Latest news with #S&P500DividendAristocratsIndex
Business Insider
12 hours ago
- Business
- Business Insider
Caterpillar's (CAT) Q2 Bombshell Fails to Deter Bullish Investors
Caterpillar (CAT) stock has been on quite a run in the past three months due to strong underlying demand. However, trouble is brewing after the construction equipment manufacturer reported its second-quarter 2025 earnings. The headline-grabbing element of the report was management's warning that new tariffs could result in a $1.3 billion to $1.5 billion headwind to profitability for the full year 2025. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Moreover, the company fell short of EPS, revenue, and operating profit expectations. Caterpillar has been dealing with profitability issues for quite some time, so the ongoing tariff regime could not have come at a worse time. Despite these headwinds, Caterpillar's booming Energy & Transportation (E&T) segment, which has an interesting connection to artificial intelligence (AI), and its place on the S&P 500 Dividend Aristocrats Index make me Bullish on the stock in the medium-long term. CAT's Cyclical Nature Spells Opportunity To understand Caterpillar's current state, context is key. The company is a quintessential cyclical investment, meaning that its business and stock are highly influenced by macroeconomic factors (e.g., construction and mining activity decline significantly during a recession). With that said, Caterpillar has been actively working to diversify its business, seeking less-cyclical revenue streams. While construction remains its core business, Caterpillar's E&T segment is quickly gaining steam. AI's Surprising Role in Powering Caterpillar It may be a surprise, but even Caterpillar has a connection to AI. Its E&T segment growth is directly linked to the booming demand for reciprocating engines and power generation solutions for data centers. Hyperscalers like Meta (META) and Alphabet (GOOGL) are investing tens of billions of dollars into AI infrastructure. Caterpillar's reciprocating engines help power these data centers. In Q2, its E&T segment generated $7.8 billion in sales (up 7% year-over-year) and $1.6 billion in profit (up 4%). Critically, this segment is offsetting some weakness in Caterpillar's Construction Industries and Resource Industries (serving mining and quarry sectors) segments. Segmental Pressures and Industry-Wide Headwinds CAT's Construction and Resource Industries segments, in particular, saw substantial ~30% decreases in profit. Unfavorable manufacturing costs are being cited as key factors, and these issues are not unique to Caterpillar in the industrial machinery sector. John Deere's Construction & Forestry segment fared even worse, experiencing a 43% drop in operating profit in Q2 2025. Elsewhere, CAt's financial products segment maintains steady growth, with increased retail credit applications. Although tariff and economic uncertainties pose risks, CAT's management has assured the market that its operational focus and backlog strength will be enough regardless of market conditions. Navigating Tariffs with a Record Backlog Rubbing salt in the wound, Caterpillar revealed that tariffs will result in between $1.3 billion and $1.5 billion in costs this year, further impacting its bottom line. The company is implementing several strategies to combat this risk. Meanwhile, Caterpillar's backlog reached an all-time high of $37.5 billion, representing 10% year-over-year growth in orders. Amid macroeconomic uncertainty, this gives Caterpillar some visibility into future revenue. Moreover, Caterpillar's balance sheet provides a solid buffer to short-term disruptions, featuring $5.44 billion in cash and zero debt. Assessing Valuation and Shareholder Returns As noted earlier, Caterpillar's (CAT) valuation has edged higher, with its P/E ratio now at 22.1—about a 6% premium to the Industrials sector median of 20.85. This comes despite trailing 12-month revenue growth of -4.87%, well below the sector median of 3.29%. The premium suggests the market is betting on a near-term rebound in growth. Even if CAT underperforms amid the anticipated profit compression in the year's second half, shareholders can still count on a robust quarterly dividend of $1.51 per share. Is CAT Stock a Good Buy Now? On Wall Street, CAT sports a consensus Moderate Buy rating based on eight Buy, five Hold, and one Sell ratings in the past three months. CAT's average stock price target of $447.36 implies an upside potential of 7.25% over the next twelve months. Last month, analyst Kristen Owen of Oppenheimer assigned CAT a Buy rating and raised her price target from $395 to $483. She expressed optimism, noting that 'Temporary reprieves on tariffs likely support Q2 margin upside for the majority of stocks under coverage, along with demand pull-forward for select names. Prospectively, while trade negotiations remain fluid, the firm sees signs of the industrial cycle bottoming.' CAT Bulls Stay in Charge Despite Short-Term Pain Caterpillar's Q2 results were a mixed bag, with strong underlying demand offset by significant, externally driven margin pressures. The outlook for the second half of 2025 remains challenging as profitability is expected to tighten further. Like many peers, Caterpillar is taking a wait-and-see approach on tariffs, though it retains some flexibility in sourcing and backlog repricing if tariffs persist. When looking at CAT's price history since 2022, the stock appears to be on a fairly steady uptrend. However, if looking at the past five days, it would seem the sky is falling. Given the fundamentals of the stock, buying the dip is a compelling idea. If trade conditions ease, the company's record $37.5 billion backlog—bolstered by growth in the E&T segment—positions it well for continued activity and potential tailwinds in 2026. Overall, Caterpillar appears more resilient than many competitors, and I share Oppenheimer's bullish view despite near-term headwinds.
