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Core Insights - AT&T's shareholders are set to receive over $45 billion in dividends and stock buybacks in the coming years, reflecting strong financial performance and shareholder returns [1][5] - The company's stock price increased by more than 4% following the announcement of robust subscriber growth metrics [1] Subscriber Growth - In the fourth quarter, AT&T added 421,000 postpaid phone subscribers, 283,000 fiber subscribers, and 221,000 5G fixed wireless home internet customers, indicating strong demand for its services [2] - CEO John Stankey highlighted that investments in spectrum and fiber will enable AT&T to attract more customers across various categories and regions in the U.S. [2] Financial Performance - AT&T's revenue rose by 3.6% year over year to $33.5 billion, while adjusted free cash flow increased by 5% to $4.2 billion [4] - The company has a market capitalization of $163 billion, with a gross margin of 42.7% and a dividend yield of 4.83% [3][4] Future Cash Flow Projections - Management projects free cash flow to exceed $18 billion in 2026, $19 billion in 2027, and $21 billion in 2028, indicating a strong financial outlook [5] - The anticipated cash flow will be utilized for substantial shareholder returns through dividends and stock buybacks [5]

Core Insights - The article discusses the 15 best S&P 500 dividend stocks to consider for investment in 2026, emphasizing the stability that dividend stocks can provide during market downturns [1] Dividend and Buyback Strategy - Dan Lefkovitz from Morningstar Indexes suggests that combining dividend-paying stocks with companies that actively buy back shares can yield better returns compared to a high-dividend-only strategy [2] - An index that includes both dividends and buybacks has outperformed a high-dividend-only index over the past three years, although it still lags behind the overall US market [2] Cash Return to Shareholders - The article highlights the difference in how companies return cash to shareholders, noting that dividends are a long-term commitment while buybacks are more flexible and often increase when management perceives the stock as undervalued [3] - Large technology companies have been leading in buyback activities, while dividend payments are primarily concentrated in sectors like financials, utilities, energy, and consumer staples [3] International Dividend Yields - Income-focused investors are encouraged to look beyond the US, as domestic dividend yields have decreased to approximately 1.1%, while some European regions offer yields above 3% [4] - Caution is advised against chasing high yields, as unusually high payouts may indicate underlying business stress and potential future dividend cuts [4] Methodology for Stock Selection - The selection process for the 15 best dividend stocks involved screening S&P 500 companies with a market cap of at least $10 billion, focusing on those with stable dividends and yields around 2% as of January 21 [6] - The final list was based on popularity among hedge funds, utilizing data from Insider Monkey's Q3 2025 database [6][7] Company-Specific Insights - **Verizon Communications Inc. (NYSE:VZ)**: - Holds a dividend yield of 7.06% as of January 21, with 60 hedge fund holders [8] - Bernstein has cut its price target for Verizon to $44, citing increased competition in the telecom industry [8] - Verizon's $20 billion acquisition of Frontier Communications was approved, with commitments to expand fiber internet and wireless coverage in California [9] - **Amgen Inc. (NASDAQ:AMGN)**: - Has a dividend yield of 3.05% as of January 21, with 62 hedge fund holders [11] - Bernstein downgraded Amgen to Market Perform, indicating 2026 may be a waiting year for its product MariTide [11] - Amgen announced the acquisition of Dark Blue Therapeutics for up to $840 million, enhancing its oncology pipeline [12][13]

Greg Abel faces pressure to signal confidence with buybacks as Berkshire trades at a lower multiple. ...

Core Viewpoint - Bill Pulte criticized home builders' stock buybacks, leading to a decline in shares of D.R. Horton and Lennar [1] Company Impact - D.R. Horton and Lennar experienced a drop in their stock prices following Pulte's comments on buybacks [1]

Core Viewpoint - President Trump signed an executive order to prohibit defense companies from paying dividends or buying back stock until they improve production and delivery performance [1][3]. Group 1: Executive Order Details - The order states that defense companies are not allowed to pay dividends or buy back stock until they can produce superior products on time and within budget [1]. - Within 30 days, the Pentagon chief will identify underperforming defense contractors that have engaged in stock buybacks and will require them to submit a remediation plan within 15 days [9]. - Future defense contracts must include provisions banning stock buybacks for underperforming firms and ensure that executive compensation is linked to on-time delivery rather than short-term financial metrics [12]. Group 2: Industry Criticism and Response - The Trump administration and the Pentagon have criticized the defense industry for high costs and slow production, emphasizing the need for changes to boost military equipment production [2][5]. - Trump highlighted that while the U.S. produces the best military equipment, the production rate is insufficient to meet military needs, necessitating higher standards for defense contractors [5]. Group 3: Market Reaction - Following Trump's announcement, defense stocks experienced declines, with Lockheed Martin falling 4.8%, Northrop Grumman down 5.5%, and General Dynamics decreasing by 3.6% [8]. - RTX shares initially dropped 2% but later recovered, climbing 2.5% in after-hours trading [8].

