What GE, Owens & Minor And Budweiser Have In Common?

  • All three are well-known giants in their industry.
  • All three were offering a relatively high yield.
  • All three were praised by dividend investors.
  • All three failed their shareholders.
  • All three were never considered for my dividend growth portfolio.

We are right in the middle of the earnings season and fall have brought us some horror stories right around Halloween. While over 75% of the S&P 500 companies have beat EPS and over 60% did the same thing for revenue expectations, there are some great companies which cut their dividend and failed their shareholders. Why do I use the term “great”, because when you read their “company’s description”, you would be tempted to pick them for your portfolio.

A tale of three giants which failed their shareholders

General Electric (GE) is a 100-year-old company offering various digital industrial products. Over the past few years, the company has realigned all its business segments toward powering the industrial internet with its software experience. GE is currently going through a major transformation as it became “too big” to be managed. Throughout this transformation, GE performed a second dividend cut in two years. If you are a shareholder, you will now receive $0.01 per share. GE is definitely not part of our top dividend industrials list.

Owens & Minor (OMI) is a healthcare company involved in the transportation/distribution of healthcare products, along with data management and analytics. It is mainly active on U.S. soil with not much international exposure. OMI is divided into two segments, global solutions, and global products, with global solutions representing 86% of revenue. OMI is pretty much in the middle of large medical suppliers – such as Johnson & Johnson (JNJ), Medtronic (MDT), and Becton, Dickinson, and Company (BD) – and customers such as hospitals and group purchasing organizations (GPO). As the company was getting pressured by a competitive environment, management cut its dividend from $0.26 to $0.075.

1 2 3 4
View single page >> |

Disclaimer: I don’t own (and never considered) OMI, BUD, BPL or GE.

Disclaimer: Each month, we do a review of a specific industry at our membership website; Dividend Stocks Rock. In addition ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.