS).  We wanted to explore the forward values and relative performance, and the consensus estimates based upon Thomson Reuters data.  Only two of these stocks have market capitalization rates under $1 billion, and almost all are very actively traded and well known in their sectors.
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Posted on: October 12, 2009 – 5:03 pm in Biotech, Charts, Consumer Goods, Defensive Stocks, Dividend, Editor's Picks, Retail, Utilities, Value Investing, Water, , , , , , , , , , ,

52-Week High Club

American Eagle Outfiters Inc. (NYSE: AEO) hit a yearly high of $18.08 after the clothing vendor announced that it had raised its 3Q09 EPS estimate to $0.24-$0.26 from $0.22-$0.25.  

Anheuser-Busch InBev SA (NYSE: BUD) hit a yearly high of $48.19 after yesterday’s announcement that the company would be setting its theme park business to private equity firm Blackstone Group for $2.7 billion.

Colgate-Palmolive Company (NYSE: CL) hit a yearly high of $79.03 after the company declared a quarterly cash dividend of $0.44 per common share, payable on the 13th of November to all those in possession of the shares as of October 26th.

3Com Corporation (NASDAQ: COMS) hit s yearly high of %5.54 after yesterday’s annoumcement that the company had entered into contracts with the Republic of Korea Army and Republic of Korea Air Force to upgrade their local area networks.

Garrett W. McIntyre

Posted on: October 8, 2009 – 4:37 pm in ADR, Dividend, Food, Mergers and Buy Outs, Private Equity, Retail, Technology, , , ,

ConocoPhillips Gets More Shareholder-Friendly (COP, XOM, CVX)

Conoco LogoConocoPhillips (NYSE: COP) is trying to further adopt shareholder-friendly strategies with a higher payout and lower expenses.  With as much as this stock has lagged some peers until recently, that should be of little surprise.  It was back in early March when we listed ConocoPhillips as one our picks in the energy sector which might double from their lows.  Shares were around $37 at the time and we noted that they would have to hit $68 for that double to hold true.  And now shares are up close to $49 and look as though that they want to challenge the $50 mark.

In order to generate more cash, the company cut its cap-ex budget for next year to about $11 billion for exploration and production and to replace reserves.  It will also sell what is said to be about $10 billion in assets.  To entice shareholders, it also lifted its quarterly dividend 6.4% to $0.50. This puts it above a 4% yield, which looks on the surface to be the highest of the major US-based integrated oil players such as Chevron Corp. (NYSE: CVX) and Exxon Mobil Corp. (NYSE: XOM).  It also marks what appears to be the 7th year in a row to boost its dividend.

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Posted on: October 7, 2009 – 12:36 pm in Commodities, Dividend, Oil & Gas, Shareholder Issues, , ,

The Unusual Suspects (AA, MOS, YUM, CVC, CIT, LOCM, RVSN, WFC)

bull-and-bear-image2It is the weekend and that means a review of last week’s unusual suspects and a review for key stocks in the week ahead.  Technically earnings season gets its first earnings report from a DJIA component in ACLOA Inc. (NYSE: AA) this week, as well as earnings from The Mosaic Company (NYSE: MOS) and from Yum! Brands, Inc. (NYSE: YUM).  Other key stocks to watch will be Cablevision Systems Corporation (NYSE: CVC), CIT Group, Inc. (NYSE: CIT) on the ropes, the real or unreal takeover chances for Local.com Corp. (NASDAQ: LOCM), and the unusual trading in Radvision Ltd. (NASDAQ: RVSN) and Wells Fargo & Company (NYSE: WFC).  We have provided more detailed information and analysis on each story below.
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Posted on: October 4, 2009 – 10:34 am in Agriculture, Banking, Buffett, Cable Companies, Calendar, Commodities, Dividend, Earnings, Editor's Picks, Food, Internet, Mergers and Buy Outs, Options, Private Equity, Rumors, The Week, Trading Alert, , , , , , , ,

52-Week High Club

Jabil Circuit (NYSE: JBL) hit a yearly high of $13.47 after beating both guidance and analyst estimates for its quarterly earnings.

