matisse capital management

Companies Raising Dividends - 2/27

    ANDE, Anderson's Inc., from $0.088 to $0.09, quarterly; yield = 1.1%; +2.3%

    AZ, Allianz, AG, from €3.50 to €4.10, annually; yield = 5.0%; +17.1%

    BLK, BlackRock, Inc., from $0.78 to $1.00, quarterly; yield = 1.8%; +28.2%

    CB, Chubb Corp., from $0.35 to $0.37, quarterly; yield = 2.9%; +5.7%

    CNL, Cleco Corp., from $0.225 to $0.25, quarterly; yield = 4.0%; +11.1%

    DCI, Donaldson Co., from $0.115 to $0.12, quarterly; yield = 1.2%; +4.3%

    FRED, Fred's Inc., from $0.03 to $0.04, quarterly; yield = 1.5%; +33.3%

    GPS, Gap Inc., from $0.085 to $0.10, quarterly; yield = 1.9%; +17.6%

    PPL, PPL Corp., $0.345 to $0.35, quarterly; yield = 4.9%; +1.5%

    SWX, Southwest Gas Corp., $0.238 to $0.25, quarterly; yield = 3.5%; +5.0%

    WR, Westar Energy, Inc., from $0.20 to $0.31, quarterly; yield = 5.8%; +55.0%

Top dividend growers of this group?  BlackRock (BLK) raised its dividend an average of 22% each of the last eight years (i.e., since it started paying a dividend), with a 400% increase overall over the same time frame.  Gap Inc. (GPS) was next, growing its dividend at an average annual rate of 17.5% over the last decade, with a 400% ten-year increase overall.

Brazil Tightens Monetary Policy

Bank reserve requirements are increased.  Brazil's central bank increased reserve requirements on term deposits from 13% to 15% on Wednesday.  This will withhold currency from the money supply, as the country is now in recovery mode and expects GDP growth of 5.5% for 2010.  In the US, the required reserve is 10% on transaction deposits and zero on time deposits.  In China, the reserves required for large banks was recently increased to 16.5%.  Details at the WSJ.

Ireland's Housing Market - a Double Dip?

It's comparable to the US.  Ireland's version of the Case-Shiller Index is the tsb/ESRI House Price Index, produced by the Irish Life & Permanent Group.  According to the tsb/ESRI, prices in the Republic of Ireland peaked in February 2007.  As of December 2009, prices are down 31.5% from the peak and are at early 2003 levels.  Prices were down 18.5% for 2009, and it appears that Ireland may be having a double-dip housing recession, like the US.  Prices declined -1.1% in September and -1.8% in October, then picked up pace for -3.1% in November and -3.6% in December.  Niall O'Grady, of Irish Life said; "2009 was a horrendous year for the Irish housing market...The figures deteriorated as the year progressed with an 8.5% reduction in average prices in quarter 4 - more that twice the pace of decline of any other quarter since the fall commenced. The pessimist will say there's worst to come." Chart, click to enlarge.

Moody's Warning on Japan's Debt

Its credit rating could be downgraded.  From the WSJ:  "Japan's credit rating could be lowered if the government fails to craft a convincing plan to get its fiscal situation under control...'The issue is if the deficits can't be reduced over the years beyond 2010, then that'd be negative,' Moody's Senior Vice President Thomas Byrne said...Japan's public-debt level is the highest among industrialized nations, at 180% of annual economic output..."  Below, Moody's rating of Japan's sovereign debt over the last decade:

The State of Spain's Housing Market

It's not as bad as the US.  The equivalent of the Case-Shiller Index in Spain is the TINSA Index.  It measures the change in home prices over time, on a percentage basis.  The base year for the index was 2001, when it was set at 1000.  Home prices in Spain peaked at the 2,273 level at the beginning of 2008, an increase of 127% from the base year, and an average annual appreciation rate of 11%.  As of February, the index is at 1,932, so home prices are down 15.0% from the 2008 peak.  And, as the chart below illustrates, while prices are still decreasing, they are doing so at a slower rate.

Companies Raising Dividends - 2/24

    HD, Home Depot, from $0.225 to $0.236, quarterly; yield = 3.0%;  +4.9%

    ITT, ITT Corp., from $0.213 to $0.25, quarterly; yield = 1.9%; +17.3%

    KMB, Kimberly-Clark, from $0.60 to $0.66, quarterly; yield = 4.4%;  +10.0%

    MO, Altria Group, Inc., from $0.34 to $0.35, quarterly; yield = 7.0%;  +2.9%

    MOCO, MOCON Inc., from $0.09 to $0.095, quarterly; yield = 3.7%;  +5.6%

    SLGN, Silgan Holdings, from $0.19 to $0.21, quarterly; yield = 1.5%;  +10.5%

    TDS, Tel. & Data Systems, from $0.108 to $0.1125, quarterly; yield = 1.4%; +4.2%

    XCO, Exco Resources, from $0.025 to $0.03, quarterly; yield = 0.6%;  +20.0%

A Downgrade for Greece's Largest Banks

From Reuters: " Fitch downgraded National Bank (NBG), Alpha Bank (ACBr.AT), EFG Eurobank (EFGr.AT) and Piraeus Bank (BOPr.AT) by one notch to BBB from BBB-plus...The outlook is negative, which typically signals the ratings may be downgraded again over the next one to two years...'(The downgrade) reflects the country's sovereign rating pressures. It's a negative development but it was more or less expected. It may affect Greek banks' funding with a potential negative implication on credit growth,' said an analyst who did not want to be named."  Disclosure: I am long NBG.

S&P's December Case-Shiller Index

15 of 20 cities showed a decline in price, before seasonal adjustments were made, in the Case-Shiller Home Price Index.  Los Angeles and Phoenix posted thier seventh month of price increases, and San Diego its eighth.  Charlotte, Seattle and Tampa posted new lows.  Without seasonal adjustments, the 10 and 20-city indices have declined 3 motnhs in a row.  After seasonal adjustments, 15 of 20 cities showed positive price gains from November to December, but very slightly.  Is the glass half full or half empty? The city data follows:

FDIC's List of Troubled Banks

From the NYT:  "...the Federal Insurance Deposit Corporation announced Tuesday that it had added 450 institutions to its list of challenged lenders in 2009 and warned that the industry was likely to remain under stress....The number of so-called problem banks rose to 702 at the end of 2009, compared to 252 at the beginning of the year. Both the number of troubled institutions and their total assets are at the highest level since 1993...The F.D.I.C. does not disclose which banks it considers at risk.

Commercial Real Estate Up, Housing Prices Down

Moody’s Commercial Property Price Index was up 4.1% in December.  According to Business Week, this was the "biggest monthly rise on record...as the number of transactions jumped...Values, which fell to a seven-year low in October, are down 29% from a year earlier and are 41% lower than the peak in October 2007...'It would be naïve and aggressive to say that we’ve seen the worst,'said Neal Elkin, president of Real Estate Analytics LLC.."  Transaction volumes reportedly rose 75% in December from the prior month.  As someone who has worked many years in commercial real estate, I know that many buyers try to push deals through before the end of the year for tax reasons, part of the reason for the volume increase.

S&P's Case-Shiller Home Price Index declined 2.5%, from last December, new figures show.  The 10-city index fell 2.4% from December last year, while the 20-city index fell 3.1%.  Both indices were down 0.3% from November to December, however, the third consecutive month of declines (excluding a seasonal adjustment). Las Vegas remains the worst market with a year-over-year price decline of 21%.  Full details at the Wall Street Journal.