Day: March 31, 2020

Deep Dive: Only one stock in the Dow rose during the first quarter — and it was up by only one penny

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A decline in stocks Tuesday cemented the worst quarter for the Dow Jones Industrial Average since 1987. A table below shows how all 30 components performed from January through March.

On Tuesday, the Dow Jones Industrial Average DJIA, -1.84%  fell 410 points (or 1.8%) to close at 21,917.16. The venerable index was down 23.2% for the first quarter, the biggest decline since the fourth quarter of 1987, when Black Monday (Oct. 19) occurred.

The only Dow stock that rose during the first quarter was Microsoft MSFT, -1.57%, which closed at $157.71 on March 31, up a penny from $157.70 on Dec. 31. (All performance figures in this article exclude dividends.)

The S&P 500 Index SPX, -1.60%  dropped 1.6% on Tuesday for a first-quarter decline of 20%.

The Nasdaq Composite Index COMP, -0.95%  decreased 1% on Tuesday for a first-quarter decline of 14.2%.


All 11 sectors of the S&P 500 were down significantly during the first quarter:

S&P 500 sector Price change – first quarter, 2020 Price change – 2019
Energy -51.1% 7.6%
Financials -32.3% 29.2%
Industrials -27.4% 26.8%
Materials -26.6% 21.9%
Real Estate -19.8% 24.9%
Consumer Discretionary -19.6% 26.2%
Communication Services -17.2% 30.9%
Utilities -14.2% 22.2%
Consumer Staples -13.4% 24.0%
Health Care -13.1% 18.7%
Information Technology -12.2% 48.0%
Source: FactSet
Dow 30
Company Ticker Price change – first quarter, 2020 Price change – 2019
Boeing Co. BA, -2.06%   -54.2% 1.0%
Dow Inc. DOW, +2.06%   -46.6% N/A
Exxon Mobil Corp. XOM, +1.25%   -45.6% 2.3%
Chevron Corp. CVX, +0.71%   -39.9% 10.8%
United Technologies Corp. UTX, -4.22%   -37.0% 40.6%
J.P. Morgan Chase & Co. JPM, -3.71%   -35.4% 42.8%
Walt Disney Co. DIS, -3.21%   -33.2% 31.9%
Goldman Sachs Group Inc. GS, -3.15%   -32.8% 37.6%
American Express Co. AXP, -5.16%   -31.2% 30.6%
Travelers Cos. Inc. TRV, -3.16%   -27.5% 14.4%
3M Co. MMM, -0.89%   -22.6% -7.4%
Walgreens Boots Alliance Inc. WBA, +1.31%   -22.4% -13.7%
Caterpillar Inc. CAT, +3.88%   -21.4% 16.2%
Coca-Cola Co. KO, -1.67%   -20.1% 16.9%
Nike Inc. Class B NKE, -3.09%   -18.3% 36.6%
Cisco Systems Inc. CSCO, -2.50%   -18.0% 10.7%
International Business Machines Corp. IBM, -1.77%   -17.2% 17.9%
Pfizer Inc. PFE, -0.09%   -16.7% -10.2%
McDonald’s Corp. MCD, -1.65%   -16.3% 11.3%
Merck & Co. Inc. MRK, -0.01%   -15.4% 19.0%
UnitedHealth Group Inc. UNH, -0.76%   -15.2% 18.0%
Home Depot Inc. HD, -4.79%   -14.5% 27.1%
Visa Inc. Class A V, -2.69%   -14.3% 42.4%
Apple Inc. AAPL, -0.20%   -13.4% 86.2%
Verizon Communications Inc. VZ, -1.90%   -12.5% 9.2%
Procter & Gamble Co. PG, -4.35%   -11.9% 35.9%
Johnson & Johnson JNJ, -1.41%   -10.1% 13.0%
Intel Corp. INTC, -2.47%   -9.6% 27.5%
Walmart Inc. WMT, -1.36%   -4.4% 27.6%
Microsoft Corp. US:MSFT   0.0% 55.3%
Source: FactSet

You can click on the tickers for more about each company, including full news coverage.

You may have to scroll the table to see all the data.

Don’t miss: These 60 large U.S. companies are ‘susceptible to a dividend cut,’ according to Jefferies

Personal Finance Daily: What we can learn from South Korea and Singapore’s efforts to stop coronavirus and on Equal Pay Day, a reminder that some women get paid less than men

This post was originally published on this site

Hi there, MarketWatchers. Stay safe and don’t miss these top stories:

Personal Finance
What we can learn from South Korea and Singapore’s efforts to stop coronavirus (besides wearing face masks)

South Korea has implemented aggressive contact-tracing apps to track a person’s detailed whereabouts.

