Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
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.
High dividend company HSBC Holdings was first in the trends list this week, followed by the lumber and wood sector. Third in the list is another financial company, namely private equity group Blackstone. Boeing is last in the list as the company is on track to reach a deal with Brazil’s Embraer.
HSBC Holdings (HSBC ), the company yielding an impressive dividend of 8.6%, has seen its viewership rise 40% this the past week.
HSBC, which posted rather disappointing performance in past years, although in line with the entire financial industry, recently said it wants to employ artificial intelligence to battle money laundering. Instead of an army of compliance workers verifying suspicious transactions, HSBC enlisted the help of U.K. startup Quantexa, the software of which will help screen vast amounts of data and compare it with publicly available data to identify dodgy transactions.
By using artificial intelligence, the company expects to save money on compliance while becoming more effective at spotting nefarious dealings. HSBC has been particularly affected by suspicious transactions, receiving billions of fines in the past year for failing to stop money laundering.
The company’s stock price has dropped nearly 6% since the beginning of the year, although it is up more than 3% in the past five days. HSBC has underperformed its peers in recent years, in no small part due to the penalties it incurred for processing transactions linked to criminal activities.
However, HSBC has a big exposure to the emerging markets, particularly Asian economies, which are growing fast. Combined with the high dividend, HSBC may become attractive to investors in the coming years.
Dividend-paying lumber and wood stocks have taken the second place in the trends list this week with a 39% rise in viewership, not far from HSBC.
The lumber and wood industry has had a good run in recent years, thanks to an economic recovery in the U.S. and Canada that lifted the housing market, which has a big influence on the state of the industry. Norbord (OSB ) has been among the top lumber performers, surging 151% in the past 12 months, as its adjusted earnings more than doubled in 2017 compared to the prior year on strong housing starts in the U.S. and a booming European business. Norbord also pays the second-biggest dividend, 4.73%, after Enviva Partners (EVA ), which yields nearly 9%.
Enviva, a pellets producer, also had a strong year, although its stock price only surged by a third in the past 12 months. The company’s revenues increased by around $80 million to $540 million in 2017, but its bottom line suffered due to an asset drop-down.
Weyerhaeuser (WY ), the largest company in the industry by far, also saw its revenues and earnings grow in 2017, although at a smaller rate. Weyerhaeuser’s stock is up 12% in the past 12 months.
Blackstone Group (BX ) has seen its traffic rise 36% this past week, as readers are attracted by the private equity firm’s relatively stable stock and high dividend. The private equity group, which has $430 billion in assets under management, has seen its stock price fall more than 1% in the past five days, extending year-to-date losses to more than 3%. However, Blackstone’s impressive 11% annual dividend more than offsets poor equity performance.
Blackstone’s stock price fell after news that it is struggling to raise $20 billion as part of a new $40 billion U.S. infrastructure fund jointly launched with the Saudi Public Investment Fund. Saudi Arabia contributed $20 billion but Blackstone has struggled to raise its part, according to some media reports. As of the beginning of April, Blackstone raised just $575 million, representing only 3% of its targeted sum.
The investors hesitated to invest in the new fund amid disagreements with Saudi officials over the creation of an investment committee, although Blackstone itself said the relationship with Saudi Arabia has never been stronger.
Aviation equipment manufacturer Boeing (BA) has seen its viewership edge up 35% in the past week, as the company is close to reaching a deal to buy Brazilian peer Embraer. Boeing, which pays an annual dividend of more than 2%, has seen its shares surge as much as 83% in the past year, although in the past five days the stock has fallen nearly 3% amid broad market turbulence.
Boeing and Embraer are mulling the creation of a joint venture that would be controlled by the former in order to combine their marketing, manufacturing and engineering efforts to save costs. Talks between Boeing and the Brazilian government, which owns a so-called golden share in Embraer, are going well, but a final agreement is still far from a done deal.
Global bank HSBC is considering the use of artificial intelligence to spot money laundering schemes through its banks, as the company has been hit in the past by billions of fines for its failure to stop illicit transactions. Lumber and wood stocks are having an impressive ride as housing demand in North America and Europe is strong. Meanwhile, Blackstone is struggling to raise $20 billion for a U.S. infrastructure fund and Boeing is close to reaching a joint venture deal with Brazilian peer Embraer.