Yahoo
25-07-2025
- Business
- Yahoo
With a 5.6% Yield, This Dividend Aristocrat Pays Monthly. Is It a Buy Here?
Dividend stocks are a go-to option for investors seeking a steady income stream. While many companies pay dividends, Dividend Aristocrats are dependable names that allow investors to generate worry-free income. These companies are known for their financial strength, robust cash flow, and focus on rewarding shareholders. Typically, they are large, well-established businesses that have proven their resilience through various economic cycles. Their ability to maintain and grow dividend payments, even in tough times, makes them especially appealing to investors seeking stability and steady income. More News from Barchart 2 Recession-Proof Dividend Stocks to Buy for the Second Half of 2025 Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Among the Dividend Aristocrats, Realty Income (O) stands out for its high yield of 5.6%. Moreover, it is known as 'The Monthly Dividend Company,' paying and growing its payouts month after month. Realty Income: The Monthly Dividend Powerhouse Realty Income owns a diversified portfolio of more than 15,600 commercial properties. The real estate investment trust (REIT) has strategically spread its investments across various tenant types, property categories, and geographic regions. This broad diversification enhances the firm's resilience and supports consistent cash flow generation, enabling reliable dividend payments. Approximately 65% of the company's holdings comprise U.S. retail properties. These properties are occupied by high-quality tenants with a proven track record of financial stability throughout economic cycles. The vast majority, approximately 98%, of Realty Income's portfolio consists of single-tenant properties, most of which operate under triple-net lease agreements. These leases are particularly advantageous for the REIT because they provide predictable, long-term rental income while keeping operating costs low. Under this structure, tenants handle most property-related expenses, which helps protect Realty Income's profit margins and support its ability to continue paying attractive dividends. This focus on long-term leases and cost-efficient property management has helped Realty Income build an enviable track record of dividend payments and growth. Since going public, the company has declared 660 consecutive monthly dividends and has been included in the S&P 500 Dividend Aristocrats Index. Today, Realty Income offers a monthly dividend of $0.2690 per share, amounting to an annualized payout of $3.23. With a dividend yield of approximately 5.6%, the REIT is an attractive option for investors seeking stability and consistent monthly income. A Steady Dividend Machine Built for the Long Haul Realty Income has a solid history of dividend growth, and the REIT is likely to maintain this streak through its high-quality assets and steady growth. Its focus on prime real estate locations and high-quality tenants enhances the firm's ability to re-lease or dispose of assets as needed. Its conservative underwriting standards and strict investment criteria provide further protection against credit risk. An impressive 99.6% of the portfolio has seen no credit losses, reflecting the strength and stability of its tenants. Notably, the REIT remains committed to a tenant mix rooted in recession-resistant sectors, such as grocery stores and wholesale clubs. Realty Income benefits from industries that perform well even during economic downturns. More than 90% of its retail rent comes from tenants that provide nondiscretionary goods or essential services, critical buffers in uncertain times. Additionally, over a third of its tenants are investment-grade. Realty Income ended Q1 with a high occupancy rate of 98.5% and a rent recapture rate of 103.9% across 194 leases, with the vast majority of those leases being renewals from existing clients. Realty Income is also expanding its global reach, particularly in Europe, where it sees compelling opportunities. This geographic diversification helps mitigate country-specific risks while opening up new avenues for income generation. Looking ahead to the rest of 2025, Realty Income is well-positioned to deliver steady growth. Its large scale, solid financials, and diversified footprint across asset classes and geographies will enable it to pay and increase its monthly dividends in the future. The Bottom Line Realty Income has a 'Moderate Buy' consensus rating, implying it is not the highest-rated stock. However, this REIT is a go-to for investors who prioritize steady passive income. Its consistent monthly dividend payments, ability to increase its future payouts, and a high yield make it a compelling investment to start a growing income stream for years. On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
13-06-2025
- Business
- Yahoo
Abbott Declares 406th Consecutive Quarterly Dividend
ABBOTT PARK, Ill., June 13, 2025 /PRNewswire/ -- The board of directors of Abbott (NYSE: ABT) today declared a quarterly common dividend of 59 cents per share. This marks the 406th consecutive quarterly dividend to be paid by Abbott since 1924. The cash dividend is payable Aug. 15, 2025, to shareholders of record at the close of business on July 15, 2025. Abbott has increased its dividend payout for 53 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have increased dividends annually for at least 25 consecutive years. About Abbott:Abbott is a global healthcare leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 114,000 colleagues serve people in more than 160 countries. Connect with us at and on LinkedIn, Facebook, Instagram, X and YouTube. View original content: SOURCE Abbott Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
Yahoo
22-05-2025
- Business
- Yahoo
Abbott vs. Medtronic: Which Dividend-Paying MedTech Stock is Better?
