The coronavirus is going on and it looks like it will continue for April and May. Hopefully things will be better in the summer. In the meantime it is prudent to examine what companies provide work from home technology and are continuing to benefit from the changing work situation.

Scott Clayton works for a firm called TSI Network and used the following criteria:

US dividend payers offering well established software and services.

The TSI Dividend Sustainability Rating System:

one point for 5 years of continuous dividend payments

2 points for more than 5 years

2 points if the company raised the payment in the past 5 years

1 point for management’s commitment to dividend

1 point for operating in non-cyclical industries

1 point for limited exposure to foreign currency rates and freedom from political interference

2 points for a strong balance sheet, including manageable debt and adequate cash

2 points for a long term record of positive earnings and cash flow sufficient to cover dividend payments

1 point if the company is a leader in its industry

Company Div Sustain Points Div Share Price 1 year Mkt Cap

Rating Yield $ Tot Ret $ Bil

Microsoft Highest 10 1.4% 140.40 22.1 1,114.8

Cisco Above Average 9 3.9 37.35 -30.2 150.6

IBM Above Average 8 6.3 103.55 -26.2 94.7

Citrix Systems Above Average 7 1.1 130.5 29.2 15.6

LogMein Average 6 1.7 78.15 -5.6 3.9

Linking to dividend paying stocks, it is good to have some sort of rating system besides the company pays a dividend. There are always some companies that benefit from any crisis, the question is can they ramp up and then seemingly ramp down as the crisis ends. The key is taking your time and have reasons so if it does not work out, then you know when to exit.

There are more questions than answers, till the next time – to raising questions.

As an investor you have watched the markets go up and down, but mainly down and all stocks have gone down something for selling affect all companies. It has been a month but it is time to see if there is anything that has gone up or stabilized. In an article by Noel Randewich of Reuters there are some stocks that have stabilized and may see gains.

While the service industry has been hit very hard, there are enough people still working or receiving an income that had their sales rise.

Meal-kit delivery company Blue Apron Holdings’s stock has risen but it should be noted prior to the surge, the stock fell due to growing competition and disappointing revenue. There is great competition in the space.

Zoom Video Communications has jumped as more employees working from home use the video conferencing app.

Domino’s Pizza is hiring more people to deliver pizza.

Walmart and Amazon announced they are hiring 250,000 temporary workers as demand has surged.

At home and when we go out we need to clean – Clorox and P&G make cleaning products.

Shoppers bought the inventory from grocery stores – Kroger and others have benefited and given they are deemed essential services, they should have a good quarter.

The companies trying to find a treatment such as Gilead Sciences and Regeneron Pharma have climbed and although the President likes to shorten the testing phase, it does take time. The time is usually measured in years, at the moment it is measured in months not weeks.

Linking to dividend paying stocks, similar to all stocks they have fallen in value. However parts of the economy continue and bills still need to be paid, for example your utility bill. Spending more time at home means continuing to use electricity and the government is sending money to everyone to pay their bills. It is hard to look at your portfolio when stocks in general decline, but consider why you bought the stock and is it doing what your bought it for – do they still pay the dividend? They you can see some bargains or stocks trading at large discounts, begin to buy them and wait for the long term and you will be wealthier.

There are more questions than answers, till the next time – to raising questions.

The coronavirus effect on the stock market has been terrible, the gains of the past 3 years are gone and will take a few years to return. Unlike the President who believes the stock market will suddenly roared back to higher gains before November for him to be re-elected. One has to remember the President’s fortune is in real estate, not the stock market. Besides individuals who owned stocks, one of the greatest beneficiaries of the rise of the stock market was pension funds.

There are two types of pension funds — one could a defined benefit and the other a variable rate. The defined benefit is a pension which provides you a set amount every month for the rest of your life. Variable rates will move up and down as interest rates go up and down. Pension funds tend to have a broad mix of assets besides stocks, they own bonds, and some own real estate and infrastructure. At the end of their fiscal year, the pension plan’s liabilities are estimated by expressing those future benefits in present day dollars. The question then becomes does the pension plan on that day have enough assets to pay for the pensions in the future? With the rising stock market the answer was yes.

If you had a defined pension in one of the areas of hospitality and tourism, not only has the shares collapsed, you would be also worried about your pension. In the case of Carnival – the cruise line the decline in the stock likely is triggering the banks to look to the company to raise more money. It is possible the money is coming from the US government bailout.

In 2008, the collapse of the auto companies stocks resutled in many auto workers having reduced pensions. One other aspect for the pension plans is with almost 0 interest rates, they make little interest on their bond portfolio, fortunately most of it must be in government bonds or corporate bonds higher than BBB. This means as the economy falls, they had to sell some corporate, but they what is their return? Forced selling is painful but reduces losses and with a pension plan there will be more money to reinvest every two weeks or a month when payroll is done.

Linking to dividend paying stocks, similar to investor in dividend paying stocks pension plans are for the long term horizon. The stocks they buy are similar to dividend paying because they do the same thing – provide a steady stream of income whether the person is retired or not. As a dividend investor, you should mark on the calendar when you companies pay their dividends to ensure you can use the money or reinvest.

