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Kind of an update to comment # 34 - PepsiCo is laying off corporate employees as the company commits to millions of dollars in severance pay, restructuring, and 'relentlessly automating'

PepsiCo has kicked off a round of layoffs impacting employees in multiple offices, two people who were laid off by the company told Business Insider.

The company announced in a quarterly earnings call last week that it expects to incur $2.5 billion in restructuring costs through 2023, with 70% of charges linked to severance and other employee costs.

Roughly $800 million of the $2.5 billion is expected to impact 2019 results.

PepsiCo also recently announced plans to restructure the organization and "relentlessly" invest in automation.

PepsiCo has kicked off a round of layoffs as it begins a four-year restructuring plan that is expected to cost the company hundreds of millions of dollars in severance pay.

This week, PepsiCo employees in offices including Plano, Texas, and the company's headquarters in Purchase, New York, were alerted that they are being laid off, according to two people who were directly impacted by the layoffs. These two workers were granted anonymity in order to speak frankly without risking professional ramifications.

At least some of the workers who were alerted about layoffs will continue to work at PepsiCo until late April as they train their replacements in the coming weeks, the two workers told Business Insider.

Because of the secrecy surrounding the layoffs, these workers said it was unclear how many teams or individuals had been impacted. PepsiCo declined to comment on the layoffs.

By PepsiCo's own estimates, the company's layoffs are expected to be a multimillion-dollar project in 2019.

Last Friday, PepsiCo announced in a filing with the Securities and Exchange Commission (SEC) that it is expected to incur $2.5 billion in pretax restructuring costs through 2023, with 70% of charges linked to severance and other employee costs. The company is also planning to close factories, with an additional 15% tied to plant closures and "related actions."

Roughly $800 million of the $2.5 billion is expected to impact 2019 results, in addition to the $138 million that was included in 2018 results, the company said in the SEC filing. In February 2018, PepsiCo announced plans to lay off less than 1% of its more than 110,000 corporate employees, including 200 employees at its Purchase, New York, headquarters.

PepsiCo also announced a commitment to save $1 billion annually through 2023. Efficiency and restructuring were major themes in PepsiCo's quarterly earnings call with investors on Friday.

"Our second set of priorities ... involves becoming more capable, leaner, more agile and less bureaucratic," CEO Ramon Laguarta said. "In doing so, we will drive down cost and that enables us to plow the savings back into the business to develop scale and sharpen core capabilities that drive even greater efficiency and effectiveness creating a virtuous cycle."

Being leaner and more agile seems to be linked to cutting jobs, with chief financial officer Hugh Johnston confirming to CNBC that the company plans to lay off workers in positions that can be automated. Laguarta said on Friday that PepsiCo is "relentlessly automating and merging the best of our optimized business models with the best new thinking and technologies."

Last week, PepsiCo announced it would reorganize its beverage business into four US regional divisions and a single Canadian division, according to an internal memo obtained by trade publication Beverage Digest. According to Beverage Digest, the memo said the restructuring will "simplify the way we work, remove red tape and push decision-making and resources into the market."

https://www.businessinsider.com/pepsico-layoffs-begin-restructuring-plan-kicks-off-2019-2

9 stocks with dividend yields over 4% in a sector that often beats the broader market

Real estate investment trusts, or REITs, are usually considered income investments, so some investors panic and sell them when interest rates are rising. But the Federal Reserve’s recent change in policy should put that fear to rest.

Meanwhile, you can see that REITs have performed very well compared to the broader stock market in the long run. We list S&P 500 REITs, sorted by yield, below.

We pointed out in August that a knee-jerk reaction to avoid REITs when interest rates are rising isn’t supported by performance. A rising-rate environment is typically one that also features significant economic growth, which means a REITs’ rental income and earnings will rise. This tends to offset negative price action from rising rates.

The Fed’s recent change in direction may have eliminated the usual fear of interest-rate increases, at least for now.

And the silver lining is that REITs as a group have measured up well against the broader stock market over long periods. Here’s how the S&P 500 REIT industry group’s total returns (with reinvested dividends) have compared to the entire S&P 500 SPX, -0.21% over various periods. First, we’ll show total returns and then average annual returns.

Total returns through Feb. 15, except as indicated:


S&P 500 REITs S&P 500
2019 12.7% 11.0%
2018 -2.1% -4.4%
2 years 20.3% 22.9%
3 years 42.3% 58.3%
5 years 61.8% 67.3%
10 years 388.2% 314.5%
15 years 275.6% 230.2%
Source: FactSet

You can see that the 10-year figures are distorted because in early 2009, we were close to the market bottom that followed the deep declines experienced during the credit crisis.