Kohl’s Corporation (NYSE: KSS) hit a yearly high of $57.19 after the company announced the opening of 37 new stores.

Och-Ziff Capital Management (NYSE: OZM) hit a yearly high of $12.24 as the company continues to recover from a significant decline in assest under management.

Petrobras Energia Participaciones SA (NYSE: PZE) rallied over 180% to a yearly high of $17.97 after it announced that the company was completing reorganization moves.

TransDigm Group Incorporated (NYSE: TDG) hit a yearly high of $49.94 after announcing that it would offer $425 million of senior subordinated notes in order to fund a special dividend.

Virgin Media Inc. (NASDAQ: VMED) hit a yearly high of 13.97, capping off a monthly gain of 17%.

Yahoo! (NASDAQ: YHOO) hit a yearly  high of $17.80, capping off a monthly gain of nearly 20%.

Garrett W. McIntyre

Posted on: September 30, 2009 – 4:26 pm in Aerospace, Cable Companies, Defense, Dividend, Internet, Media, Oil & Gas, Technology Companies, Telecom, , , , , , ,

52-Week High Club

Chipotle Mexican Grill (NYSE: CMG) hit a yearly high of $97.33 as options traders place bets in anticipation of positive earnings.

Dr Pepper Snapple Group (NYSE: DPS) hit a yearly high of $28.58 as Citigroup gives the company a buy rating in anticipation of the declaration of a dividend or stock buy backs in 2010.

Mead Johnson Nutrition Company (NYSE: MJN) hit a yearly high of $43.68 as rumors of a takeover circulated.  The shares promptly dropped as the rumored purchaser, Danone SA, denied the reports.

Thor Industries (NYSE: THO) hit a yearly high of $30.64 as it reported that its 4Q profits had quadrupled.  

Valassis Communications (NYSE: VCI) hit a yearly high of $25.25, boosted by positive news coming out of Gannett.

Walgreen Company (NYSE: WAG) hit a yearly high of $37.53 after the company’s earnings beat analysts estimates.

Garrett W. McIntyre

Posted on: September 29, 2009 – 4:12 pm in Analyst Calls, Dividend, Food, Media, Mergers and Buy Outs, Stock Buybacks, Transports, , , , , ,

Tech Titans Holding $260 Billion In Cash (DELL, PER, ORCL, JAVA, MSFT, AAPL, IBM, GOOG, CSCO, INTC, HPQ, QCOM, EMC, YHOO)

The economy is obviously getting better, so long as you are not one of the unemployed or about to lose your job.  Now with more than a 50% rally from the March lows and a Dow Jones Industrial Average challenging the 10,000 level, suddenly everyone wants to put on their investment banker hats again and look for buyers and buyout candidates after deals are announced.  This week’s Dell Inc. (NASDAQ: DELL) deal for Perot Systems Corp. (NASDAQ: PER) was a $3.9 billion acquisition versus $12.7 billion in cash and equivalents held at the end of the quarter.  The Oracle Corp. (NASDAQ: ORCL) deal for Sun Microsystems Inc. (NASDAQ: JAVA) is valued at $7.4 billion, or $5.6 billion net of Sun’s cash and debt.  We went back through our list from September 2, 2009 where we noted that outside of the financials  in the 20 largest US companies had a cash hoard of $335 billion that could be used for mergers and acquisitions, and that is not accounting for lines of credit, stock or debt that could be sold, and other means of financing a deal.  While nowhere near all of the cash will ever be used, many companies could pay big dividends before any tax changes.

