Welcome to a new overview of upcoming ex-dividend dates. Like every week, I want to show you some stocks that will go ex-dividend in the next days. I’ll also review a few companies that are currently in the focus of investors or that have an attractive fundamental valuation. Additionally, I’ll give you some insights into my retirement portfolio and/or share my thoughts and experiences about individual companies with you. This time we take a closer look at Texas Instruments and Pfizer, both of which have been in the spotlight a bit more recently.
Why yields are a simple way to screen companies
Dividends are a great thing. Even in bad stock market times, they provide a juicy cash flow per month. If you want to benefit from dividend payments as quickly as possible, you must pay attention to the ex-dividend dates. This date is the day on which shares are traded without their subsequent dividend value. Only if you owned the stocks on this day are you entitled to receive the dividend.
Usually, there are always exciting dividend companies that are worth a second look. And the dividend yield is an excellent way to get an initial overview of companies that may be worth further due diligence. To help you get started, at the end of each week, I will publish the ex-dividend dates for the coming week of individual companies here in the TEV blog.
Why I handpick and double-check the upcoming ex-dividend dates
I have recently noticed that many databases do not indicate the respective numbers and dates correctly. Spontaneous dividend cuts, in particular, are only partially taken into account, or in some cases, not at all. As a result, the value of such overviews dwindles enormously.
Therefore, I’ve decided to select individual companies by hand and check the dates and dividend yields on the company websites, which means more work for me but increases the value of this section enormously, so it is worth it 🙂
Ex-dividend dates calendar for the upcoming week (31th Calendar Week)
As always, you’ll find some handpicked exciting ex-dividend dates below.
|Company||Payment Date||Yield||In my retirement portfolio|
|Monday, July 27, 2020|
|Fastenal Co. (FAST)||August 25, 2020||2.2%||NO|
|Sanderson Farms Inc. (SAFM)||August 11, 2020||1.1%||NO|
|Tuesday, July 28, 2020|
|The Clorox Co. (CLX)||August 14, 2020||4.07%||NO|
|Wednesday, July 29, 2020|
|Thursday, July 30, 2020|
|Pfizer (PFE)||September 01, 2020||3.9%||NO|
|Costco Wholesale (COST)||August 14, 2020||0.9%||NO|
|Texas Instruments Incorporated (TXN)||August 17, 2020||2.6%||NO|
|Morgan Stanley (MS)||August 14, 2020||2.7&||NO|
|A.O. Smith (AOS)||August 17, 2020||1.9%||NO|
|Omega Healthcare Investors (OHI)||August 14, 2020||9%||YES|
|Stag Industrial Inc. (STAG)||August 17, 2020||4.8%||NO|
|National Retail Properties (NNN)||August 14, 2020||6%||NO|
|Friday, July 31, 2020|
|AES Corporation (AES)||August 18, 2020||3.76%||NO|
|Casey's General Stores (CASY)||August 17, 2020||0.8%||NO|
|Hasbro (HAS)||August 17, 2020||3.49%||NO|
|Realty Income (O)||August 14, 2020||4.88%||YES|
|Lifetime Brands (LCUT)||August 17, 2020||2.4%||NO|
Texas Instruments is a global semiconductor company that designs, manufactures, tests, and sells analog and embedded processing chips. It belongs to the ten biggest semiconductor companies worldwide based on revenue. The company focuses on the development of analog chips and embedded processors. The company also manufactures digital light processing technology and educational technology products. Notably, the company’s pocket calculators are well known.
Texas Instruments supplies several end markets and industries and thus has a relatively stable diversification. 36 percent of its revenue comes from the industrial sector, 21 percent from the automotive industry, 23 percent from the personal electronics industry, 11 percent from the communications equipment sector, 6 percent from enterprise systems, and 3 percent in other end markets.
Not that excellent results but enough for the market
The company recently presented quarterly figures. The market has received the results well because the results were better than many investors had feared. Nevertheless, based on revenue, the company has shrunk in the last quarter on a year to year basis. Revenue decreased by 12 percent. Analog revenue declined 4 percent, and Embedded Processing declined by 31 percent (however, both had positive sequential growth in the second quarter excluding the automotive market). Cash flow from operations (TTM) was down by 12 percent.
Popular among dividend growth investors
The company is known for its good and investor-friendly management. Above all, the growth in the dividend is impressive. The 10-year average growth of the dividend payouts was 21 percent. Over the last three years, the company has even increased the dividend by 25 percent on average and, most recently, by 22 percent. Right now, the dividend scoreboard looks as follows:
- Dividend yield: 2.7 percent.
