Dividend.com analyzes the search patterns of our visitors every fortnight. 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.
Costco Wholesale has taken the first spot on the list as the company has seen strong sales amid the coronavirus pandemic, boosted by Black Friday and the upcoming holidays. Second on the list is General Electric, the fallen giant of the U.S. industry that is preparing for new job cuts in its aviation division. Icahn Enterprises, the investment vehicle arm of activist investor Carl Icahn, is third on our list. Wells Fargo, one of the largest U.S. banks, closes out the list.
Don’t forget to read our previous edition of trends here.
Costco
Costco Wholesale (COST) has taken the first position on the list this week, with a rise in viewership of 42%. This is unsurprising, as the wholesaler recently announced a monster special dividend thanks to strong sales and financial results.
On November 16, Costco declared a special dividend of $10 per share, or a total of $4.4 billion, to shareholders of record as of December 2, payable on December 11. Costco, which has 802 warehouses in the U.S., Canada and the U.K., among other countries, said it can afford to pay the dividend thanks to its strong balance sheet while “preserving financial and operational flexibility.” This is on top of the company’s regular dividend of $2.75, which yields 0.71%.
Costco has seen its sales surge recently as the coronavirus pandemic boosted demand for food and other daily necessities. For the month of October, comparable sales advanced by 14.4%, comfortably beating expectations of 10.5%. Sales increased by 13.6% in the U.S., and 19% internationally. At the same time, online sales surged by a whopping 91% as customers avoided heading out to stores in person.
Shares in Costco are up nearly 35% this year, beating Walmart (WMT) by around five percentage points and the S&P 500 by 22 percentage points, as of November 30 close. However, Costco underperformed rival Target (TGT) by nine percentage points.
Source: Barchart.com
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General Electric
General Electric (GE) is second on the list as the company’s suffering does not seem to be over quite yet. Media reports indicate that GE is preparing for another round of job cuts at its aviation division to cope with the negative effects of the coronavirus pandemic on the aviation industry overall.
The hope for GE is that it will improve its cost structure at the division that, until last year, employed around 52,000, and also help the company remain better prepared when the market conditions improve. Earlier this year, GE announced to cut 13,000 jobs at the aviation unit, or 25% of its staff.
GE’s aviation unit saw its revenues fall 32% for the first nine months of 2020. Unfortunately for the company, aviation had been the only bright spot before the pandemic. The financial services unit and its core power business had put the company in dire straits, prompting an asset portfolio reshuffling.
GE shares are down around 5% for the year. The company cut its annual dividend to just $0.04 per share, which still yields 0.4%.
Source: Barchart.com
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Icahn Enterprises
Icahn Enterprises (IEP), the investment vehicle of activist investor Carl Icahn, is third on the list with a 5% advance in viewership.
Icahn Enterprises, which owns automotive repair company Pep Boys, oil refiner CVR and Trump Entertainment Resorts, among others, has a dividend of $8 per share, amounting to an impressive yield of around 16%. Parts of Icahn Enterprises businesses have been hit by the pandemic, with the stock losing nearly 20% this year.
In the third quarter, Icahn Enterprises lost $714 million, or $3.14 per share, largely due to losses in its investment unit, energy and automotive. The company recently unveiled a leadership transition from Carl Icahn, who is 84 years old, to his son Brett, who returned to the firm after four years.
Source: Barchart.com
Wells Fargo
Wells Fargo (WFC) has taken last spot on the list with a small rise in viewership of 2%. Shares in Wells Fargo have lost nearly half of their value this year as the bank’s results suffered from the COVID-19 pandemic and the ensuing decrease in interest rates.
However, Wells Fargo and its banking peers received a bit of good news when President-elect Joe Biden announced he will hire former Federal Reserve Chair, Janet Yellen, as his Treasury Secretary. This soothed investors’ concerns that the job could land in the hands of a critic who could impose tough regulatory requirements on the sector.
Wells Fargo cut its dividend this summer by 80% to an annualized $0.40, which yields 1.41%.
Source: Barchart.com
The Bottom Line
Costco shares have benefitted from strong sales this year as the coronavirus pandemic boosted demand for food and other basic necessities. General Electric is again cutting jobs at its aviation division, as it seeks to reposition itself for the eventual recovery in the sector. Veteran activist investor Carl Icahn is finally preparing to give the reins of his investment empire to his son Brett. Finally, Wells Fargo continued to suffer this year, although the selection of Janet Yellen as Treasury Secretary softened the blow.
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