At Paul’s request, I took a deep dive into dividends.
What I found was eye-opening.
Over recent years, Blacklist companies watched their dividends get slashed.
The Blacklist is a new report Paul wrote on 100 companies to sell. (If you don’t already have it, you can see how to get a copy here.)
These companies are what we call America 1.0.
They represent businesses that are in the process of being replaced by new-world America 2.0 companies.
Due to this shift, America 1.0 companies are seeing stagnating or declining sales. Simply put, their products and services are out of sync with what people want today.
Meanwhile, America 2.0 companies are taking off.
These are groundbreaking industries and technologies like: 3D printing, 5G, the Internet of Things, cryptocurrency, space travel, super materials, artificial intelligence, robot cars and trucks, renewable energy, chips and semiconductors.
Investing in companies of the future will give you the greatest potential to make soaring profits. Even collect a steady dividend.
But sometimes it’s just as important to know what NOT to buy. So today, I’m going to tell you about three companies that fall into America 1.0. And the first causality is their dividend…
Blacklist Company No. 1 — General Electric
In our Saturday Bold Profits Daily edition we warned you about a blue-chip stock that’s seen its dividend collapse.
General Electric Co. (NYSE: GE).
GE is behind the curve of technology and innovation of America 2.0.
Founded in 1892, General Electric was an iconic American conglomerate.
As one of the original 12 companies listed on the Dow Jones Industrial Average, GE was instrumental in the shaping of American commerce and trade.
From the first electric fan in 1902 to the first American jet engine in 1942, GE made its mark and completely transformed the manufacturing world.
However, since the Great Recession of 2008, when the company received a U.S. government bailout of $139 billion to stay viable, it has lost its footing.
Over the past 10 years GE has faced several headwinds from increased competition and leverage challenges. This one-two punch has weighed on the company’s free cash flow.
One company segment, GE Power, has faced pricing issues and overcapacity trials.
These challenges are reflected in its share price total return, down 62% over the past five years. This total return includes dividends:
As a member of The Blacklist, Paul sees only one destination for it: Zero.
As this chart shows, since 2017, GE’s 12-month dividend yield has collapsed 96%. It plummeted from $0.96 to $0.04. Its 12-month dividend growth rate is -84.6%:
In addition to a declining dividend growth rate, General Electric has seen its revenue fall 36% since 2010:
Blacklist Company No. 2 — DuPont de Nemours
The second company is DuPont de Nemours Inc. (NYSE: DD).
DuPont is known as a diversified technology-based materials, chemical solutions and ingredients company that is currently facing issues due to higher manufacturing costs.
Unfortunately, weak demand from the automotive market, one of its key markets, is hurting company capacities.
From fuel systems to chassis, DuPont has a notable foothold in the traditional automotive sectors.
However, in order to stay competitive, the company must innovate like never before.
Over the past three years DuPont’s share price total return, which includes dividends, is down 59.6%:
Since 2017, its 12-month dividend yield has fallen 76% from $5.52 to $1.32. Its 12-month dividend growth rate is -71%:
DuPont de Nemours has seen its revenue decline 71% since 2015:
Blacklist Company No. 3 — Kraft Heinz
You probably know Kraft Heinz from its bright orange and yellow boxed mac and cheese. The company is an American food company.
But as our nation moves toward alternative and healthy food trends, Kraft is stuck in the past, making it our third blacklist company.
Over the past three years Kraft Heinz’s share price total return, which includes dividends, is down 68.7%:
Since 2018, Kraft Heinz’s 12-month dividend yield has declined 36% from $2.50 to $1.60. Its 12-month dividend growth rate is -29.7%:
Kraft Heinz has seen its revenue decline 14% since 2014:
Invest in America 2.0 for the Dividend Producers
As you can see, America 1.0 stocks are some of the most vulnerable and in decline.
But all is not lost.
It’s time to change tactics and begin to invest in the future.
The future consists of stocks on the cutting edge of technology and demographic trends.
That’s exactly what Paul and I look for in Profits Unlimited. And with America 2.0 leading us, our subscribers are now companies that have a cumulative 12-month dividend yield of 25%.
So, here’s to the new world — the world of America 2.0 — that’s laser focused on our bright and innovative future.
To find out about the stocks to buy for America 2.0 (plus your copy of The Blacklist) click here for the full details.
Until next time,
Director of Investment Research, Banyan Hill Publishing