#blue-chip

Solana Blue-Chip NFT Project DeGods Has Opted for 0% Royalties. Is This the Best Way Forward?

Royalties have actually been the lifeline supporting NFT developers to develop and flourish on the planet of Web3. But with leading Solana NFT task DeGods blazing a trail to get rid of royalties, what repercussions will it give the NFT community? DeGods, among the leading Solana NFT brand names, has actually gotten rid of its royalty cost. This likewise uses to y00 ts— an approaching NFT…

Stock Exchange: Milan turns up (+ 1.2%), Banco Bpm and Bper sprint

(ANSA) – MILAN, FEBRUARY 15 – Piazza Affari turns positive in the first half hour of trading after a slow start. The Ftse Mib index gained 1.29% to 26,754 points driven by Banco Bpm (+ 4.5%) after the ‘overweight’ recommendation and the increase in the target price to 4.2 euros by Morgan Stanley. Purchases also on Bper (+ 4.04%), following the acquisition of Carige (-0.01%). However, all eyes are…

Think blue-chip dividend stocks are safe?

You better watch out. Buying iconic “tried-and-true” stocks might give you a false sense of security.

Take a look at Kraft Heinz.

The iconic brand lost 30% of its value in one day:

That’s despite having one of the world’s most recognizable brands, a seemingly stable business, and the backing of Warren Buffett.

Kraft Heinz had many issues, but the main reason the stock tanked was a dividend cut.

And that’s a death sentence for any dividend stock.

Take a look at what happened to General Electric (GE) when it surprised investors by slashing its dividend 50% in November 2017:

GE shares plunged over 10%.

One year and a second dividend cut later, shares have tanked 57%.

Bigger Is Not Always Better

Why are dividends so important?

Many well-established companies don’t grow fast enough to compensate investors for the risk of owning the company’s stock. So they pay dividends as a “bonus” to lure investors in.

In fact, most investors buy these companies just for the dividends. For this reason, the companies go to great lengths to pay them.

Some of these companies even borrow money and use the debt to pay a higher dividend.

That’s exactly what Kraft Heinz was doing. And this strategy often ends up being a disaster for investors.

Lucky for you, I developed a tool that helps gauge the safety of a company’s dividend.

I call it the Dividend Sustainability Index (DSI).

How to Select the Right Dividend Stocks

You must look at three key things when evaluating dividends.

The most important is the payout ratio.

The payout ratio is the percentage of net income a firm pays to its shareholders as dividends. The lower the payout ratio, the safer the dividend payment.

The second is the debt-to-equity ratio.

The more debt a company has, the harder it gets to run a business. This includes—you guessed it—paying the dividend.

The third is free cash flow. This is the amount of cash left over after a company pays its expenses.

If any of these measures is flashing red, you know the dividend is in trouble.

A low DSI score tells me the odds are high that a company will cut its dividend. And you already know what that means…

But you don’t have to worry about it anymore. The Dividend Sustainability Index (DSI) will keep you out of stocks like Kraft Heinz and GE.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

Pearson enters into 500 million sterling pension insurance deal with L&G

Pearson enters into 500 million sterling pension insurance deal with L&G: Sky News

The agreement between the former FT owner and L&G will be announced alongside Pearson’s annual results.

TFM Watch

Pearson, the FTSE-100 education group, will announce on Friday a renewed drive to restructure its pension liabilities when it unveils a £500m buy-in deal with Legal & General (L&G).

Pearson will…

Forty years ago, I spent most of my summer in my family’s lakeside cabin in northern Minnesota. This wasn’t a luxury vacation. The cabin barely had running water. We had little to do except play in the lake.

So when word spread that the No. 1 smash-hit movie of the summer had finally made its way to the nearest town… I piled into a Chevy Vega with a group of friends and drove 35 minutes to the theater in Brainerd, Minnesota.

After a pit stop at the A&W for burgers and fries, we headed downtown to see Star Wars for the first time.

When that first Imperial Destroyer swept in from overhead, we were hooked… as were millions of people around the world. The pop-culture phenomenon has endured for decades. Today, kids are getting just as hooked by the super-popular new sequels as my friends and I were by the 1977 science-fiction classic.

Other kids (and adults) are flocking to movies built around beloved superheroes – like Iron Man from Marvel – or animated princesses – like Anna and Elsa, the omnipresent Norwegians of Frozen.

You might have noticed that I’m talking about properties that are all owned by Disney (NYSE: DIS).

Some find it unseemly that a “big corporation” owns so many pieces of our culture. Critics get particularly angry when the entertainment giant scoops up already beloved characters or franchises. They agonize over how Disney might ruin something they already love – throwing around words like “commercialize,” “sanitize,” and “Disneyify.”

For instance, Disney only took over Star Wars in 2012 when it bought the rights from Lucasfilm, the production company of the original movie’s creator, George Lucas. Many fans of the original worried that, in an attempt to sell as many merchandising products to as large an audience as possible, Disney would sap all the charm and originality out of the stories and characters.

Not me… Disney consistently cranks out high-quality entertainment. The broad success of the Marvel movies (another acquired franchise) and 2015’s Star Wars: The Force Awakens once again proves Disney knows how to make a movie. They’re fun, exciting, and wildly successful.