It might be more useful to compare average annual total returns over long periods:

S&P 500 REITs S&P 500
2 years 9.7% 10.9%
3 years 12.3% 16.5%
5 years 10.1% 10.8%
10 years 18.4% 15.3%
15 years 9.2% 8.3%
Source: FactSet

The 15-year figures are particularly interesting. Despite the 2008-2009 crisis, the REITs have performed better than the S&P 500, even though the full index is so heavily weighted to large tech stocks, such as Facebook FB, -1.25% Apple AAPL, -0.26% Amazon AMZN, -0.13% Netflix NFLX, -0.55% and Google holding company Alphabet GOOG, -0.79% GOOGL, -0.86%

S&P 500 REITs: yields and returns

While we have compared total returns with dividends reinvested, you won’t be reinvesting if you are buying REIT shares for income.

It is very important to consider your investment objective. Even if you are not investing in REITs for income, they can help you diversify your portfolio. You should also consider a REIT’s particular specialty and growth prospects when deciding whether to invest.

Here are all 32 REITs in the S&P 500, sorted by dividend yield:

https://www.marketwatch.com/story/9-stocks-with-yields-over-4-in-a-sector-that-often-beats-the-broader-market-2019-02-20

10 most popular stocks among hedge funds

Hedge fund managers still like the FAANGs; plus, PayPal joins Visa as a top holding

The 10 most popular stocks among hedge funds remained relatively stable throughout the turbulent fourth quarter, with only Bank of America BAC, -0.36% falling off the list, being replaced by PayPal PYPL, +0.77% which is now more popular among leading hedge funds than every major banking stock.

The FAANG stocks plus Microsoft MSFT, +1.96% continued to dominate the list as they have for the past seven years that we’ve been compiling it. Apple, Google and Microsoft were fixtures around the top three during much of that period, while Amazon and Facebook FB, -1.25% have been two of the most popular stocks of the past two years.

Amazon made the most noteworthy move on the list during the quarter, leapfrogging Facebook into second place after several hedge funds sold off the social media giant, including Leon Cooperman’s Omega Advisors. And while Apple has received headlines due to Warren Buffett selling a small portion of Berkshire Hathaway’s BRK.B, -0.37% position in the company, there was in fact a slight uptick in hedge fund ownership of Apple. Netflix remained the only FAANG stock outside the top 10.

Top 10 list

Check out a detailed list of the 10 most popular stocks among hedge funds below, among the exclusive collection of 743 hedge funds tracked by Insider Monkey. Included are the values of hedge funds’ positions, the stocks’ recent market performances, and their most notable hedge fund shareholders.

10. J.P. Morgan Chase (TICKER:JPM)

9. PayPal

8. Alibaba

7. Apple

6. Visa

5. Alphabet Class C (TICKER:GOOG)

4. Alphabet Class A (TICKER:GOOGL)

3. Facebook

2. Amazon

1. Microsoft

https://www.marketwatch.com/story/10-most-popular-stocks-among-hedge-funds-2019-02-20

You can still buy more ATRS @Patrick (think you got in around $2.50s), it's going to double within 1-2 years. Also VCEL hit $20 today and ARRY $23.50. Nice 5 baggers. ATRS next.

Thanks @mell!

I do have a better than 50% gain on ATRS, and 144% on VCEL thanks to you. Up more than 10% on ATRS. Glad I bought on your advice, and may well do it again.

I dug through the divy aristocrat wiki Rin posted. Looks like most dividends are lowish. Maybe 2-3% if I recall correctly.

Standouts are:

Altria MO 6.53
The Coca-Cola Company (KO) 3.42
AT&T Inc. (T) 6.85%
Ford Motor Company (F) 6.8%

Coke just took a dump. Maybe a good trade? Expensive dollar-wise and PE wise. I didn't check the way any of these manage debt. Considering some MO and some T.

PS. I'm just tickled to death watching that damn socialist (for us) capitalist (for him) Buffet whinge on TV about coke and kraft.

Patrick says

Thanks @mell!

I do have a better than 50% gain on ATRS, and 144% on VCEL thanks to you. Up more than 10% on ATRS. Glad I bought on your advice, and may well do it again.

Thanks, on that note I owe around $35K to the IRS in federal + state taxes (thanks CA!) since the way I trade most are short term gains and are taxed as income. While I am happy that the Trump tax changes came with a larger standard deduction for singles and couples I had the additional net income investment tax slapped onto me (fuck you Obama!) with an additional $3K-$4K plus the already outrageously high federal and state income taxes. This is just one of the many reasons why I will like never again vote left/Democrat in my life again, no matter what country I am voting in. While the billionaires make out nicely all Obummer and his ilk have achieved is putting the highest tax burden onto the upper middle class to make sure there is zero vertical movement and force as many back into government dependency as possible while taxes on hard earned money goes to individual and corporate welfare assholes that add nothing to society. How can any leftoid argue that it is fair in any way or form to give away 40%+ of your hard earned income, hours of research after working your 8 hour day job and give it to freeloaders and welfare moochers, illegal immigrants, real estate scams and more? This concludes my rant, here's to Trump 2020! ;)

10 Companies That Have Raised Their Dividends for 50 Consecutive Years

There is a group of companies named the Dividend Aristocrats. Its name implies that they are more than special, and that’s because to be in that group a company has to have raised its dividend for at least 25 consecutive years. There is an even more impressive group of companies that would qualify as an aristocrat — some companies have raised their dividends for 50 or more consecutive years.