Abbott ABT and Medtronic MDT, two leading giants in the global medical device space, are demonstrating strong momentum in 2025 despite various macroeconomic challenges, including significant tariff pressures. Medtronic just wrapped up a strong fiscal 2025 with 10.9% earnings growth and a 5.4% revenue improvement year over year, fueled by momentum in cardiovascular, neuromodulation and diabetes segments. The company reached new milestones with its Cardiac Ablation Solutions (CAS) and ENT businesses crossing $1 billion in annual revenues and announced a significant strategic move to spin off its Diabetes unit. Meanwhile, Abbott achieved high single-digit sales growth and double-digit earnings growth in first-quarter 2025 despite lingering post-pandemic disruptions. The company is gaining from a full pipeline of innovation, expanded biosimilar agreements and promising launches in diagnostics and neuromodulation. With each company focusing on its core strengths, the stage is set for a compelling comparison between the two. Let's delve deeper to find out which stock has the edge. Year to date, shares of Abbott have jumped 18.8%, while those of Medtronic have improved 6.5%. Both the stocks outperformed the S&P 500's mere 0.8% gain over this period. Image Source: Zacks Investment Research Robust Growth in Diversified Business Segments: Abbott's FreeStyle Libre franchise surged nearly 20% organically in the first quarter of 2025, reflecting strong global demand and the product's growing role in managing Type 2 diabetes through advanced digital health integration. Meanwhile, the Diagnostics segment showed stabilization, with organic growth in core lab testing helping offset post-COVID declines. The Established Pharmaceuticals (EPD) segment posted mid-single-digit organic sales growth, driven primarily by strong performance in emerging markets. Beyond individual segments, Abbott delivered organic sales growth across all four of its major business units, Medical Devices, Diagnostics, Nutrition and EPD, highlighting its diversified revenue base. Strong Cash Flow and Shareholder Value Creation: As of the end of the first quarter, Abbott maintained a healthy balance sheet with strong liquidity, including over $6 billion in cash and short-term investments, giving it flexibility for both organic growth and potential M&A activity. Abbott generated $2.3 billion in operating cash flow in the first quarter of 2025. In terms of the company's commitment to returning capital to shareholders, Abbott increased its quarterly dividend by 7.8% earlier this year, marking the 52nd consecutive year of dividend growth. Notably, Abbott is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for 25 consecutive years. Abbott's payout ratio presently sits at 49% of earnings. Check for more details. Image Source: Zacks Investment Research Growing Momentum and Pipeline Expansion: Medtronic has been gaining significant traction across key therapeutic areas. Its CAS business grew nearly 30% in the fiscal fourth quarter, driven by strong demand for Affera's Pulse Field Ablation technology, including the Sphere-9 catheter and the upcoming Sphere 360 system, which are set to enter pivotal U.S. trials. The Structural Heart segment posted 10% growth, fueled by rising adoption of the Evolut TAVR platform, supported by favorable real-world data and positive outcomes from the SMART trial and five-year low-risk studies, helping Medtronic gain share at leading U.S. centers. Neuromodulation also advanced 10%, led by next-generation systems like Inceptiv SCS and BrainSense DBS. Meanwhile, the company is expanding its digital surgical footprint with the Hugo robotic platform in 30 countries and scaling its AI-powered Touch Surgery system. These innovations, along with ongoing investments in renal denervation and hypertension trials, reinforce a strong long-term growth pipeline. Shareholder Returns and Dividend Growth: Medtronic returned $6.3 billion in fiscal 2025 through share repurchases and dividend payments. Notably, the company declared a dividend increase for the 48th consecutive year. Medtronic's payout ratio presently sits at 52% of earnings. Check for more details. In addition, the impending Diabetes business separation is structured to be accretive to EPS and tax-free for U.S. shareholders, with a planned share retirement during the split-off. This strategy is expected to reduce share count and unlock shareholder value in both Medtronic and the newly independent Diabetes entity. Image Source: Zacks Investment Research MDT is trading at a forward 12-month price-to-earnings, which is a commonly used multiple for valuing healthcare stocks, of 14.41X, below its 5-year median of 16.19X and pretty close to the 5-year low of 13.13X. Meanwhile, ABT is presently trading at a forward 12-month price-to-earnings of 24.87X, which is above its 5-year median of 24.03X. This suggests that Medtronic remains attractively valued when compared with Abbott, as well as its own historical average. Image Source: Zacks Investment Research While Medtronic and Abbott, carrying a Zacks Rank #3 (Hold) each, present strong fundamentals and a solid history of dividend growth, MDT currently offers a more compelling value proposition for investors. Trading below its 5-year median and near historical lows, Medtronic is more attractively valued than Abbott. Medtronic also has a higher payout ratio than Abbott currently. The upcoming Diabetes business spin-off, structured to be EPS-accretive and tax-efficient, further underscores the company's focus on unlocking shareholder value. For value-driven investors seeking reliable income and long-term appreciation, Medtronic emerges as the more favorable choice over Abbott. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abbott Laboratories (ABT) : Free Stock Analysis Report Medtronic PLC (MDT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Globe and Mail
04-03-2025
- Business
- Globe and Mail
This Stock Yields a Juicy 6% and Pays Dividends Monthly: Is It a Buy Now?