There are more questions than answers, till the next time – to raising questions.

In every industry there are companies which are debt free and they have greater opportunities when markets go down. We have seen stock markets loose all the value they gained while the President was in office. It is almost like people woke up from a bad dream, however being debt free and having interest rates near 0%, mean there are companies that when the coronavirus is seemingly over, they can do acquisitions. Just because there are bargains does not mean every merger will work, but if there are valid reasons mergers can work well. This means doing your homework to see which companies can be acquired and equally what companies will be doing the acquiring.

Linking to dividend paying stocks, for quality companies there are always many more opportunities than there are management abilities to acquire companies. As you examine your investments, see how disciplined they are in past acquisitions. How did it work out? where they buying for growth or to run in the same spot? is the industry growing or stabilizing? will customers pay higher prices? What is the debt load?

There are more questions than answers, till the next time – to raising questions.

When the coronavirus appeared in China, the government had the ability and did shutdown China. It was hard for the people, but for a country which has spent the last 20 years with great growth rates, the effect has very tough economically. There was good news, the pollution levels in China went down and that is a good thing. The bad thing was the economy was down, in an article by Nathan Vanderklippe of the Globe and Mail – fixed asset investment for January and February was down 24.5%; industrial production was down 13.5%; automobile output was down 46%. Retail sales was down 20.5%, new property starts was down 45%; 5 million people lost their jobs and unemployment rose to 6.2%.

China was the first country to experience the virus and is depending on exports and sales to bring things back to normal. The problem with exports is given the effects on the virus to the countries where the goods are sold, at the moment only specialized exports are needed.

Linking to dividend paying stocks, often times these companies unless they have a monopoly like situation such as utility, have diversified revenue streams. For example, P&G has 20 products which typically bring in $1 billion for each item. Will they take a hit, yes, but people still need to use the products think Tide, Crest, Olay, Pampers and the list goes on. The downturns test us to ensure personally we are reasonably diversified in our outlook. As an investor, downturns offer quality companies at a discount. If you can nibble away to buy more, because when the normalcy of the world comes back, quality stocks will tend to lead the rebound.

There are more questions than answers, till the next time – to raising questions.

As the coronavirus spreads through the US, all economic sectors are trying to figure out how the business can continue as normal as possible. In an article by Erwin Seba and Gary McWilliams of Reuter, they examined the energy industry.

The major companies Exxon, BP, Kinder Morgan, Shell all emptied their office buildings by having people work for home. The Pipeline companies which need to monitor their pipelines were working with the federal regulators to ease work rules, but still monitor the pipelines. Work at refineries, offshore rigs where people have to be in close quarters were being monitored with health checks.

On top of the virus, the other major concern is the falling price of oil and falling demand as people stay closer to home. Demand has fallen by 2.5 million barrels per day.

The refinery belt is in Houston, Texas area as well as in Lousiana, which are located in the hurricane path. Companies are used to dealing with hurricanes and have draft similar plans to deal with the virus. It is good to know most refineries can operate with half their normal staff, anything less means cuts in production.

Linking to dividend paying stocks, one of the advantages of investing in a large company is they have gone through many economic cycles and normal weather changes. The virus is different for no one knows when the end date is, but we are are hoping that measures to prevent the virus work and the affect is sooner rather than later. It is good the summer season is coming.

There are more questions than answers, till next time – to raising questions.

The cornavirus is sweeping though the economy and the first priority is your health. The second priority is to make money or not lose money. The stock markets were on a wonderful upward spiral, assets under administration (AUM) was increasingly at the individual and institutional levels and then the market went down and the economy changed. In the weeks that the US has seriously dealt with the crisis, economic activity has slowed. A great part of the economy is service and people going out to spend money – from sports to entertainment to travel, and those areas are on life support. The fall of the price of oil has not helped the economy, it helps the environment, but not directly the economy.

In an article by Tracy Rucinski and Rachit Vats all the airlines threw their 2020 forecasts into the garbage and unveiled sweeping capacity and cost-saving measures in response to fewer people in the seats. Thousands of conferences and events have been cancelled or postponed and revenue is expected to fall 70% in April and May.

Chicago based United raised $2 billion in new capital to have $8 billion and slashed 2020 expenditures by more than a third to $4.5 billion. President Scott Kirby said Hope is not an option. The company expects a loss in the first quarter and does not see a good rebound for 2 or 3 years.

Delta Air Lines saw net bookings fall 25 to 30% and could see more. Delta is cutting domestic capacity by 10 to 15% and internationally by 20 to 25%. It is freezing hiring and encouraging people to retire early.

The good news is at this time, the US airlines had strong balance sheets, lower debt than normal, and sizeable cash reserves.

American airlines had $73 billion in available capital and was eyeing cost savings.

If you live near an airport, the airport is a large driver of the economy of the area. From the planes to the airport and the people that serve the travelers, airports have been a traditional good mini economy for the cities in which they are located. A shutdown hurts many people.