It’s important to consider what a 50-plus year streak of dividend hikes really means in a big-picture view. Not only have these companies been able to raise dividends during the Great Recession and six recessions prior to that, but they have endured dividend hikes through more than 12 presidential election cycles, endured multiple changes of the balance of powers in Congress and endured many changes in the tax code. This also means they have endured hyper-inflation, threats of deflation, oil shocks, countless armed conflicts and acts of terrorism, an exit from the gold standard, inverted yield curves and so on.

California Water Service
> Number of years: 52
> Yield: 1.5%
California Water Service Group (NYSE: CWT)

Coca-Cola
> Number of years: 57
> Yield: 3.5%
Coca-Cola Co. (NYSE: KO)

Dover
> Number of years: 63
> Yield: 2.1%
Dover Corp. (NYSE: DOV)

Emerson Electric
> Number of years: 62
> Yield: 2.8%
Emerson Electric Co. (NYSE: EMR)

Genuine Parts
> Number of years: 63
> Yield: 2.8%
Genuine Parts Co. (NYSE: GPC)

Hormel
> Number of years: 53
> Yield: 2.0%
Hormel Foods Corp. (NYSE: HRL)

Johnson & Johnson
> Number of years: 56
> Yield: 2.6%
Johnson & Johnson (NYSE: JNJ)

3M
> Number of years: 61
> Yield: 2.7%
3M Co. (NYSE: MMM)

Procter & Gamble
> Number of years: 62
> Yield: 2.8%
Procter & Gamble Co. (NYSE: PG)

Stanley Black & Decker
> Number of years: 51
> Yield: 2.0%
Stanley Black & Decker Inc. (NYSE: SWK)

https://247wallst.com/investing/2019/02/28/10-companies-that-have-raised-their-dividends-for-50-consecutive-years/2/

What do you all think about Altria as a dividend stock ?

I plan to buy some Altria on the next pull back. Even if it's a little one.

Goldman's portfolio of investors' favorite stocks is one of its best yet, returning 19% a year

The most loved stocks by both hedge funds and mutual funds are beating the market and Goldman's own portfolios tracking hedge funds and mutual funds.

"Great minds think alike," Goldman's chief U.S. equity strategist David Kostin said in the note. "The median shared favorite is expected to have higher margins and faster growth in 2019 than the median S&P 500 stock."

There are 13 stocks that are favorites by both hedge funds and mutual funds, including ServiceNow, Adobe, Paypal, Delta Air Lines, Google-parent Alphabet and Visa.
Goldman Sachs made a portfolio of the most loved stocks by both hedge funds and mutual funds, and it is crushing the market and the bank's own secret portfolios .

Two of Goldman's baskets created exclusively for its clients — one tracking hedge funds top holdings and one with large-cap mutual funds overweights — are both already beating the market this year, but the real stars are the stocks that overlap the two baskets as they have delivered years of outperformance and have a better earnings outlook than either portfolio, the bank said.

"Great minds think alike," Goldman's chief U.S. equity strategist David Kostin said in the note. "The median shared favorite is expected to have higher margins and faster growth in 2019 than the median S&P 500 stock."

here are 13 stocks that are favorites by both hedge funds and mutual funds, the most since the first quarter in 2017, according to Goldman. The similarity increased when both industries loaded back up on tech stocks during the fourth quarter and they both trimmed their exposure to health care, consumer staples and materials, Goldman said. The overlapping stocks include ServiceNow NOW , Adobe ADBE , Paypal PYPL , Delta Air Lines DAL , Google parent Alphabet GOOGL and Visa V .

The shared favorite stocks have outperformed the S&P 500 by 70 basis points in 2019 and by 16 percentage points since the start of 2018. They also have a track record of beating the market — the group has delivered an annualized return of 19 percent since 2013, higher than Goldman's hedge-fund and mutual-fund baskets and beating the S&P 500's 14 percent gain, the bank said.

The bank covers 880 hedge funds with $2.1 trillion of gross equity positions and 521 large-cap mutual funds with $2.1 trillion of equity holdings.

There has been an average of 11 stocks that are most loved by both hedge funds and mutual funds over the past five years, according to Goldman. Alphabet is the only stock that has been a favorite by both industries for 18 quarters. Stocks on average have stayed on the list of shared favorites for four consecutive quarters, Goldman said.

https://finance.yahoo.com/news/goldman-apos-portfolio-investors-apos-143524432.html

I settled on tesla for now and bought this morning.

AD says

What do you all think about Altria as a dividend stock ?

If you like a company that consistently earns money, pays, and increases dividends, Altria is your stock. I've had it for 11 years now and never sold a dime.