Anthony Fauci: White House Coronavirus Task Force is giving ‘serious consideration’ to suggesting Americans wear face masks

‘We will be discussing it today, this afternoon, at the task force meeting,’ Fauci said Tuesday.

On Equal Pay Day, a reminder that some women get paid less than men — even on the front lines of coronavirus

Female physicians and surgeons make nearly 12% less than their male counterparts, according to one recent analysis.

Help for frazzled parents: 20 virtual field trips to keep your kids occupied (and learning)

As the cornavirus closes schools, these zoos, museums and world wonders online could supplement your children’s online classroom work.

How do I self-quarantine? Can I walk my dog? Be warned, there can be legal consequences for violators

There’s a lot of confusion about preventing the spread of the novel coronavirus. Here’s what health experts recommend.

‘More than a principal’: Dez-Ann Romain is first known New York City Public Schools staffer to die from the coronavirus

The educator had an uncanny ability to relate to her students and nurture their ‘promise and potential’.

Marlowe Stoudamire, an unrelenting champion for Detroit, dies from the coronavirus at 43

The community leader and entrepreneur, who dedicated his life to bringing change to the city, died from the coronavirus on March 24.

Take your mind off of the coronavirus for a few minutes with these videos, memes and threads

Such viral content has become an important part of self care, mental health experts say.

Free workouts from Peloton, Nike and others to help you stay active during your quarantine

14 fitness apps and streaming services that you can try at home for free

The ultrarich are paying limo drivers to deliver mail from Manhattan to their Hamptons houses

Many fled their city apartments to ride out the COVID-19 pandemic on Long Island.

Elsewhere on MarketWatch
Trillions in coronavirus spending could explode deficits to World War II levels

The trillions of dollars Washington is spending to combat COVID-19 is likely to push annual deficits relative to the size of the U.S. economy close to levels last seen during the 2007-2009 Great Recession — or even World War Two.

Pelosi says U.S. must have more voting by mail as coronavirus upends elections

House Speaker Nancy Pelosi on Tuesday said increased voting by mail would soon be a reality of life amid the coronavirus pandemic, and suggested she will press for more funding for it in the next stimulus package Congress works on.

Asian-American community leaders describe anxiety and prejudice amid coronavirus outbreak in New York City

The viral epidemic has led to incidents of harassment and violence.

Revolution Investing: Only falling stock prices would make me bullish, Cody Willard says

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Here are questions from Revolution Investing subscribers and other followers about the economy and markets, strategy/trades and specific stocks. Be sure to read the last few paragraphs where I finish up with some positive, exciting analysis.


Subscriber: Is this crash fundamentally different from that of 2008? While many sectors of the economy are totally wiped out right now, others are fine. My business, for instance, does outdoor construction and we have not been shut down or even slowed. Seems like last time, almost all industries across the board were down. Things may change for businesses like mine if a recession sets in, but for now, we are good. Do you think, since the shutdown is not uniform, there will be a difference?

Cody: This economic decline hasn’t been caused by a demand slowdown. The problem is that the slowdown and unemployment is going to be across the board. Yes, there are always sectors of the economy that boom in bad times. But in the general, this recession’s going to be painful across the board. If you were in New York, your outdoor construction company might not be doing anything.

To continue reading, please subscribe. Already a Subscriber? Log in

Binance Enters South Korea, Gets Approval for OkCoin

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The growth in the cryptocurrency industry has been made possible by the presence of crypto exchanges, and in that regard, Binance has been one of the most influential. In a new development that should come as a major boost to the crypto sphere, the crypto exchange announced that it is all set to launch its operations in South Korea.

Major Details

Binance acquired the Fintech company BxB Inc and is now going to turn it into a global exchange for South Korean customers by way of a cloud platform. This is a significant development for the company as well as for the crypto trading community in South Korea.

The exchange will be crypto to crypto in nature and will provide South Korean customers with the functionalities of Binance that have made it one of the most popular crypto exchanges in the world. The announcement was made by the Chief Executive Officer of the exchange, Changpeng Zhao, through a tweet. He said, “Hello South Korea.” Fiat deposits are going to be restricted at this point, but customers can use a stablecoin developed on Binance Chain to start their trading activities.

Removes 15 Trading Pairs

On March 27, the exchange made another important announcement that could have far-reaching effects on the crypto sphere. The company announced that it is going to remove 15 trading pairs from the platform in order to further improve liquidity and enhance the trading experience for users.

>> TRON Partners with Metal Pay to Enable Instant Purchase of TRX

Binance previously removed 10 trading pairs earlier in March. Exchanges are known to remove certain trading pairs when those pairs prove to be non-liquid. These non-liquid pairs generally involve altcoins that are not as frequently traded.

Are you excited for Binance’s move into the South Korean crypto market?

