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Election showdown in Georgia

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Locator map of Georgia

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Welcome back. In Tbilisi, which I visited this month, the political mood is ominously tense and polarised. Georgia’s October 26 parliamentary elections are set to be the most consequential for the mountainous south Caucasus country since it emerged in 1991 as an independent state out of the ashes of the Soviet Union.

At first sight, it seems that Georgia faces two possible futures: creeping authoritarianism and alignment with Russia if the ruling Georgian Dream party stays in power, or democracy and a pro-European path if the opposition wins and takes office. However, this black-and-white picture oversimplifies what is an altogether more complicated story. I’m at tony.barber@ft.com.

What is at stake

Since the Kremlin’s full-scale invasion of Ukraine in February 2022, Georgia has turned into a battleground with two fronts: between Georgian Dream and its opponents, and between each side’s respective Russian and western backers.

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The levels of political polarisation in Tbilisi are so extreme that, in this election campaign, there hasn’t been a single case of government and opposition representatives debating each other on television, radio or other media. Mutual trust is non-existent.

The opposition has painful memories of the fate of the first independent Georgian state of modern times. This led a precarious existence from 1918 to 1921 before being absorbed into the Soviet Union.

Now the opposition fears that, if Georgian Dream retains power, the nation could fall completely under Russian influence and lose its precious but fragile democracy and civic freedoms.

Locator map of Georgia

For the west, such an outcome would be a blow to its interests and credibility. The US and its European allies support Georgia’s independence. The EU has even made the country a candidate for membership, though the process is on hold because of the Georgian Dream government’s democratic backsliding and increasingly pro-Russian sympathies.

Russia’s role in Georgia

For its part, Moscow continues to think of Georgia as part of a rightful sphere of influence in the post-Soviet borderlands that separate Russia from the west. “The Russians have never left Georgia, even mentally,” says one western observer in Tbilisi.

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In a short war in 2008, Russia took de facto control of two Georgian regions, Abkhazia and South Ossetia, where it keeps around 10,000 troops and FSB security service personnel. South Ossetia is scarcely an hour’s drive from Tbilisi.

Bidzina Ivanishvili
Bidzina Ivanishvili, founder of the Georgian Dream party, at a rally in support of the government’s ‘foreign agent’ law, which it adopted in May this year. Supporters of Georgian democracy fear that its implementation will bring the country closer to Russia © AP

There are no signs of imminent Russian military intervention in Georgia. Still, it is unimaginable that the Kremlin would passively accept an election result that brought a pro-western government to power in Tbilisi.

In this article for the Washington-based Center for a New American Security, Nicholas Lokker and Andrea Kendall-Taylor write:

Georgia now arguably has its most pro-Russian government since its independence in 1991 and, in many cases, [Georgian Dream] is following the Putin playbook in its attempt to weaken Georgia’s democracy. Moscow’s primary goal is to ensure the stability of these pro-Russian forces — in particular, GD founder and de facto leader Bidzina Ivanishvili.

Breakdowns in democracy

However, to portray the election as a straightforward contest between tyranny and freedom, or Russia and the west, is to overlook key features of Georgia’s political trajectory over the past three decades.

In this commentary for the Stockholm Centre for Eastern European Studies, Markus Greisz hits the nail on the head. He identifies three long-term issues that have plagued Georgia since independence:

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One issue is the deep political and societal polarisation; another is the tendency of all Georgian governments to turn authoritarian.

A third issue is the seemingly paradoxical simultaneous popular support for both the EU and Georgian Dream, which frustrates western leaders and calls into question whether Georgians actually understand what EU membership would entail.

Since 1991, all governments that started out as protectors of national independence and political freedom have lurched into deeply flawed forms of strongman rule, tainted by corruption and abuse of the rule of law.

This was true of Zviad Gamsakhurdia, Georgia’s first postcommunist president; Eduard Shevardnadze, once admired in the west as Mikhail Gorbachev’s far-sighted Soviet foreign minister; Mikheil Saakashvili, a reformer turned autocrat; and now Ivanishvili.

Weaknesses of the opposition

The legacy of the Saakashvili era is a serious problem for Georgia’s four main opposition parties, as set out in this thread on X by Bidzina Lebanidze, a political scientist.

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Both Georgian Dream and the opposition are “detached from the majority of the population, who feel alienated from [the] political process”, Lebanidze writes.

“During their rule, Saakashvili and [his party] alienated a critical mass of the electorate who refuse to vote for them ever again.”

