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Trending: Kenon Declares Monster Dividend After Capital Reduction

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.

Kenon Holdings, a holding company that owns a power generation company, has taken the first position in the list after announcing a large one-off dividend as a result of a capital reduction. Shipping company FedEx is second in the list, as the company reported strong financial results. New Residential Investment trended third after the real estate company internalised its management. Chip-maker Broadcom is last as the company is preparing for increased regulatory scrutiny on its audacious acquisition of VMWare.

Don’t forget to read our previous edition of trends here.

Kenon Holdings

Kenon Holdings (KEN) has seen its viewership advance 1,546% this fortnight, by far the biggest advance from the pack. Kenon, which owns a majority stake in OPC Energy and minority stakes in shipping company ZIM and Chinese automaker Qoros, announced a dividend of $10.25 per share on June 21, after the shareholders and a Singapore Court approved a capital reduction to the tune of $552 million.

The one-off distribution to shareholders represents a fifth of the company’s market capitalization, with Kenon now having a market cap of $2.3 billion. The dividend will be paid on July 5 to shareholders of record as of the close of trading on June 27.

Kenon’s regular dividends have varied from $1.21 per share in 2019 to $3.50 at the beginning of 2022. The company receives regular dividends from its holdings and it also might get additional cash by selling stakes in its companies.

Shares in Kenon have advanced 22.6% over the past 12 months.

KEN

 
Source: Barchart.com

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FedEx

FedEx (FDX) is second in the list with a rise in viewership of 270%. The shipping giant has seen its shares rise over the past month by about 10%, as the company reported good results and raised its dividend. The company’s revenues of $24.4 billion for fiscal year ended May 31 were higher by $1.8 billion relative to last year.

Operating income of $2.23 billion was more than $400 million higher than last year. And CEO Raj Subramaniam delivered strong guidance for 2023, saying he expects earnings per share of $22.50 to $24.50 versus $20.61 and $19.45 for 2022 and 2021, respectively.

FedEx boosted its dividend earlier this month after a settlement agreement with activist investor D.E. Shaw. The company increased its quarterly dividend by 53% to $1.15 per share. The company’s dividend now yields 1.9%, lagging the industrial average yield of 2.36%. With a payout ratio of just around 20%, FedEx has room to make further increases to its shareholder distributions.

FDX

 
Source: Barchart.com

New Residential Investment

New Residential Investment (NRZ) has taken the third position in the list, seeing its viewership advance 39%. New Residential was in the news after it fired its external manager and said it will rebrand itself as Rithm Capital.

New Residential, which provides capital and services to the mortgage and financial services industry, said it will save around $60-$65 million per year following the move, or $0.12 to $0.13 per share. However, New Residential will pay $400 million to the former external manager as a result of the termination of the agreement.

New Residential also recently declared a regular dividend of $0.25 per share, which results in an annual dividend yield of 10.1%, way higher than financials average of 3.18%.

NRZ

 
Source: Barchart.com

Broadcom

Broadcom (AVGO) has taken the last place in the list this fortnight with a surge in viewership of 22%.

The chip-maker has been in the news after striking a deal to acquire cloud software company VMWare for $69 billion. However, the deal is getting increased regulatory scrutiny from the European Union, which fears the deal will lead to lack of competition within the industry.

Additional regulatory investigations can be launched by the U.K., China and the U.S.

Elsewhere, Broadcom may benefit from a recent bill by the U.S. government to encourage investment in the chip industry. The U.S. Congress is debating passing a $200 billion bill to increase technological innovation in the country.

AVGO

 
Source: Barchart.com

The Bottom Line

Kenon Holdings has announced a monster dividend after it agreed to reduce its capital. FedEx posted strong results for fiscal 2022 and guided for better results for the coming year. New Residential Investment is cutting ties with its external manager, something that might result in annual savings of up to $65 million. Finally, Broadcom might see its deal to acquire VMWare challenged by regulators.

Be sure to check out Dividend.com’s News section for the most trending news around income investing.