Featured image: DepositPhotos © Grey82

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Stockpiling triggers boom in grocery sales as self-isolating Brits buy 22% more alcohol.

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Christmas came early for U.K. grocers as supermarket sales in March trumped those usually posted over the festive period and broke all records, new data shows.

Households facing lengthy lockdowns panic-bought long life items such as pasta, rice and tins of vegetables, as they splashed out a hefty £10.8 billion ($13.4 billion) over the past four weeks at Britain’s grocers, according to latest figures from market research firm Kantar.

The widely-followed data gives the first insight into the effect stockpiling has had on supermarket sales as investors look to food providers, such as Tesco TSCO, -1.84%  , Sainsbury SBRY, +0.10%   and Morrison MRW, -2.41%  , which are increasingly being seen as defensive stocks during the crisis. The U.K’s third biggest player Asda is owned by Walmart WMT, -0.31%  , which has said it is reviewing its options for the chain. Developments in the U.K. grocery market could be seen as a playbook for the U.S. which is slightly behind Britain in terms of the coronavirus crisis.

Read: Resurgent Tesco Stock Could Have More Good News Ahead

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Retailers and their staff have been on the frontline as households prepare for an extended stay at home, with grocery sales amounting to £10.8 billion during the past four weeks alone—that’s even higher than levels seen at Christmas, the busiest time of year under normal circumstances.

“Growth has been primarily driven by people making additional shopping trips and buying slightly more, rather than a widespread increase in very large trolleys [carts].”

In the four days between Monday 16 and Thursday 19 March, 88% of households visited a grocer, making five trips on average—adding up to 42 million extra shopping trips in less than a week.

Read: U.K. Grocer Sainsbury Is Making Big Bets. How That Could Boost the Stock.

McKevitt said: “With restaurants and cafés now closed, none of us can eat meals on the go any longer and an extra 503 million meals, mainly lunches and snacks, will be prepared and eaten at home every week for the foreseeable future.

Those missing the pub have been stocking up on booze to recreate trips to their favorite haunts by socializing with friends over apps like Houseparty and FaceTime. The Kantar data shows alcohol sales were boosted by 22%, an additional £199 million in the past month, as Brits hit the bottle.

Clive Black, an analyst at broker Shore Capital warned: “With so much stocking up, consumption of filled up larders and freezers is likely to lower near-term UK grocery demand.”

While the economic shadow of the coronavirus crisis could be long and dark he offers some optimism: “From a relative perspective, that may enhance the attractiveness of the UK supermarkets as equity investment plays, as their defensiveness, free cash generation, liquidity and solvency, shines through.”

Anthony Fauci: White House Coronavirus Task Force is giving ‘serious consideration’ to broadening guidance on face masks

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Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said Tuesday that the White House Coronavirus Task Force is giving “serious consideration” to broadening the existing guidance on face masks, but he said first priority must be given to health-care workers who are currently experiencing a shortage of masks.

Currently, the Centers for Disease for Control and Prevention does not recommend that the public wear masks. “The idea of getting a much more broad, community-wide use of masks outside of the health-care setting is under very active discussion at the task force,” Fauci, one of the country’s top infectious disease experts, told CNN T, -3.49%. “The CDC group is looking at that very carefully.”

“The thing that has inhibited that a bit is to make sure that we don’t take away the supply of masks from the health-care workers who need them,” he said. “But when we get in a situation when we have enough masks, I believe there will be some very serious consideration about broadening this recommendation of using masks. We’re not there yet, but we’re close.”

“If, in fact, a person who may or may not be infected wants to prevent infecting someone else, one of the best ways to do that is with a mask,” Fauci told CNN’s Jim LaCosta. “So perhaps that’s the way to go and again, I say Jim, that’s under very active consideration. As I say, we’ll be discussing it today, this afternoon, at the task force meeting.”

The Moneyist: ‘All they care about is making money.’ My manager told me to remove my face mask at work. Do face masks work?

Fauci suggested the one thing putting this change of policy on hold is the scarcity of masks in health-care settings. “You don’t want to take masks away from the health care providers who are in a real and present danger of getting infected,” Fauci added. “That would be the worst thing we do. If we have them covered, you could look back and say maybe we need to broaden this.”

This would be a U-turn for the CDC. In the early days of the coronavirus in the U.S., the government health watchdog, the U.S. Department of Health and Human Services and the U.S. Surgeon General all asked the public not to wear face masks unless they were unwell or caring for someone who was sick. A debate over masks has become increasingly heated in recent days.

Previous research has concluded that face masks help reduce contagion by reducing droplets being sprayed into the air during flu season; a Japanese-based study says this works when paired with vaccination, not an option in this case. This study says N95 medical-grade masks do help filter viruses that are larger than 0.1 micrometers. The coronavirus is 0.125 um.

