Out Fox The $treet

  ZIM Integrated Shipping Services reported a solid Q4 2022 earnings beat while container shipping rates continue to plunge. The company announced a surprising $6.40 dividend payout for Q4, including a partial true-up of 14% for the year. ZIM Integrated Shipping stock is expensive, with the tough container shipping market likely to make hitting aggressive financial targets difficult, likely leading to an elimination of the dividend. After  reporting a beat  to Q4 earnings expectations,  ZIM Integrated Shipping Services Ltd.  ( NYSE: ZIM ) rallied on hopes a strong dividend would continue. The management team provided a large range of financial outcomes for 2023 and investors  shouldn't assume the best possible outcome. My  investment thesis  remains Bearish on the stock after this initial rally heading into a big dividend payout for Q4. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer p...

Exxon Mobil continues to boost net debt levels in order to pay massive dividends. The energy giant continues to cut investing in the future in order to pay an 8.3% yield while watching the stock collapse. The stock isn't investable until the company cuts the dividend at least 50% similar to BP. After another quarter of massive amounts of cash exiting the balance sheet in favor of debt,  Exxon Mobil  ( XOM ) investors should want the energy giant to consider cutting the dividend. The biggest issue is that the company can't afford to correctly invest in the future with the massive dividend overhang. My  negative investment thesis  continues to project the stock having less value due to $15 billion in annual payouts causing irrational asset sales and volatile capital spending decisions that hurt investors. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please read the disclaimer page for more details. 

AT&T took a nearly 10% hit from the recent highs due to negative analyst calls. The stock will benefit from up to $45 billion in share buybacks and debt repayments from 2020 to 2022. My $42.50 price target values the stock at a 2022 EV/EBITDA multiple of only 6.9x. A few negative analyst calls has  AT&T  ( T ) suddenly down $3 from the recent yearly highs near $40. While  my views  on the financial projections of the company are similar to those of these analysts questioning revenue growth potential in entertainment and the new SVOD service, my view on the stock valuation is where the disagreement exists. The stock is cheap on this dip and my price target is still firmly up at $42.50. Read the full article on Seeking Alpha.  Disclosure: Long T. Please review the disclaimer page for more details. 

CenturyLink continues to see hidden benefits from cutting the dividend, including the recent rolling over of 2022 debt at lower rates. The company forecasts a revenue inflection point in key divisions. The stock trades at an attractive EV/EBITDA multiple of 5x. CenturyLink  ( CTL ) continues to prove the value in cutting the dividend at the and beginning of the year and speeding up the path to repay debt as the company makes progress on a major cost transformation project following the purchase of Level 3. The financial position of the telecom continues to improve reinforcing the  bullish investment thesis . The stock is only a major inflection point in the company returning to revenue growth away from a strong rally. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please read the disclaimer page for more details. 

Microsoft announced an 11% dividend hike and a $40 billion share buyback. The tech giant failed to impress with its capital return plans. The stock isn't likely to see a net payout yield to top the existing 3% level. Don't own Microsoft for this capital return plan, and actually avoid the stock on the negative ramifications of the weak signal. The announcement of a large share buyback might grab headlines and drive a stock higher in the short term, but investors really need to break down the impact before rushing to buy a related stock. The  big $40 billion share buyback  from  Microsoft  ( MSFT ) is a prime example of form over substance. In fact, investors should really question if the tech giant should repurchase shares at these levels and whether this move signals a top in the stock. Read the full article on Seeking Alpha.  More commentary - WhoTrades Disclosure: Long AAPL. Please review the disclaimer page for more details.  ...

Since Jeff Story took over the CEO role last year, CenturyLink (CTL) has done everything to raise free cash flows. The stock continues heading lower based on irrational fears due to 5G broadband and dividend concerns.

IBM led the world in patents for the 26th consecutive year. The dividend yield sits at the highest level in over a decade at 5.2%. The stock continues to trade at only 8.5x forward EPS estimates. The Red Hat deal provides a potential catalyst with a new CEO. International Business Machines   ( IBM ) continues to lead the country in technology development that doesn't actually lead to meaningful revenue growth. The technology company does generate enough to reward investors with a 5%+ dividend yield and a stock trading at only $120 with a potential big catalyst from the Red Hat merger. My   investment thesis   remains bullish on this dip to $120. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please review the disclaimer page for more details.   

The news on the Samsung 5G Galaxy and iPhone should solidify that 5G won't be ready for prime time anytime soon. Verizon recently hit $60, topping off a big rally since the summer. The improved payout ratio from AT&T will make Verizon a source of funds as investors flip into that much higher dividend yield. The   announcement   that   Samsung   ( OTC:SSNLF ) and   Verizon Communications   ( VZ ) won't launch a 5G phone until next year will likely lead to a pause in Verizon stock. The stock recently hit   my target   at $60 likely on the back of 5G excitement. The lack of devices to connect to a 5G network should cause the excitement over the new technology to come to a sudden halt. Read the full article on Seeking Alpha.  Disclosure: Long AAPL, QCOM. Please review the disclaimer page for more details.   

GM plans to close multiple plants that focus on the assembly of cars. The company forecasts increasing automotive cash flows by ~$6.0 billion by 2020. GM is set survive any current down cycle in the auto sector and thrive beyond 2020 as TaaS ramps up. My  investment thesis  has long held that the  General Motors  ( GM ) under the leadership of CEO Mary Bara is not your fathers GM. The auto manufacturer has correctly invested in transportation-as-a-service (TaaS) opportunities to position the company for the future while cutting costs. The stock has lagged due to fears of peaking auto sales, but the transformation should position GM to profit through a down cycle and into the massive TaaS opportunity down the road. Read the full article on Seeking Alpha. 