As a result of its long-held reputation for quality… Disney’s entertainment empire pulls in an eye-popping amount of cash. It’s not just because of the quality of these franchises. It’s because the American consumer is alive and well. And when you have a product that appeals to a wide-ranging set of folks, the “returns to scale” are massive.

People are spending their money on things they want. Total retail sales (excluding food) have grown well past what they were even in the glory days of the housing boom.

Prior to the recession, The U.S. peaked at about $320 billion in retail sales per month. That declined to $292 billion at the depths of the recession. Now we’ve steadily climbed to a new peak of $402 billion.

And many of those billions are going to Disney.

Let’s just look at the latest Star Wars movie for an example…

Star Wars: The Force Awakens sold about $2 billion worth of tickets worldwide. It cost about $245 million to make… That’s a good investment return. (We’d be happy with 716% any day.)

But don’t forget merchandise sales, from which Disney will earn an additional $6 billion.

And that’s just the first of five planned Star Wars sequels (and likely more after that).

Or think about the Marvel franchise (which Disney purchased in 2009), which creates movies based on the established comic-book superheroes.

These movies continually gross between $500 million and $1.5 billion with each release. And Disney will be putting out multiple Marvel movies a year on a road map that goes all the way out to 2028.

We haven’t even gotten to the stable of Disney princesses and their merchandise, which brings in $5.5 billion a year. Or Mickey Mouse… which brings in even more.

Disney’s distinctive advantage is about finding wide appeal in the new media environment.

Things have changed over the last few decades. We have so many entertainment options that it’s difficult to attract a wide audience.

The most-watched television episode of the 1980s was the finale of M*A*S*H*. About 125 million viewers tuned in.

The most-watched TV show of the 2010s was an episode of Undercover Boss (the ending is a tearjerker). Only 38 million watched.

Since 1980, the population of the U.S. has grown by 100 million people and the income per person has grown by 50%. That means when you can pull in a wide audience… when you can cut through all the other things that people can be doing… and find entertainment with wide appeal, the profits are outstanding.

Only Disney seems to be able to do that these days. Between its movies and its ownership of ESPN – the cable sports network that hosts the massively popular Monday Night Football – it can capture a bigger audience than any other form of entertainment.

Disney has $5 billion in cash on hand. It has a profit margin of 16.6%. Today, shares trade for 18 times earnings, which is in line with the broader market.

With several highly anticipated movies coming out in theaters and theme-park expansions planned, I wouldn’t be surprised to see even more growth this year.

Disney is just one of the 25 high-quality, blue-chip stocks I feature in The Blue Book: An Unconventional Way to Upsize Your Retirement. In this book, I explain how to use options to earn safe, reliable income on some of the world’s best companies.

Venezuela currency blues hit U.S. blue-chip companies

Venezuelan bolivar banknotes and a U.S. dollar banknote, folded as boats, are seen at a fruit and vegetable store in Caracas July 10, 2015.

Reuters/Marco Bello

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A worker arranges Colgate products on a shelf at a supermarket in Caracas February 12, 2013.

Reuters/Jorge Silva

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BOSTON Venezuela’s currency woes cut nearly $3 billion in profit at U.S. blue-chip companies during the second quarter and prompted Procter & Gamble Co (PG.N) to remove its operations in the South American country from its consolidated financial reports.

More so-called deconsolidation moves and exits from Venezuela are likely to happen during the second half of the year as U.S. corporations grow increasingly frustrated with Venezuela’s sinking Bolivar currency, according to analysts and U.S. regulatory filings.

Deconsolidating Venezuelan operations means that business can largely no longer hurt or benefit a U.S. parent company’s financial results. Often companies are taking a big one-time charge so that they can ring-fence what is left in Venezuela.

Colgate-Palmolive Co (CL.N) and Goodyear Tire & Rubber Co (GT.O), for example, said they also may deconsolidate their Venezuela operations if economic conditions in that country worsen, according to U.S. regulatory filings made this week.

And Mattel Inc (MAT.O) said it may cease operations in Venezuela altogether if volatility in Venezuela worsens.

With slumping crude oil prices and debt payments coming due this year, the Venezuelan government has fewer U.S. dollar reserves available to meet the private sector’s demands. As a result, entities may have a harder time obtaining U.S. dollars than any time since currency controls were first implemented in 2003, Ernst & Young said in an April report.

Jack Ciesielski, president of investment research firm R.G. Associates, said if conditions do not improve in Venezuela, he expects to see more companies follow P&G’s lead.

“I’d say the die has been cast,” he said.

Drug maker Merck & Co Inc (MRK.N) took a $715 million second-quarter hit against profit after it revalued its Venezuela assets using a less preferential exchange rate.

But the biggest impact from Venezuela’s currency woes came from Procter & Gamble. The world’s largest consumer products maker on Thursday announced a $2.1 billion charge against earnings, reflecting the company’s inability to convert Venezuela’s currency or pay dividends.

Beginning in the third quarter, P&G will exclude the operating results of its Venezuelan subsidiaries from its consolidated financial statements.

Hits to U.S. corporate profits in Venezuela accelerated in February when the President Nicolas Maduro devalued the bolivar by 70 percent via a new currency system known as Simadi. Previously, many U.S. companies valued their monetary and non-monetary assets at the most preferred rate of 6.3 bolivars to the dollar. But under Simadi, the exchange rate has been around 200 bolivars.

(Reporting By Tim McLaughlin; Editing by Cynthia Osterman)