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Recent Articles
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Extra Space Storage Pursues the Winner’s Curse; LSI Shareholders Should Take the Money and Run
Apr 21, 2023
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Image Source: Extra Space Storage.
It would seem that Life Storage wants nothing to do with Public Storage, first refusing to negotiate with Public Storage regarding its proposal to merge, then rolling out a revised severance package for its CEO, CFO and COO on March 17, and now most recently announcing that it would tie the knot with Extra Space Storage on April 3.
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Dividend Increases/Decreases for the Week of April 21
Apr 21, 2023
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Let's take a look at firms raising/lowering their dividends this week.
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Philip Morris’ First-Quarter 2023 Results Just Okay
Apr 20, 2023
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Image: Philip Morris’ smoke-free product portfolio. Image Source: Philip Morris 2022 Form 10-K.
We like that Philip Morris has raised its quarterly dividend by more than 170% since it became a public company in 2008, reflecting a compound annual growth rate of ~7.5%, and further growth in the dividend payout should ensue. The company’s Dividend Cushion ratio stands at 1.0, but the mediocre ratio is more of a function of the company’s large net debt position than anything else, as free cash flow generation remains robust. Shares of Philip Morris yield ~5% at the time of this writing.
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AT&T Disappoints Again
Apr 20, 2023
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Image: AT&T is back in the doghouse, as free cash flow generation came in worse than expected during its first-quarter 2023 results. Image Source: AT&T.
AT&T’s forward estimated dividend yield of 5.6% is attractive at face value, but the economics of its business continue to leave a lot to be desired, in our view. Not only is the company saddled with a tremendous amount of net debt to the tune of a whopping $134.7 billion, resulting in an annualized net debt to adjusted EBITDA ratio of 3.22x, but the company operates a capital-intensive model that eats into its operating cash flow.
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