So we wanted to look through the technology sector and after we looked through the top 100 markets caps in our 24/7 Wall St. Real-Time 500 we added a few new additions in the tech sector that still had over $5 billion in cash.  Out if the $335 billion from those in the top twenty, we broke out Microsoft Corporation (NASDAQ: MSFT), International Business Machines (NYSE: IBM), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Cisco Systems Inc. (NASDAQ: CSCO), Intel Corp. (NASDAQ: INTC), Oracle Corp. (NASDAQ: ORCL).  Even after a huge rally, $335 billion and then some could go a very long way for strategic and bolt-on acquisitions as a positioning strategy for the next decade.  Now, going further down the list of the top 100 companies with $5 billion or more in cash from tech companies alone adds in Hewlett-Packard Company (NYSE: HPQ), QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), and Yahoo! Inc. (NASDAQ: YHOO). When we tally up all the cash, there is over $260 billion available from these few tech companies that could be deployed for mergers, acquisitions, or the good old dividends.  Again, that is before tallying up credit lines, factoring, debt sales, and other financing methods.
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Posted on: September 25, 2009 – 6:41 am in Consumer Electronics, Dividend, Editor's Picks, Internet, Large Cap Stocks, Mergers and Buy Outs, PC Companies, Private Equity, Rumors, Semiconductor, Software, Technology Companies, Value Investing, , , , , , , , , , , , , ,

Chimera & Annaly Dividend Hike, Profits In Mortgages (CIM, NLY)

Money Stack PicInvesting in mortgages might not be as bad as many thought.  Chimera Investment Corporation (NYSE: CIM) has already raised more capital on more than one occasion since coming public in 2007 when the mortgage arena was in the process of going from weak to bottomless.  We were intrigued by its vulture investing intentions as it bought up distressed mortgages, particularly as it was tied to the very successful Annaly Capital Management, Inc. (NYSE: NLY).  Despite the notion that Chimera became a vulture too soon and well before any bottom could be found in sight, Chimera must be doing pretty well again.  Ditto on Annaly.  This mortgage REIT status requires each to pay out 90% of its income and Chimera just hiked its dividend to $0.12 for the Q3-2009 period.  Annaly also just hiked its dividend payout today to $0.69, which might actually be its highest payout ever.
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Posted on: September 21, 2009 – 5:03 pm in Bonds, Dividend, Financial Stocks, Housing, REIT, ,

Merger Stocks With Significant Arbitrage (CYCL, T, HNBC, FNFG, PCAP, PSEC, JAVA, ORCL, VM, S, DT, IPCS)

Broken Money Merger ImageDespite the notion that times are tough, mergers are still happening.  If you look back at what we noted, the top 20 companies by market cap had over $335 billion in raw cash that could be used for acquisitions and dividends.  Two of those are in deals noted herein.  We are seeing some significant merger-arbitrage spreads in five of the existing mergers that are currently in the pipe.  These deals are as follows:

  • Centennial Communications Corp. (NASDAQ: CYCL) by AT&T Inc. (NYSE: T);
  • Harleysville National Corp. (NASDAQ: HNBC) by First Niagara Financial Group (NASDAQ: FNFG);
  • Patriot Capital Funding Inc. (NASDAQ: PCAP) by Prospect Capital Corp. (NASDAQ: PSEC);
  • Sun Microsystems Inc. (NASDAQ: JAVA) by Oracle Corp. (NASDAQ: ORCL);
  • Virgin Mobile USA Inc. (NYSE: VM) by Sprint Nextel Corp (NYSE: S).

We have provided specific background and added in some color to highlight the risks and chances of closure of each deal.  There are some significant opportunities here in some of these deals, and some significant risks in others.
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Posted on: September 18, 2009 – 11:38 am in Activist Investor, Banking, Dividend, Editor's Picks, Insider Activity, Mergers and Buy Outs, Telecom, Value Investing, , , , , , , , , , , ,

Can Verizon Raise Dividend Indefinitely? (VZ, T)

Verizon LogoVerizon Communications Inc. (NYSE: VZ) did not immediately rise despite the announcement from the company that it was raising its quarterly dividend.  Most dividend hikes do not raise the price of stocks immediately, but this 3+% rise in the dividend is an interesting one because this is the third straight year that the company has raised its dividend.  The new dividend is $0.475 per share per quarter,  up from a $0.46 dividend for the last four quarters and a $0.43 dividend before that.