- Years of dividend growth: 16 years.
- The 10-Year yield on cost: 14(!) percent.
- Payout ratio based on profit: 63 percent.
- Payout ratio based on cash: 51 percent.
Three things that you have take into account
That said, we will take a look at two things that you should consider when you buy shares in the company.
The balance sheet
The first is the excellent balance sheet. It is impressive how little debt the company has. With a meager debt ratio of 17.92%, Texas Instruments has a lot of room for financial shenanigans, which is an aspect not to be neglected, especially because of the uncertainties caused by the coronavirus. Furthermore, the company has $4.7 billion in cash available to repay its current debt (including all liabilities) of $9.5 billion. So no one at Texas Instruments has to worry about financial stability.
But what I want to draw your attention to is the mountain of treasury stocks the company is sitting on (the yellow pile). The value of Treasury Stocks is $36 billion. That is more than a quarter of the current market capitalization of $121 billion!
One question you have to ask yourself as an investor is whether the company has invested its money wisely. Remember, you can only spend a dollar once. A dollar that the company pays to buy its shares cannot be spent on research and development of new products. With such strong share buybacks, there is also another effect that you should know about.
Share buybacks fake profit growth
When companies buy their shares, this is, first of all, a good thing for long-term investors. It means that if you are a shareholder, you have to share the profit and dividend per share with fewer other shares. So there’s more for you! However, that is only one side. The other side is not necessarily wrong, but you have to take it into account when evaluating the company and the intrinsic value of the shares.
You can see what I mean by this from the graphic below. Such share buybacks can distort earnings per share enormously. As you can see, while Texas Instruments suffered an organic loss of USD 0.55 in 2019, share buybacks improved earnings by around USD 0.2 per share. So be careful when you look at the EPS ratio of companies that buy back a lot of shares.
I also want to talk to you about the relatively high valuation of the company. If we look at the development of adjusted earnings over the last twenty years, you can see that Texas Instruments is now significantly overvalued for the first time in many years.
The same is true if we look at the figures for the last ten years. In fact, the company has been clearly overvalued for much longer. On this view, the historical adjusted price/earnings ratio based on the last ten years suggest an even longer period of overvaluation (I wrote about this perspective in a somewhat older analysis on Seeking Alpha, click here if you want to read it).
In any case, we are now in a situation where Texas Instruments is buying its own shares at very high prices. You should be aware of this.
Pfizer is another company going ex-dividend in the upcoming week and that is like Texas Instruments on my extended watchlist. Most recently, the company was mainly focused on an vaccine against the coronavirus. The US government has ordered more than 100 million doses of a potential vaccine from Pfizer and its Partner Biontech for almost two billion dollars. At the same time, the US government will have the option to acquire up to 500 million additional units. Both companies could thus generate higher single-digit billions in revenues from the US business with the vaccine alone.
This hype will not make Pfizer cheaper in the future. The company is already rather overvalued.
Rock-solid balance sheet
However, I still consider Pfizer to be a company that offers some security in the current uncertain times. Although the share price hasn’t really been great lately, the company has a rock-solid balance sheet. A debt ratio below 40 percent can be considered as very reasonable. Like Texas Instruments, the company is sitting on a big pile of its own shares. The only thing there is to criticize is the low amortization power, since cash and cash equivalents are only 10$ billion while debt (including all liabilities) stands at 100$ billion.
Nice dividend scoreboard
Right now, the dividend scoreboard looks as follows:
- Dividend yield: 3.9 percent.
- Years of dividend growth: 10 years.
- Dividend Growth Rate (CAGR) for the previous 3, 5, 10 years: around 6 percent.
- The 10-Year yield on cost: 10 percent.
- Payout ratio based on profit: 51 percent.
- Payout ratio based on cash: 80 percent.
Time to do your due diligence
Has a company caught your interest? Attractive dividend yields should not be the only reason to buy shares of a company. Instead, you must carry out careful due diligence before every purchase. The Internet offers you excellent opportunities in this respect.
My analyses here on the TEV Blog are an excellent way to start (click here). You can also contact me here or ask the community in the comments if they can help with your due diligence.
Otherwise, I use tools like those from Dividendstocks.cash and Seeking Alpha to do further research. You can also find me and my analyses on these platforms. We also have a small but lovely group on Facebook that you can join. We share there only fundamental analyses of companies from various sources. So there is no spamming or anything like that.
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