AT&T trades back near the yearly lows at $29. The stock offers an incredible 6.8% dividend yield. Analyst meeting on Nov. 29 should provide a catalyst for the stock. Market will soon shift focus to $25 billion FCF focus. While my   investment thesis   has constantly slammed on the decisions of   AT&T ( T ) management to shift business away from building the best wireless network, the stock has turned into a bargain due to strong free cash flows. At $29, AT&T offers a nearly 7% dividend yield while recently backing incredibly bullish financials for 2019. The ongoing stock weakness remains an opportunity. Read the full article on Seeking Alpha.  Disclosure: Long T. Please review the disclaimer page for more details.   

CenturyLink fell 10% following Q3 results despite boosting FCF targets. The company remains on track for reaching merger synergy targets including a large boost to EBITDA margins. The stock weakness provides investors with a healthy 11.4% dividend yield. My   previous research   highlighted how the market had bizarre reactions to the quarterly reports of   CenturyLink   ( CTL ) and Q3 was no different. Despite all key metrics improving, the market chose to focus on the company pruning low-margin customers. Use the weakness to again own this massive 11.4% dividend yield. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please review the disclaimer page for more details.   

Verizon made a near perfect dividend hike of 2.1%. The forward dividend yield is now about 4.5%. The wireless company has annual dividend payout obligations of nearly $10 billion. Exiting the media business would allow Verizon to avoid the tech wars. Last week,   Verizon Communications   ( VZ )   increased the dividend   for the 12th consecutive year. Investors wanted a bigger hike due to higher cash flows from tax reform, but this dividend hike was the perfect amount to not lose shareholders while preserving cash for the coming tech war.  Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

Qualcomm (QCOM) increased the quarterly dividend by 9% to $0.62 per share. The annual dividend yield jumps to over 4% on this hike. More importantly, this sets the wireless tech giant up for a rally as the Broadcom (AVGO) buyout comes to a head.

Anybody following my research knows that IBM (IBM) has been an attractive stock to own below $150 as the market missed the turnaround story and shift into new technologies like blockchain. The company issued a long-term model today at an Investor Briefing that should help the stock gain from here at $155.

Apple finally announced the actual repatriation tax hit at $38 billion. The company plans to spend aggressively on capital expenditures and hiring in the U.S., squashing any likely big-scale acquisition. Investors should expect a standard 10% dividend hike each of the next two fiscal years in line with historical dividend hikes. Any shift from the standard dividend hike and capital return plans would actually signal a negative view of the future. Despite all of the recent debates regarding the repatriation tax including in the comments section of my   previous article   and forecasts of a ramped up capital return plan,   Apple   ( AAPL ) has so far not made any statements regarding changing existing plans. For numerous reasons, investors should want the tech giant to keep trucking along with the existing capital return plans and stick to a 'normal' dividend hike. Read the full article on Seeking Alpha.  Disclosure: Long AAPL. Please review...

Apple remains in an enviable position with a massive cash position. The tech giant faces a large repatriation tax bill payable over eight years. Previous capital allocation moves favored maintaining large cash balances contrary to analyst calls for large capital returns or a mega acquisition. A strong war chest reduces investment risk. A lot of discussion surrounds whether  Apple  ( AAPL ) will ramp up stock buybacks and acquisitions due to the repatriation of foreign earnings provision in the Tax Cuts and Jobs Act. A couple of analysts suggest a ramp up in stock buybacks while my  previous research  doesn't back this theory due to a big repatriation tax hit. Read full article on Seeking Alpha.  Disclosure: Long AAPL. Please review the disclaimer page for more details. 

AT&T warned on Q3 results due to hurricanes. The company provided a secondary nugget that the pay-TV business faced even greater cord-cutting pressure. Investors should expect 2018 EPS cuts. Hidden within a  warning  for Q3 earnings,  AT&T  ( T ) detailed more weakness in the pay-TV segment. My research previously  warned investors  of troubles ahead as the NFL protests would only further hit a segment in decline. Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Frontier Communications completed a reverse split on Monday. The stock has been absolutely beat up due to this move and a dividend cut. The market needs to focus back on cash flows. Back in May,  my thought  was that  Frontier Communications  ( FTR ) was attractively priced below $1.50. My major concern in owning the telecom stock was a lingering shakeout from the dividend cut and reverse split that has the stock hitting new lows now. Read the full article on Seeking Alpha.  Disclosure: Long CTL. Please review the disclaimer page for more details. 

Citigroup has recently held up better than other large financials. A big dividend hike at the last CCAR was a catalyst for the stock. The large financial appears best positioned to hike the capital return this year, providing a catalyst for the cheap stock. Despite obvious value and still trading below book value,  Citigroup  (NYSE: C ) has struggled to move beyond $62. The large financial hasn't been hit by the general weakness in the sector, though one shouldn't see that as reason for the stock to not rally. Read the full article on Seeking Alpha.  Disclosure: Long C. Please review the disclaimer page for more details. 

Pfizer is down sharply over the last couple of months culminating with a decision to not split into two companies. The company has a stock buyback plan, but chooses to use larger amounts of cash on making acquisitions such as paying $14 billion for Medivation. Pfizer isn't a horrible stock to own, but the signals don't suggest outperformance for the next year. At first glance, the multi-month drop in  Pfizer (NYSE: PFE )  appears to offer an opportunity. After all, the dividend is back to a respectable 3.5%. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.