Linking to dividend paying stocks, the good news is when the coronavirus is relatively over the dividends of your shares will pay for inexpensive flights. There will be plenty of low fares offerings to get people in the seats to fly again. The bad news is there will be some pain along the way. As a consumer we love bargains, with the downturn of the stock market have patience and pick up some bargains along the way. Start with the high yield dividend stocks and take your time to ensure you have peace of mind and good health along the way.

There are more questions than answers, till the next time – to raising questions.

If you think about the news of the past month, one of the stories which will come forth is people on a cruise ship being stuck off Hong Kong and San Francisco and the number of coronavirus infections doubling. The air filter systems ensure air is flowing but for a virus that will also mean the air systems enhance the problems. It was not surprising, all the cruise operators had to suspend operations. If you were taking a cruise the names Princess Cruises which is owned by Carnival, Royal Caribbean Corp, and Norwegian Cruise Line Holdings have ceased operations for the next 2 month.

In an article by Uday Sampath Kumar of Reuters, the cruise lines and all tourism operators have been hard hit by the coronavirus. Part of the solution to stop or slow down the virus is for people not to be near each other or less socializing. Governments around the world have made travel to the ports very hard by closing borders; the travel and tourism industry being very dependent on a ship docking for people to enjoy themselves on land has meant unemployment will rocket upwards, which is why the government is trying to help out.

Linking to dividend paying stocks, the cruise lines were good solid companies because they serve a need and as long as the weather is good, they are a wonderful method to go to various countries and enjoy the warm weather. It is impossible to plan for a virus, outside of having rainy day funds, because the virus changes normal life for hundreds of millions of people. As countries shut down normal operations for month or two, it is very different than one week such as when public schools shut down for a week. If you own shares in companies such as utilities, while the amount of power consumed maybe less, all those in homes where they are isolated are using more or the company is still making money. We all love capital gains, but as long as the company can pay a dividend, there is still hope in the economy.

There are more questions than answers, till the next time – to raising questions.

When analysts discuss how large companies have built in advantages, most people tend to agree, but is harder to define all the built in advantages. Sometimes the advantages have to do with logistics, the credit and cash flow of the company, in many cases quality of management, but often overlooked is the ability to affect the regulatory or legal judgement. Courts are expensive, they are time consuming, often finding methods to delay can be as good as a win, the courts are biased towards large companies. Some and all can be true, although in class action cases sometimes big companies lose.

One method to look at the regulatory advantages is to examine how prior to the civil rights era, the overwhelming advantages of the legal system was in favor of the whites. One such book is called race against time – A reporter reopens the unsolved murder cases of the civil rights era, by Jerry Mitchell, published by Simon & Schuster, NY, 2020.

Many people in the northeast, where this writer lives, we know things happen but unless you live in the area you do not necessary understand all the underlying reasons. In the southern states, slavery was the norm for a 100 years plus, and with slavery came the rationale that blacks were less than whites. It was preached at the churches, it was made institutional into all aspects of life. It was very hard to get around it, for although whites came into some contact with blacks, the thought was individuals were different than all. You might like person A or B, but not everyone. In terms of institutions, voting is when people are equal – we have a secret ballot, no one is supposed to know who you vote for, unless you tell them. To keep an equality of voting, the whites made it difficult for blacks to vote. You might read that the regulations are still being challenged in the latest elections.

When one group treats another group as less than equal, it is very easy to overlook a violent act, because one can easily rationale they had it coming. In the book, some whites shot and kill blacks who were advocating for the rights of everyone else. When the one group has all the advantages and resources of the government and another group asks for a bigger slice of the pie, it stands to reason the dominate group will tend to make things difficult. The easy way to do that is through the courts and law system because police carry guns lawfully. The police have the right to do things or also given that they are people, will also not other actions. The courts are suppose to be blind to have equal treatment before law, but when the odds are stacked against you, it is not equal treatment before the law. In the book, whites formed committees to combat giving away power and one of groups is the KKK or Klan. The Klan started as a social club but evolved into something very different, as a social club most whites were members; as it evolved to what it is now, it is composed of a minority of people. When most whites were in the Klan, that included members of the legal department. Why is a case opened? how is it treated? did investigations look for the truth or satisfy a concern? some courts give payoffs to witnesses or it was relatively easy for the court to be corrupt. If a white police officer said it was true, that it was true whether it was plausible or not – in the case involving one of the killings, the person who shot the gun, the police said he was 90 minutes away and they remembered seeing him. Further questioning of when did you see him before or what was special about that occasion? proved the officers lied.

Linking to dividend paying stocks, what is trying to be examined is large profitable companies tend to have more regulations tilted in their favor than do smaller companies. The playing field is not equal, the larger companies tend to say they do not like regulations, but actually love them because it makes the competition spend more money to compete against them. Larger companies help set the standards or how to protect the consumer while protecting themselves. It is very similar to creating a moat, it is always possible to cross the moat, but there are very few bridges and they are protected. As an investor you like see the moat, because the company can deliver consistent profitable results to pay their dividends and reinvest in the business.

There are more questions than answers, till the next time – to raising questions.