Latest news with #Granular
Forbes
15-05-2025
- Business
- Forbes
This Dividend Grower Taps The Tariff ‘Sweet Spot'
3D illustration of a rubber stamp with the word tariff stamped on paper background. Concept of taxes ... More or duties on imported goods. The UK trade deal was apparently the tasty egg roll before the main course of lower Chinese tariffs. A delightful order for this dividend grower, ready to feast on the 'Peking duck' of trade agreements. China is one of the biggest buyers of US crops, importing tens of billions of dollars of American agriculture every year. Soybeans and corn meander from Midwest farms all the way across the Pacific to feed China's large (and growing) livestock industry. Higher US-China tariffs have weighed on US farmers' profitability—and in turn, on business for key ag suppliers like Corteva Agriscience (CTVA). So the 'trade truce' with China (announced Monday) is quite bullish for Corteva. Tariffs have dropped from an atmospheric 125% down to a manageable 10% on US exports to China, and from 145% to 30% on imports from China. This will lift farmers' bottom lines and Corteva, thanks to its strong domestic footprint, should flourish in this new 'Goldilocks' tariff zone—where tariffs protect US suppliers but don't restrict trade altogether. Corteva, spun out from DuPont de Nemours (DD) in 2019, comes at the ag biz from many angles. Corteva supplies farmers with products for pest and disease control, as well as seeds, livestock feed and nutrient maximizers, which help stabilize nitrogen levels in the soil. All these products boost crop yields—critical because cheap food prices are a focus for the administration. President Trump and Treasury Secretary Scott Bessent want lower oil ('drill baby, drill') and grain prices so that inflation remains subdued. Thus, a domestic manufacturer like Corteva is doubly important to their goal of keeping a lid on corn prices. Upcoming infrastructure investments in the US, especially upgrades to rails and ports to expedite grain exports, will reduce operational costs and help farmers' margins. They will have the cash to invest more in crop optimization—where Corteva excels. The company's digital platform, Granular, helps farmers optimize planting decisions, monitor crop health and maximize harvests. This 'digital agriculture' is sweeping the heartland, projected to grow 12% per year for the foreseeable future, driving Corteva profits. Each new digital customer, of course, pays Corteva a recurring fee, the standard for profitability and predictability. The company knows it sits in a 'sweet spot' of farm productivity and domestic investments. It's so confident of cash flow and future profits that the board recently announced a $1 billion share buyback program for 2025, an initiative that will take a fat 2.5% of its float off the market. Fewer shares outstanding will bolster Corteva's earnings, dividend coverage and, of course, the payout itself. Which will set the stage for more dividend hikes down the road because it's easier to raise with fewer shares to pay out on. Corteva's divvie growth over its short life has already been tasty. Management has delivered four straight dividend hikes, powering the dividend magnet. Its stock price (orange below) has tracked the payout (purple) higher—sometimes running ahead, sometimes behind, but always snapping back. This was the 'dividend magnet' view when we added CTVA to our Hidden Yields portfolio just four weeks ago: CTVA Dividend Magnet Corteva can keep those hikes coming, too. Its conservative 30% free cash flow payout ratio means plenty of runway for future increases. My only problem with Corteva here is that it's already up 15% since our HY recommendation. This annualizes to a terrific 297%! The dividend magnet acted quickly and snapped this share price above my 'buy up to' price of $65. Let's be patient—and see if we can buy this on a dip below $65. Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 8.7%) — Practically Forever. Disclosure: none
Business Insider
07-05-2025
- Business
- Business Insider
Verily CEO tells staff the sale of its insurance business is a 'strategic win' as the deal closes
Elevance Health's acquisition of Verily's insurance business has closed. Verily's CEO told staff in a memo that the sale will strengthen the company's financial position. Verily has been on a mission to shed projects and pivot to AI as it eyes life beyond Google's walls. In an April 30 memo to staff, which was seen by Business Insider, Verily CEO Stephen Gillett said Elevance's acquisition of its stop-loss insurance subsidiary, Granular, had officially closed. "This acquisition represents a strategic win for Elevance Health, Granular, and Verily," Gillett wrote in a note to staff. "On our end, this sale strengthens Verily's financial position and allows us to reinvest the proceeds towards Verily's strategic priorities," he later added. BI first reported in February that Verily had entered an agreement to sell Granular to insurance provider Elevance Health. A Verily spokesperson referred BI to a previous statement confirming the company's agreement to sell Granular. Companies sometimes take out top-loss insurance to pay their employees' medical bills and limit their financial exposure, potentially protecting them from sharp increases in spending. Granular launched in 2020 and used "proprietary technology" for its services, the company said. With its insurance business sold, Verily has shed another project as it aims to further streamline itself and refocus its strategy around AI. Verily sits among the "other bets" owned by Alphabet but live outside Google. It started out in Google's moonshot lab in 2015 and focused on an array of projects, including wearables and surgical robots. It has been criticized for entertaining too many bets and lacking a clear focus. The unit completely pivoted to COVID-19 screening and testing during the pandemic. Last year, Verily announced a new AI-powered chronic care product named Lightpath, designed to help patients living with conditions such as diabetes and obesity. Verily is also eyeing a future beyond Alphabet's walls. In January, the life sciences group separated some of its internal systems from Google's, such as certain employee benefit systems. Last year, Verily issued employees new laptops, office badges, and email addresses that are no longer aliases of the Google email domain, multiple people familiar with the matter told BI.
Business Insider
07-05-2025
- Business
- Business Insider
Verily CEO tells staff the sale of its insurance business is a 'strategic win' as the deal closes
Alphabet life sciences unit Verily has officially sold its insurance business to Elevance Health, its CEO told employees last week, as the company continues to shed projects and focus on AI. In an April 30 memo to staff, which was seen by Business Insider, Verily CEO Stephen Gillett said Elevance's acquisition of its stop-loss insurance subsidiary, Granular, had officially closed. "This acquisition represents a strategic win for Elevance Health, Granular, and Verily," Gillett wrote in a note to staff. "On our end, this sale strengthens Verily's financial position and allows us to reinvest the proceeds towards Verily's strategic priorities," he later added. BI first reported in February that Verily had entered an agreement to sell Granular to insurance provider Elevance Health. A Verily spokesperson referred BI to a previous statement confirming the company's agreement to sell Granular. Companies sometimes take out top-loss insurance to pay their employees' medical bills and limit their financial exposure, potentially protecting them from sharp increases in spending. Granular launched in 2020 and used "proprietary technology" for its services, the company said. With its insurance business sold, Verily has shed another project as it aims to further streamline itself and refocus its strategy around AI. Verily sits among the "other bets" owned by Alphabet but live outside Google. It started out in Google's moonshot lab in 2015 and focused on an array of projects, including wearables and surgical robots. It has been criticized for entertaining too many bets and lacking a clear focus. The unit completely pivoted to COVID-19 screening and testing during the pandemic. Last year, Verily announced a new AI-powered chronic care product named Lightpath, designed to help patients living with conditions such as diabetes and obesity. Verily is also eyeing a future beyond Alphabet's walls. In January, the life sciences group separated some of its internal systems from Google's, such as certain employee benefit systems. Last year, Verily issued employees new laptops, office badges, and email addresses that are no longer aliases of the Google email domain, multiple people familiar with the matter told BI. Verily is also looking to raise another round of capital in the next few months, BI previously reported.