Several Asian countries, including South Korea and Taiwan where wearing face masks is relatively common, appear to have had more success “flattening the curve” more effectively than in countries like the U.S., Spain and Italy. But the World Health Organization and the CDC still say mask usage should be limited to people who have COVID-19 or those who work in hospitals.

Even on the front lines of coronavirus, some women get paid less than men

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Women are more likely than men to work in industries substantially affected by the coronavirus pandemic, according to a new analysis by the Economic Policy Institute — whether on the front lines of patient care or in sectors walloped by social distancing-mandated closures.

And on Tuesday, Equal Pay Day, it’s worth noting that many of these working women still make less money on average than their male counterparts, added EPI, a left-leaning Washington, D.C., think tank. Equal Pay Day marks the point in the year when the average woman’s earnings catch up to what the average man earned in the previous year: Women made about 22.6% less than men in 2019, after controlling for demographic factors.

Some 33.4% of employed women work in the health-care and social-assistance industry, currently overburdened by an influx of COVID-19 cases, as well as in the leisure and hospitality industry, which has been brought to a near-halt by closures aimed at slowing the spread of the virus, according to EPI’s analysis of Bureau of Labor Statistics data. That’s compared to only 15.7% of employed men.

“Women employed in both industries experience a gender wage gap,” wrote Valerie Wilson, director of the EPI’s program on race, ethnicity and the economy.

What’s more, more than one in five employed women work in health care and social assistance, the analysis found, with black women more likely than women of other races and ethnicities to work in a hospital or nursing-care facility.

But despite their likelihood of interacting with patients on the front lines of the pandemic, female physicians and surgeons make nearly 12% less than their male counterparts, according to EPI. Female registered nurses make almost 8% less than their male counterparts.

Within the leisure and hospitality industry, women who work as wait staff and as desk clerks at hotels, motels and resorts also face gender wage gaps of 12% and 11%, respectively.

“While most men and women employed as restaurant wait staff and hotel workers earn modest hourly wages, the existence of a gender wage gap — and thus the elevated financial insecurity these women workers face — means that women in this industry are especially financially vulnerable in the event that they are out of work or on a severely reduced work schedule for an extended period of time,” Wilson wrote.

An earlier analysis by the Pew Research Center found that industries at greater risk of coronavirus-related job loss — like restaurants, retail trade and transportation services — counted “slightly” more women in their ranks (19.4 million women versus 18.7 million men).

Meanwhile, a “gender pay scorecard” of 50 major U.S. companies released this week by the investment firm Arjuna Capital and Proxy Impact, a shareholder-advocacy and proxy voting service, found that only Starbucks SBUX, -2.09%  , Citigroup C, -2.99%   and Mastercard MA, -2.69%   pulled “A” grades; a full 25 of the companies received failing grades. (Starbucks, Citigroup and Mastercard did not respond immediately to requests for comment.)

The scorecard ranked “quantitative disclosures (not qualitative assurances), commitments to report numbers annually, global coverage, and goals to close the gender pay gap.”

Equal Pay Day for all women falls on March 31 this year, but there are additional observances for women of different races and ethnicities, depending on how far into the new year they must work on average to catch up with a white male worker’s earnings from the previous year. Equal Pay Today, a project of the gender-justice organization Equal Rights Advocates, offers a full list here.

This is how the $2 trillion coronavirus stimulus affects retirees — and those who one day hope to retire

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The government’s $2 trillion stimulus package is expected to provide financial relief to small businesses and unemployed workers — but it will also help many people in or on the way to retirement.

The package, known as the CARES Act (short for “Coronavirus Aid, Relief and Economic Security”), is intended to combat the negative economic impacts Americans are suffering as a result of the spreading coronavirus, known as COVID-19. Companies across the country are furloughing or laying off employees, and many other businesses are shut down as part of state and local quarantines. A record 3.28 million people filed for unemployment benefits recently, and numerous others have faced a reduction in income.

Older Americans, who have been urged to stay home because they are at a high risk of complications from contracting the virus, will also benefit from the stimulus bill. There are numerous provisions that affect this demographic specifically, according to the National Committee to Preserve Social Security and Medicare. Other pieces of the law assist Americans who are planning to retire in the future, though there are caveats.

See: Be on the lookout for COVID-19’s hidden cost to older people

Here are a few ways in which the CARES Act will affect older Americans, and what they should know:

More attention, and funding, for nursing homes

The stimulus package will provide extra funding to the Centers for Medicare and Medicaid Services in an attempt to assist nursing homes in keeping their facilities safe and preventing the spread of the coronavirus. Nursing homes, assisted living facilities and other senior-focused centers house some of the most vulnerable members of society, as seen after an outbreak in a Washington state nursing home killed at least 26 people. Individuals age 60 and up are more at risk of complications from the coronavirus than their younger counterparts. The death rate is also much higher for people who are 80 or older than other age groups.

