Stock price when the opinion was issued
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It should be considered higher risk income, but it has a long history. Management is decent. It has survived many downturns and has managed to grow. Unlock Premium - Try 5i Free
It's been a top pick of his over the years. He likes the way they structure their business, investing in diverse, established companies, mostly in the US. They pay a compelling yield, but is a volatile stock, Is less exposed than before to the vagaries of the economy, though the economy will still affect them.
The dividend is 10%, and the payout is 84% of trailing cash flow. He prefers to buy stocks that pay less than 75% of their cash flow. Earnings grew significantly last quarter, but estimated earnings decline this year and grow modestly next year. There is an extremely wide spread of earnings estimates, making valuation of the company more challenging. He thinks there are better risk-adjusted returns in other stocks. He thinks it is likely that the dividend will be maintained, but at an 84% payout ratio, there is a risk that it will not be maintained and reduction of the dividend would cause a drop in the price of the stock.