spin off
Many tech stocks reinvest their cash flow back into their businesses for growth, rather than paying out dividends. But with its massive cash flow of over $20 billion a year, IBM has lots of room for both: it spends more than $6 billion (8% of sales) on research each year, plus it offers investors a high—and sustainable—5.8% yield....
Businesses have slowed their purchases of new computer equipment due to the COVID-19 pandemic. That has weighed on the share prices of these two tech giants. However, recent acquisitions are set to expand their profits—and dividends—when demand recovers.
INTERNATIONAL BUSINESS MACHINES CORP....
INTERNATIONAL BUSINESS MACHINES CORP....
EXELON CORP. $42 (New York symbol EXC; Utilities sector; Shares outstanding: 974.5 million; Market cap: $40.9 billion; Dividend yield: 3.6%; Takeover Target Rating: Medium; www.exeloncorp.com) is a hold. The company operates several regulated power and natural gas utilities, including Commonwealth Edison in Illinois and PECO Energy in Pennsylvania.
Partly due to pressure from activist firm Corvex Management, Exelon is reportedly developing a plan to spin off its non-regulated operations....
Partly due to pressure from activist firm Corvex Management, Exelon is reportedly developing a plan to spin off its non-regulated operations....
IBM has a long history of transforming its business in response to new computing technologies. For instance, as demand for its mainframe computers slowed in the 1990s, the company shifted its focus to services such as designing and maintaining computer systems for its customers....
These two firms are planning spinoffs to pay down their high debt. However, their remaining businesses will likely still carry heavy debt loads.
DELL TECHNOLOGIES INC. $67 is a hold. The company (Nasdaq symbol DELL; Manufacturing sector; Shares outstanding: 746.7 million; Market cap: $50.0 billion; No dividend paid; Takeover Target Rating: Low; www.delltechnologies.com) is a leading maker of computers, monitors and related equipment for consumers and businesses.
The company is now considering spinning off its 80.1% stake in VMWARE INC....
DELL TECHNOLOGIES INC. $67 is a hold. The company (Nasdaq symbol DELL; Manufacturing sector; Shares outstanding: 746.7 million; Market cap: $50.0 billion; No dividend paid; Takeover Target Rating: Low; www.delltechnologies.com) is a leading maker of computers, monitors and related equipment for consumers and businesses.
The company is now considering spinning off its 80.1% stake in VMWARE INC....
BHP GROUP LTD. (ADR) $55 is a buy. This company (New York symbol BHP; Conservative Growth Portfolio, Resources sector; ADRs outstanding: 2.5 billion; Market cap: $137.5 billion; Price-to-sales ratio: 3.2; Dividend yield: 4.0%; TSINetwork Rating: Average; www.bhp.com) is a leading producer of iron ore (which supplies 50% of its earnings) as well as oil and gas, copper, nickel and coal.
BHP’s revenue in its 2020 fiscal year, ended June 30, 2020, fell 3.1%, to $42.83 billion from $44.29 billion in 2019....
BHP’s revenue in its 2020 fiscal year, ended June 30, 2020, fell 3.1%, to $42.83 billion from $44.29 billion in 2019....
We go back a long way with medical-device supplier Baxter International. The stock is up a whopping 674.9% since we recommended it at $16.75 a share (adjusted for two 2-for-1 share splits) in our December 1999 inaugural issue of Wall Street Stock Forecaster....
A spinoff investment will likely be undervalued and it’s almost always a better option than new issues or IPOs
As we often remind readers that spinoffs are a great way for companies to unlock value for investors. A recent spinoff, Trane Technologies, has recovered most of its COVID-19-induced losses and is ready to move even higher. Shares of retailer L Brands have also jumped on plans to spin off its Victoria’s Secret’s chain....
COVID-19 continues to highlight the importance of ingredient producer Archer Daniels Midland to the global food supply chain. At the same, however, lower demand for gasoline has forced it to put off any potential spinoff of its ethanol business. Even so, we feel the company is in a strong position to expand its profits as more countries re-open their economies.
ARCHER DANIELS MIDLAND CO....
ARCHER DANIELS MIDLAND CO....