A focus on Medicare and Medicaid services

Seeking medical attention will be easier for some older Americans, such as by offering telehealth coverage for individuals who cannot go to the doctor’s office. The law mentions other examples where telehealth could help, including a temporary waiver of face-to-face visits between home dialysis patients and physicians and using telehealth for recertification of hospice care eligibility.

The package also allows Medicare beneficiaries to receive a three-month supply of medications through Part D, unless refills of the drug are prohibited. The intention for 90-day refills is to reduce the number of pharmacy visits patients may need to take during the “COVID-19 emergency period,” the law states.

Programs have been extended as part of the law, such as the community-based long-term care spousal impoverishment protections and the “Money Follows the Person” program under Medicaid, which helps patients transition from institutional care to community-based care, according to NCPSSM. One provision earmarks money for older Americans and disability programs, such as those that support nutrition and family caregiving services. Another provision focuses on home energy assistance programs that help low-income individuals affected by the virus.

The CARES Act also extends mental health services under Medicaid, which assists patients with mental health and substance use disorders, until Nov. 30, according to the National Law Review’s analysis of the legislation.

Read: ‘I would rather him be lonely that dead’: How to manage when someone you love is in a nursing home

Rebate checks for many Americans

The government will give rebate checks to taxpayers with a Social Security number who meet income requirements. Individuals who earned $75,000 or less in 2019 (or 2018 if last year’s return has not yet been filed) will receive $1,200. Married couples who file jointly will receive $2,400 if they earned $150,000 or less. Check amounts are phased out until the limits at $99,000 and $198,000, respectively.

Americans who claim Social Security benefits, including retirement and disability, are also eligible.

The checks are meant to help cash-strapped Americans stay afloat during this crisis, but individuals who don’t need the money to pay for rent, utilities, food or other necessary expenses may want to consider putting some of that money toward an emergency savings account, credit card debt or retirement account, experts said.

Extra time to fund individual retirement accounts

The Treasury Department delayed the deadline for contributing to an IRA on behalf of the prior year when it extended the deadline for filing tax returns to July 15 this year. People with extra cash can use this time to max out their IRA for last year, which is capped at $6,000, before beginning to fund an IRA for this year, advisers said.

Also see: Receiving Social Security disability benefits? Living abroad? How much — if any — of the $1,200 checks Americans in special situations will get

Waive required minimum distribution rules

Retirees must begin withdrawing from most retirement accounts by the time they turn 72 years old, but that rule has been waived this year as a result of the coronavirus. This enables retirees who do not need that money to keep it in their investment accounts, especially at a time when major stock benchmarks are extremely volatile. Withdrawing assets now could result in taking a loss as well as losing potential interest and returns in the future.

What to look out for

The CARES Act allows individuals to withdraw up to $100,000 from retirement accounts, such as a 401(k) or IRA, for issues related to the coronavirus, such as being infected by the virus or losing a job because of a quarantine, without incurring any penalty fees. The money would still be taxed, although the amount in taxes could be spread out over three years. Individuals have three years to repay the distribution they took, in which case they would also have no tax consequences. This is separate from the provision that increased the amount one can take in a loan from their 401(k) (up to $100,000).

In some cases, taking a hardship withdrawal is unavoidable, especially when faced with a health and economic crisis, but Americans should be wary, said Ed Slott, founder of “You’re draining your savings for retirement,” he said. “This should be a Hail Mary if you are in dire straits.”

More from MarketWatch

Deep Dive: These 60 large U.S. companies are ‘susceptible to a dividend cut,’ according to Jefferies

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The deadly coronavirus is taking a toll on financial markets around the world. Stock-price declines have been swift and relentless.

Now there is intense pressure for companies to shore up cash reserves, not only by reducing investment and suspending share buybacks, but by cutting dividend payouts.

Jefferies global equity strategist Sean Darby has listed 60 companies in the S&P 500 SPX, +0.23%  that he and his colleagues think are “susceptible to a dividend cut.”

