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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.
Companies that have performed relatively better than their peers in the middle of the COVID-19 pandemic trended this week. Consumer giant Procter & Gamble was first in the list as its sales surged, thanks to consumers stockpiling on a range of its products. Johnson & Johnson’s results were so good that the firm, second on the list, decided to increase its dividend even as many others cut or canceled payouts to shareholders. Costco is third in the list as this retailer also increased its dividend. Last in the list is Oneok, a midstream services provider that reaffirmed its dividend despite problems in the energy market.
Don’t forget to read our previous edition of trends here.
Procter & Gamble (PG) has taken the first place in the list this week with an advance in viewership of 53%. The consumer giant reported last week that its revenues rose 10% in the fiscal third quarter, thanks to consumers stockpiling on products such as Charmin-brand toilet paper and Bounty-brand paper towels. However, the company reduced its forecast for 2020 income on the back of foreign currency headwinds.
P&G’s home-care segment, which includes brands like Tide and Ariel, posted a 10% growth in the third quarter, while its baby, feminine, and family care unit advanced 7%. Its grooming business, which consists of razors Gillette and Venus, reported falling sales. The company also maintained its outlook for organic sales growth for the fiscal year 2020 but revised down revenues to a range of 3-4% growth from 4-5% growth previously due to currency headwinds.
Jon Moeller, the company’s chief operating officer and chief financial officer, noted that consumer behavior is likely to be “forever altered” by the crisis with an increased focus on “hygiene and cleaning.” In other words, demand for some P&G products is likely to increase – and remain at a high level.
P&G also raised its quarterly dividend by 6% to $0.79 cents per share. The pay date is on May 15 to shareholders of record as of April 24. P&G has been increasing its dividend for more than six decades and it currently yields around 2.60%.
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Johnson & Johnson (JNJ) has hiked its dividend payout by more than 6% despite warnings that its previous forecast for earnings will not be met due to the COVID-19 pandemic. The U.S. drugmaker said it will pay $1.01 per share, up from 95 cents previously. As such, the company has seen its viewership rise 41% over the past two weeks.
In the first quarter, the company posted earnings per share of $2.30, beating analysts’ expectations of $2, while revenues of $20.7 billion was more than $1 billion higher than estimates. However, the company reduced its earnings guidance for full-year 2020 to a range of $7.50-$7.90 from its prior estimate of $8.95 to $9.10 due to the negative impact of the COVID-19 pandemic.
The company’s pharma business increased nearly 9% to $11.1 billion year-over-year, while its consumer unit was up 9.2% to $3.6 billion. At the same time, sales in its medical device unit declined more than 8% to $5.9 billion due to a drop in elective procedures as hospitals delayed non-life threatening surgeries as a result of the COVID-19 crisis.
Shares in Johnson & Johnson declined as much as 23% this year but are now up 2.6%, in part due to the strong results, as well as a promising experimental vaccine, expected to begin human testing in September and could be available for emergency authorization in early 2021.
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Large U.S. retailer Costco (COST) raised its quarterly dividend by 8% to 70 cents per share, as the company has seen an increase in revenues for March due to higher customer demand. As a result, Costco has seen its viewership advance 30% over the past two weeks.
The dividend hike came shortly after the firm revealed that its March sales rose nearly 12% to $15.49 billion year-over-year. For the 31 weeks ending April 5, the company’s net sales were $96.25 billion, an increase of 9% compared to the similar period last year. During the same period, its international arm, which includes the U.K, Mexico and Japan among others, posted the largest increase in sales by 8.4%, followed by the U.S. with 7.9% and Canada with 6.4%.
As the pandemic has locked consumers inside their homes, Costco’s e-commerce sales advanced by nearly 50% during the five weeks ending April 5.
Costco’s dividend yield currently stands at 0.90% and its payout ratio is 32%. The company has been growing its dividend for the past 16 years.
Oneok (OKE) has kept its quarterly dividend intact at 93.5 cents per share, despite its share price tumbling due to the difficult commodity environment. Oneok’s dividend yield currently stands at a whopping 13.2%.
Oneok is an $11 billion market-capitalization midstream service provider and owner of natural gas liquids systems. Its stock has plunged 62% since the start of the year as commodity prices, especially oil, have declined to lows not seen in decades. As a result of weak commodity prices, the company decreased its capital spending for 2020 by $500 million to around $2 billion.
Oneok assured investors that the current level of dividend is a prudent financial decision as its balance sheet is strong and dividend coverage remains healthy.
Procter & Gamble, Johnson & Johnson, and Costco have raised their dividends despite many companies cutting payouts to shareholders as a result of disruption stemming from the COVID-19 pandemic. As it happens, these three companies have largely benefitted from sales increases as consumers stockpiled on a variety of health and food-related products. Oneok, a midstream services provider, kept its dividend intact despite its stock tumbling this year.
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