Stocks of big pharmaceutical companies have been core holdings in many portfolios for as long as I can remember, probably even beyond that. The reasons are crystal-clear: an ever aging population, more chronic diseases also among younger generations, stable to slightly rising demand throughout the business cycle, relative price stability of those stocks and reliable dividends. What’s not to like?
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Even though I know that I certainly won’t make many new friends with this article, especially not from the ranks of dividend investors, it is a duty for me to address this topic. I also think, it’s no coincidence that my most popular article to date has been about looming dividend cuts. Simply put, it’s too important to be ignored.
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An important, but surprisingly little commented upon, news story prompted me to think about this very critical topic. Since most commonly known mining stocks often have no small exposure to emerging markets, I decided to dig a little deeper for my readers. I also take a look at some individual stocks and present two ideas with “pure-play Tier 1” exposure to gold and silver.
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Altria is a stock from the illustrious circle of the “dividend kings”. It is even so special that it has actually raised its dividend more than once a year over the past half century – 57 increases over 53 consecutive years. However, the last few years have been disappointing in operational terms. Recent results, in particular, have shown the direction this company is likely to take. There are still a few puffs left, but don’t be surprised by the impending dividend cut at this darling of many dividend investors.
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A never ending discussion in the field of dividend investing is whether you go for high yielding stocks or dividend growth stocks. Recently, I had a few discussions on Twitter about this topic. Because it is a question many investors have – amateurs and experienced investors alike – I decided to write a Weekly to compare both strategies.
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In recent months, I’ve been reading more and more about a hot new topic: helium production. Helium is an essential gas in medical as well as industrial applications. The key message being spread is that this so far opaque market is about to become more transparent, as many small exploration companies seem to be embarking on promising projects. Is this really the next sector you should bet on, or is it too much hot air that will deflate, bringing headaches like too much inhaled helium?
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In the past, this question was a no-go. On several occasions, speculation about at least a sale of non-core business units was put on the table, but quickly buried again. Over time Deutsche Bahn has accumulated so much debt that its barely profitable core operations cannot handle these obligations. An eternal zombie existence on government life support is not a viable solution. And then there is the ambitious investment offensive to modernize and expand the existing rail infrastructure. Is it finally time to break up Deutsche Bahn?
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A few weeks ago, I wrote about the overall investment environment of uranium. I concluded from a top-level perspective, that due to a stressed supply-demand situation, higher prices likely are more a question of “when”, not “if”. After publication, one of my readers and Premium Members wrote to me about a certain company that could benefit from the plan to not only build more, but also smaller, next generation nuclear reactors. I have put this idea under the microscope.
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Being dead and being alive are mutually exclusive conditions. But with stocks, there are companies that to a large extent fit into this scheme. Now facing a heavily toxic cocktail of likely higher interest rates and a slowing economy, many of these businesses will be tested for their survivability. Even if they do survive as a whole business, it is nonetheless dangerous to invest into equities of heavily indebted zombies – no matter how high the temptation might be.
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The turn of every year is a special time. Not only because it feels like the old and especially bad is left behind and something new starts. There is also a well-known stock-picking strategy that promises you to beat the Dow Jones Index by only doing a few transactions at the start of each year. Did this low-maintenance strategy deliver in the past? And what are the picks for 2023 according to this strategy?
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