Here’s the entire list, followed by explanations and more background from Darby:

Company Ticker Dividend yield Dividend coverage ratio Net debt to equity
General Mills Inc. GIS, -0.18%   3.62% 1.49 177.3%
Evergy Inc. EVRG, -3.18%   3.42% 1.47 117.3%
Sempra Energy SRE, -4.35%   3.48% 1.46 120.0%
Qualcomm Inc. QCOM, +1.09%   3.59% 1.45 74.8%
PPL Corp. PPL, -0.29%   6.43% 1.44 171.9%
American Electric Power Co. Inc. AEP, -2.03%   3.34% 1.42 149.3%
Genuine Parts Co. GPC, +0.71%   4.78% 1.40 114.9%
Consolidated Edison Inc. ED, -1.83%   3.79% 1.38 117.1%
3M Co. MMM, +0.01%   4.27% 1.38 186.1%
International Flavors & Fragrances Inc. IFF, -0.96%   2.78% 1.38 64.3%
PepsiCo Inc. PEP, -0.70%   3.04% 1.37 187.6%
Duke Energy Corp. DUK, -0.67%   4.53% 1.36 130.8%
United Parcel Service Inc. Class B UPS, -1.53%   4.13% 1.33 683.1%
Eversource Energy ES, -3.59%   2.71% 1.33 117.6%
J.M. Smucker Co. SJM, +1.14%   3.18% 1.32 72.9%
Coca-Cola Co. KO, +0.24%   3.64% 1.30 156.3%
Becton, Dickinson and Co. BDX, +1.64%   1.42% 1.30 89.3%
Kellogg Co. K, +0.82%   3.83% 1.25 243.6%
Bristol-Myers Squibb Co. BMY, +2.22%   3.31% 1.20 60.7%
Equity Residential EQR, -3.57%   3.85% 1.15 84.7%
Las Vegas Sands Corp. LVS, -0.05%   7.27% 1.14 132.3%
American Tower Corp. AMT, -2.70%   1.72% 1.13 448.8%
Campbell Soup Co. CPB, +0.57%   3.01% 1.12 759.3%
Federal Realty Investment Trust FRT, +0.87%   5.60% 1.11 121.6%
FirstEnergy Corp. FE, -1.11%   3.85% 1.10 295.2%
Microchip Technology Inc. MCHP, +1.81%   2.13% 1.03 186.8%
Gap Inc. GPS, -1.82%   13.07% 0.96 181.6%
Kinder Morgan Inc Class P KMI, +1.23%   7.54% 0.96 93.4%
Hershey Co. HSY, -2.64%   2.24% 0.96 228.5%
AT&T Inc. T, -1.04%   6.88% 0.93 87.3%
AvalonBay Communities Inc. AVB, -3.21%   4.18% 0.92 67.3%
Extra Space Storage Inc. EXR, -1.28%   3.72% 0.92 179.9%
SL Green Realty Corp. SLG, -1.97%   7.68% 0.91 92.9%
Welltower Inc. WELL, -1.82%   7.38% 0.88 88.9%
Oneok Inc. OKE, +6.94%   18.66% 0.88 204.4%
NiSource Inc NI, -1.92%   3.22% 0.88 159.7%
Boston Properties Inc. BXP, -1.86%   4.22% 0.86 144.5%
Essex Property Trust Inc. ESS, -4.03%   3.68% 0.86 91.1%
AES Corp. AES, +0.15%   4.19% 0.83 306.6%
Simon Property Group Inc. SPG, +1.30%   14.84% 0.82 767.0%
Mid-America Apartment Communities Inc. MAA, -2.18%   3.73% 0.79 70.9%
FedEx Corp. FDX, -1.04%   2.09% 0.79 86.0%
Alexandria Real Estate Equities Inc. ARE, -4.77%   2.85% 0.79 67.5%
Kimco Realty Corp. KIM, -1.29%   11.09% 0.72 106.8%
Broadcom Inc. AVGO, +3.79%   5.41% 0.64 111.1%
Amcor PLC AMCR, -0.72%   5.64% 0.63 97.0%
Equinix Inc. EQIX, -1.64%   1.65% 0.61 129.0%
Regency Centers Corp. REG, -0.74%   5.96% 0.61 64.0%
Molson Coors Beverage Co. Class B TAP, -1.65%   5.66% 0.57 63.5%
Digital Realty Trust Inc. DLR, -2.80%   3.20% 0.55 100.7%
Realty Income Corp. O, -1.70%   5.26% 0.51 81.1%
Newell Brands Inc NWL, +0.66%   6.74% 0.47 121.1%
Williams Companies Inc. WMB, +0.22%   11.58% 0.47 135.7%
UDR Inc. UDR, -4.40%   3.82% 0.46 111.1%
Dominion Energy Inc D, -2.47%   4.90% 0.46 112.3%
Crown Castle International Corp. CCI, -1.47%   3.24% 0.39 226.3%
Iron Mountain Inc. IRM, -2.66%   9.96% 0.38 711.8%
Ventas Inc. VTR, +2.19%   11.01% 0.37 113.7%
Wynn Resorts Ltd. WYNN, +2.75%   6.55% 0.31 533.9%
Healthpeak Properties Inc. PEAK, -3.82%   6.08% 0.06 95.5%
Source: Jefferies

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The table is sorted by declining dividend coverage ratio, which was calculated by the Jefferies analysts by dividing the firm’s estimated earnings for the companies over the next 12 months by the expected dividend payouts based on the current dividend rates. A higher coverage ratio is better. However, a high ratio of net debt to equity is of concern. The net-debt-to-equity ratio was calculated by subtracting cash from debt and dividing by equity.