The stock market is highly unpredictable. In this volatile market, dividend stocks provide a sense of stability by offering regular income. Without a doubt, high-yield dividend stocks are appealing. However, another important factor to consider when selecting dividend stocks is the consistency of dividend payments. This serves as an indicator of a company's business stability and commitment to return cash flow to shareholders. Realty Income (O), also known as 'The Monthly Dividend Company,' has been paying and increasing dividends for the past 30 years in a row. Its impressive track record has earned it a coveted spot in the S&P 500 Dividend Aristocrats Index. Let's see if this is a good dividend stock to buy now. Realty Income: Fundamentals Are Strong Realty Income (O) is a real estate investment trust (REIT) that acquires and leases retail and commercial properties to tenants from a variety of industries. In exchange, the company receives rental income, which serves as a consistent source of income. O stock has risen 6.3% in the year to date. Realty Income's growth strategy focuses on acquiring high-quality properties with reliable tenants in a variety of industries. The inclusion of clients from various industries, such as convenience stores, drugstores, gaming, health and fitness, and restaurants, among others, reduces the risks associated with generating revenue from a single tenant. Its tenants include FedEx (FDX), Tesco (TSCDY), Home Depot (HD), Walgreens (WBA), CVS Pharmacy (CVS), and Dollar Tree (DLTR), among others. Notably, its diverse portfolio includes 15,621 properties in six countries (besides the U.S. and U.K.) with clients from 89 industries. This international diversification not only increases the company's revenue base but also reduces the risks associated with market concentration. The company's emphasis on long-term, net lease agreements lasting 9.3 years has positioned it favorably in the REIT industry. Furthermore, its strategy of securing leases that require tenants to pay for property-related expenses such as maintenance, taxes, and insurance ensures a consistent and stable income stream. In 2024, Realty Income's total revenue of $5.28 billion increased 29.5% from 2023. In the case of a REIT, adjusted funds from operations (AFFO) measure the amount of income payable as dividends, similar to net income in non-REITs. AFFO increased by 4.7% to $4.19 per share during the year, marking the company's 14th consecutive year of annual AFFO per share growth. A Reliable Dividend Payer One of the fascinating things about Realty Income is its monthly dividend payments. During its 56-year history, the company has paid out 656 monthly dividend payments. In February, the company announced a 1.5% increase in its monthly cash dividend to $0.268 per share. Additionally, the company announced a $2 billion share repurchase program for 2025, demonstrating its confidence in generating cash flow and financial stability. Furthermore, as a REIT, the company is legally required to distribute 90% of its taxable income as dividends. Realty Income pays a 5.7% yield, which is higher than the real estate sector average of 4.5%. Its AFFO dividend payout ratio of 73.9% is slightly higher, but it is sustainable if the company continues to grow its AFFO. Analysts that cover O stock expect its funds from operations to increase by 8.8% in 2025, followed by another 2.9% increase in 2026. Realty Income Corporation's reputation as 'The Monthly Dividend Company' is well-deserved, thanks to a diverse portfolio and a focus on shareholder returns, making it an appealing dividend stock for investors seeking passive income. What Does Wall Street Say About Realty Income Stock? Overall, on Wall Street, Realty Income stock is a 'Moderate Buy.' Out of the 23 analysts that cover the stock, five rate it a 'Strong Buy,' one rates it a 'Moderate Buy,' and 17 rate it a 'Hold.' The mean target price for the stock is $60.74, which is 7.4% above current levels. The Street-high estimate of $65.5 implies upside of 15.7% over the next 12 months.