Some may point out that this is actually the smallest dividend hike compared to the two prior dividend hikes.  Frankly, in today’s business and economic climate that is a whiners’ argument that is no different than lottery ticket winners complaining about all the taxes they will have to pay.  What we want to see is how much it can grow down the road.   And just as importantly, we wanted to see how this stacks up against rival AT&T Inc. (NYSE: T) and its dividend history and the future dividends.
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Posted on: September 3, 2009 – 2:30 pm in Defensive Stocks, Dividend, Telecom, Utilities, Value Investing, ,

M&A: America’s Top Companies Hold $335 Billion Cash (XOM, MSFT, JNJ, PG, BRK-A, IBM, T, AAPL, GOOG, CVX, CSCO, KO, INTC, ORCL, BAC, WFC, JPM, GE, PFE)

Money Stack ImageNow that we are out of the woods in the crash scenario, assuming this week is no ill omen, investors may want to know which of the big companies would start to deploy their billions and billions of dollars in cash for large mergers or strategic bolt-on acquisitions. In all of these companies, we are not taking the long-term or short-term debt obligations into account.  This is merely the cash, cash equivalents, and the long-term investments listed on the books.

But as these are the biggest companies in the world with what should be credible balance sheets (in most cases anyhow), we are also including a second combined figure for “receivables and inventories” for a few of these companies to show what the firms could use for additional sources of capital…. These figures do not include untapped credit lines and shelf registrations which could amount to untold billions more.  Because of this calculation, our figures may differ slightly from what companies have listed  as cash and equivalents.

Can all of this cash go for mergers?  What about for dividends?  No way.  But a large portion of it could be used for mergers and buyouts under the right circumstances.  We removed the companies which are either permanently out of the game of M&A or those which are temporarily out of it.  But of the fourteen mega-caps (over $100 billion in market cap) which we did cover, you would be shocked at the cash balance these companies are sitting on without even considering the total cumulative effect of credit lines, inventories, receivables, and open shelf registrations.  The first total cash figure comes to a whopping $335 billion.  This number is far more if you count the companies with exceptions.

These major companies broken down by cash balance and what sort of merger these could consider are Exxon Mobil Corp. (NYSE: XOM), Microsoft Corporation (NASDAQ: MSFT), Johnson & Johnson (NYSE: JNJ), Procter & Gamble Co. (NYSE: PG), Berkshire Hathaway Inc. (NYSE: BRK-A), International Business Machines (NYSE: IBM), AT&T Inc. (NYSE: T), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), Chevron Corporation (NYSE: CVX), Cisco Systems Inc. (NASDAQ: CSCO), Intel Corp. (NASDAQ: INTC), Oracle Corp. (NASDAQ: ORCL).  Even after a huge rally, $335 billion and then some could go a very long way.
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Posted on: September 2, 2009 – 5:05 pm in Buffett, Conglomerates, Dividend, Editor's Picks, Large Cap Stocks, Mergers and Buy Outs, Oil & Gas, Private Equity, Rumors, Stock Buybacks, Technology Companies, Value Investing, , , , , , , , , , , , , , , , , , ,

Can Altria Raise Dividend Indefinitely? (MO, PM, RAI, LO)

Stop Smoking SignSome companies are unmatched on the rate at which they pay out their dividends.  Former DJIA component Altria Group, Inc. (NYSE: MO) definitely falls into that category, as do many tobacco sector peers.  Today came the announcement that it is increasing its quarterly dividend by over 6% to $0.34 per share of common stock per quarter.  The prior quarterly dividend rate was $0.32 per quarter.  At an annualized rate of $1.36 per share and with shares at $18.15, this generates a yield right at 7.5% per year.  The risk-free yield of the comparable Treasury is about 0.44% and the average yield of all S&P 500 stocks is roughly 1.88%.  What we are curious about is how long through time Altria can keep paying dividend rates of this magnitude.
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Posted on: August 27, 2009 – 2:26 pm in Dividend, Tobacco, , , ,