When asked in an email why he used earnings instead of free cash flow for the dividend coverage ratio, Darby replied: “Many companies will smooth dividend payments, so if we look at earnings measures, we can get an idea of how confident they are about future payments.”

One company that would have made Darby’s list was Macy’s M, -1.96%. However, the retailer suspended its dividend March 20 after temporarily closing all of its stores March 17. Macy’s placed the “majority” of its employees on furlough this week.

Debt-market pressure

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27. Companies that borrow from the federal government will be unable to pay dividends for a year after the loans have been repaid in full.

Of course, companies that don’t receive federal assistance will be able to continue paying dividends and even buying back shares. But in this new climate, management teams have to be careful.

“As companies become more aware that they are running their businesses for the bond holders (and credit markets) rather than for the equity investors, their focus will turn to managing cash rather than earnings,” Darby wrote in his report March 30.

He explained that debt issuers with sub-investment-grade ratings (below BBB) appeared not to have access to the Federal Reserve’s Primary Market Corporate Credit Facility (PMCCF) or its Secondary Market Corporate Credit Facility (SMCCF), which were established March 23.

Darby went further, pointing out that the ratings firms might cut their ratings for BBB-rated bond issuers, making them likely to lose access to those programs.

So there are all sorts of reasons for companies to think ahead and shore up cash any way they can, by suspending share buybacks, cutting capital expenditures and cutting or suspending dividends.

In a report listing large-cap stocks with “safe dividends,” Goldman Sachs analyst Cole Hunter predicted dividends for the S&P 500 would decline by 25% in 2020.

Don’t miss: Watch out for dividend-stock ‘yield traps’ during the coronavirus crisis

Outside the Box: Think very hard before you make these 6 retirement decisions

This post was originally published on this site

Retirement planning involves employing strategies that once initiated, place you on an unchangeable path. In other words, once a course of action is begun there may be no turning back.

The problem, of course, is that “life happens,” and time and changing circumstances have a habit of making prior choices problematic. Here is a list of six selections that fall into the unalterable category:

• Converting to a Roth IRA

• Picking a retirement date

• Purchasing an annuity or selecting an annuity as a retirement plan distribution option

• Choosing the form of an annuity distribution (e.g., life annuity vs. joint and survivor annuity)

• Picking a Social Security start date

• Paying a large down payment to a Continuing Care Retirement Community (CCRC)

Let’s take a closer look at each of these retirement planning decisions by briefly describing the choice that needs to be made, detecting if a window of escape exists or if the decision is irreversible, and deciding if there is any strategy available to mitigate the finality of the issue.

Converting to a Roth IRA to minimize lifetime taxes

Many of you will have the choice of whether to convert your traditional IRA that will be taxed when distributed to a Roth IRA that will be tax-free when distributed assuming specified conditions are met. Your goal will be to minimize the lifetime taxes owed on your retirement savings. The rule of thumb is that if tax rates will be higher in retirement the Roth option is preferable and vice versa. More specifically, a Roth conversion means you are paying the taxes today in hopes that your converted funds will provide a greater yield by not having to pay taxes when they are distributed. The break-even analysis centers on whether the tax-free withdrawals exceed the time-value adjusted price of paying taxes upfront. Unfortunately, once you convert your traditional IRA to a Roth IRA you are essentially stuck with your choice. It is important to note that Roth recharacterizations are no longer a viable option. In other words, before the Tax Cuts and Jobs Act it was possible to rewind a Roth conversion to achieve more favorable tax treatment. You are no longer able to make a Roth conversion at the start of the year, but reverse course later in the year if stock values declined and redo the conversion at a later time with the lower-valued (and consequently lower-taxed) stocks.

Mitigating the unalterable decision: There is a strategy with Roth conversions that may take the sting out of the irrevocable nature of the transaction. You can plan a series of annual Roth conversions to lessen the tax impact for each year. In other words, by using a strategy to keep your taxable income below the next higher bracket so that, for example, none of your conversions are taxed at the 32% marginal bracket, but instead are only taxed at the 24% bracket. The consequence of multiple conversions is to delay the inescapability associated with the Roth conversion. The upside is that a measured approach gives you time to adapt to changing circumstances (plus the advantages of the “fill the bracket” strategy). The downside is that the math might not work out if you wait too long to convert because the overall yield on investment will be limited by fewer years of potential market growth.