Market Overview - President Donald Trump has decided to enforce discipline among major defense contractors, leading to increased market volatility, with the S&P 500, Dow Jones Industrial Average, and Russell 2000 all experiencing declines [3][4] - Blue-chip, banking, and industrial stocks were particularly affected by this market downturn [3] Defense Industry Insights - Trump has expressed concerns that defense contractors are not adequately maintaining weapons systems, which may impact their operational efficiency [4] - The president is considering an order to limit stock buybacks and dividends for defense firms, indicating a shift in corporate governance expectations within the industry [8] - Northrop Grumman is highlighted as a top defense stock, showing improved relative strength and nearing a key technical measure, suggesting potential for growth [6][8] Stock Performance - Defense stocks have seen a rise as Trump warns of potential intervention in Iran, indicating geopolitical factors influencing market dynamics [6] - Northrop Grumman is approaching new highs ahead of its fourth-quarter earnings report, reflecting positive investor sentiment [6]

Core Viewpoint - President Trump has criticized Raytheon, stating it is the least responsive defense contractor and prioritizes shareholder returns over military needs [1] Group 1: Company Specifics - Raytheon, now RTX Corporation, has a history of returning capital to shareholders, including a $10 billion buyback plan announced in 2023 and consistent dividend payments since 1936 [4] - Trump's comments may impact Raytheon's financial strategies, although it is uncertain how a president could legally prevent a publicly traded company from fulfilling its financial obligations [4] Group 2: Industry Context - Trump has threatened to prohibit stock buybacks and dividends for defense companies until they modernize production facilities, proposing a cap on executive pay at $5 million [3] - The defense industry has faced scrutiny from Trump, who has previously criticized other companies and their executives, indicating a pattern of using presidential influence to address corporate practices [5][6]

Core Viewpoint - The retirement of Warren Buffett as CEO of Berkshire Hathaway Inc. signifies a pivotal transition in leadership, with Greg Abel assuming the role amidst significant challenges [1][5]. Group 1: Leadership Transition - Greg Abel has taken over as CEO on the first day of the new year, succeeding Warren Buffett after a six-decade tenure [1]. - Abel's leadership will be scrutinized as he navigates the complexities of managing Berkshire's substantial cash reserves and maintaining the company's established culture [5]. Group 2: Financial Management - Abel's primary responsibility involves the allocation of Berkshire's cash reserves, which have recently exceeded $350 billion, surpassing the market values of major companies like Home Depot, Procter & Gamble, and General Electric [2]. - The company has not engaged in share repurchases for the last five quarters and has only paid a dividend once under Buffett's leadership, indicating a historical reluctance to distribute cash [3]. - There is speculation that Abel may consider a one-time special dividend as a potential strategy to utilize the cash reserves effectively [4]. Group 3: Operational Challenges - Abel will oversee Berkshire's subsidiaries, including Geico, and manage a stock portfolio valued at approximately $300 billion, which will require significant allocation decisions [4]. - Maintaining the culture of trust, honesty, patience, discipline, and long-term thinking is essential for Abel as he manages relationships with subsidiary management teams [5]. Group 4: Market Impact - The decisions made by Abel will be closely monitored by investors, as they could have a substantial impact on Berkshire's stock performance moving forward [6].

Core Viewpoint - O'Reilly Automotive is a leading player in the aftermarket auto parts industry, demonstrating strong historical performance despite not being at the forefront of technological innovation or rapid growth [1]. Financial Performance - In 2025, O'Reilly shares increased by 15.4%, slightly below the S&P 500's 16.4% return [2]. - The company has achieved a compound annual growth rate of net income of 11.9% from 2014 to 2024, indicating consistent profitability [8]. - Earnings per share are projected to grow by 8.8% in 2025 and 11.4% in 2026, reflecting ongoing financial strength [11]. Market Position and Strategy - O'Reilly is set to report its 33rd consecutive year of positive same-store sales growth in 2025, showcasing its resilience in various economic conditions [6]. - The company plans to open 200 to 210 net new locations by the end of 2025, with a target of 230 new locations in 2026, capitalizing on the fragmented nature of the industry [7]. - O'Reilly does not pay dividends but has been actively repurchasing shares, spending $1.6 billion on buybacks in the first nine months of 2025, and reducing the diluted outstanding share count by 44% over the last decade [9][10]. Valuation and Market Sentiment - Since late 2020, O'Reilly shares have appreciated by 201%, significantly outperforming the S&P 500, although this has been aided by a 56% increase in the price-to-earnings (P/E) ratio, which currently stands at 31.7 [12]. - While earnings growth is expected to continue, market sentiment can significantly influence investor returns, as valuation changes may overshadow profit growth [13].