Picking a retirement date

Another example of a retirement planning decision that will be difficult (if not impossible) to walk back is choosing your retirement date. Once you make the choice to hand in your notice it is unlikely that you can reverse course and restart your career in the future. There is, however, the escape window that your current employer or another employer may decide down the road that hiring or rehiring you is a valuable notion.

Mitigating the unalterable decision: One way to test the waters of retirement is to ask your employer for a sabbatical. A second way to avoid permanently surrendering your entire salary might be to surrender only part of your salary by entering into some sort of phased retirement program. In many cases the lingering connection brought about by phased retirement could grease the skids for resuming full-time work if it is desired. Also remember to explore any options under the Family and Medical Leave Act (FMLA) that may be available for you.

Purchasing an annuity or selecting an annuity as a retirement plan distribution option

Annuitizing part of your retirement nest egg is not for everyone. However, if you are so inclined, then your decision to either buy an annuity or choose an annuity distribution from the plan is for the most part irreversible once annuity payments begin.

Mitigating the unalterable decision: One common strategy to delay the irrevocable decision is to ladder purchases of single premium immediate annuities. This is to say that you can buy smaller annuities over several years and delay losing liquidity on part of your funds. As an bonus you may mitigate interest rate risk by delaying annuity purchases to when historically low interest rates have rebounded (recall that annuities provide more guaranteed income when interest rates are higher).

Choosing the form of an annuity distribution

Yet another decision is picking the form of annuity. Two common choices are life-only annuities and joint and survivor annuities. All else being equal a life only annuity will provide a larger monthly payment, but it stops payments upon the annuitant’s death. However, a joint and survivor annuity will continue payments to the survivor (typically a spouse) assuming that the spouse outlives the annuitant. For example, putting $100,000 in a life annuity for a 65-year-old might yield a $706 monthly payment. Conversely, placing $100,000 in a 100% joint and survivor annuity might yield a monthly paycheck of $586 and will continue as long as one of the two spouses (both currently age 65) is alive. In any case, once made the selected payout option made is not changeable.

Mitigating the unalterable decision: One way to mitigate the lower monthly income is to have an annuity pop-up feature that allows the annuitant’s income to increase at the death of the non-annuitant spouse. However, there is a cost in monthly income when such a provision is available. A second way to avoid the drop in monthly income is to simply choose the life annuity (with spousal consent) and the have other assets available (e.g., life insurance) to match or exceed the income that the surviving spouse would have had if a joint and survivor annuity had been chosen (one variation of this strategy is sometimes referred to as “pension maximization”).

Picking a Social Security start date

Another choice that must be made is choosing a date to start Social Security benefits. Typically, people choose an age between 62 and 70. As a general rule the longer the delay to start benefits the more monthly income. Much has been written about this topic and it has always been this author’s observation that waiting until 70 is preferable in many cases. However, the point of this article is to promote choices from being locked in.

Mitigating the “unalterable decision”: One bit of good news concerns the flexibility to change your mind for up to a year after you file for benefits. In other words, if your situation changes you are able to withdraw your Social Security claim and refile for increased benefits at a later date. There are three conditions: first, the reversal of course must come within 12 months of filing for benefits; second, you must repay all that you have received (including payments made on your behalf to Medicare); and third, you are limited to one withdrawal of your application in a lifetime. You can use form SSA-521 to make your request. Once the year passes, however, the decision to take a lower monthly amount from Social Security (for a longer payout period) is locked in.

Paying a large down payment to a continuing care retirement community (CRCC)

Some may see value in moving to a CCRC in order to get both health care services as well as amenities like one-floor living accommodations, prepared meals in a common dining hall, light housekeeping, planned social activities, etc. The problem is this opportunity usually comes with a both a monthly fee and an upfront lump-sum payment. The good news is the lump-sum payment may be partially refundable for a specified time (e.g., you forfeit 5% a month of the down payment for every month you live at the CCRC). Under this example, the payment of a $200,000 lump sum would be lost after 20 months. One way to look at this is that your monthly rent for 20 months was increased by $10,000 a month because of your death after 20 months! In other words, a short-lived resident made an irrevocable payment that lost them a significant amount of their estate.

Mitigating the unalterable decision: One way to avoid the untimely loss of the lump sum is to closely monitor the refund feature when you choose a CCRC. A second way is to carefully choose whether the refund is for the couple or the individual, because couples who have one spouse die earlier than expected and one spouse live on will forfeit the lump-sum as opposed to a lump-sum that applies separately to each party. A third alternative might be choosing a CCRC with slightly higher monthly costs, but slightly lower lump-sum payments.

Retirement decisions that lock you into a course of action should be carefully planned. Delaying the decision may give you more options, however, you may pay a price for the delay.

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