A similar argument appears in this commentary by Beka Chedia for the Center for European Policy Analysis:

The opposition, in addition to fragmentation, has a problem of identification and identity. Voters find it difficult to be clear which small party is part of which alliance and what their promises to voters are.

In Tbilisi, one non-partisan election-watcher told me: “It’s not sufficient to frame the election as a contest between pro-western and pro-Russian forces. In the regions, outside the capital, voters seem to think it’s a kind of Saakashvili vs Ivanishvili contest.

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“In other words, the image of Georgian politics as an arena for strongmen persists.”

Slim chance of a free election

Public opinion polls for Georgia’s election need to be treated with caution. However, according to one independent expert, Georgian Dream’s private polling indicates it would struggle to win more than 40 per cent of the vote.

The point is, though, that under the system of proportional representation used for this election, Georgian Dream could win just over half the seats in parliament even with 37 to 38 per cent of the vote.

It would help the ruling party if one or more of the opposition parties failed to surpass the 5 per cent threshold required to win seats in the legislature.

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Given Georgian Dream’s influence over the nation’s election commissions, control of the judiciary, vote-buying and intimidation of opposition activists, it is all too easy to see how the party could manipulate the election to secure victory.

Shota Gvineria, a former Georgian ambassador and national security specialist, says:

The regime has systematically used state resources to influence voters by offering benefits such as pardons, early release from prison and amnesty [for fines] in exchange for electoral support …

By placing loyalists in the Central Election Commission and district commissions, manipulating voter lists and tampering with ballots, these tactics have severely undermined the integrity of Georgia’s democratic processes and elections.

Possible outcomes

The list of possible election outcomes ranges from good to nightmarishly bad.

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Least likely is a Polish scenario. A year ago, an illiberal, conservative nationalist government in Warsaw lost elections to an opposition led by former premier Donald Tusk. Despite some difficulties, Tusk and his allies were able to take office peacefully.

Such an outcome strikes me as improbable in Georgia. The ruling party shows no inclination to give up power, controls almost all levers of state authority and has the means to fix the election.

Georgian President Salome Zurabishvili meets Polish President Andrzej Duda
Georgian President Salome Zurabishvili meets Polish President Andrzej Duda at the Presidential Palace in Warsaw, Poland, October 1 2024 © Piotr Nowak/EPA-EFE/Shutterstock

At the opposite end of the spectrum is a Belarusian scenario. In 2020, mass protests broke out after Alexander Lukashenko, the dictator in Minsk, claimed victory in what were blatantly fraudulent presidential elections.

Lukashenko’s regime cracked down on the demonstrators, and Belarus today is as deprived of freedom as Vladimir Putin’s Russia.

A third possibility is a Serbian scenario. Elections in Serbia routinely produce victories for President Aleksandar Vučić and his ruling party. They aren’t completely free and fair, but Vučić receives little more than a rap on the knuckles from the west, which perceives some value in maintaining a working relationship with Serbia.

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Risk of instability or violence

If Georgian Dream wins the election fraudulently, or loses but refuses to concede defeat, anti-government street protests are likely. The history of postcommunist Georgia offers some clues to what then might or might not transpire.

In 2003, public anger at corruption and a fixed election triggered demonstrations that toppled Shevardnadze, Georgia’s then president.

Former Georgian President Eduard Shevardnadze
Former Georgian President Eduard Shevardnadze appealing to the public on TV from his office in Tbilisi in November 2003, ahead of a planned mass opposition protest that called for his resignation © Reuters

By stepping down, Shevardnadze ensured the Rose Revolution, as these events came to be known, was mostly peaceful. Could the same thing happen after October 26? I am doubtful. By temperament and motivation (he is a reclusive billionaire who made his fortune in Russia), Ivanishvili is quite different to Shevardnadze. The Kremlin openly supports him.

Ideally, the US and European governments would step in and play a mediating role in the event of a contested election result and power struggle. They did this during Ukraine’s 2014 Maidan revolution.

But Ukraine’s new government and its western friends paid a heavy price for that change of power — Russia’s annexation of Crimea and fomentation of separatist rebellions in Donbas, followed by the 2022 invasion.

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The future of Georgia is very much in the balance.

More on this topic

Georgia’s Anaklia deep seaport project may open new routes, but at what cost? An analysis by Tymon Pastucha and Wojciech Wojtasiewicz for the Polish Institute of International Affairs

Tony’s picks of the week

  • Israel’s war in Lebanon may be longer and more grinding than the limited operation that was initially announced, the FT’s James Shotter, Neri Zilber and Andrew England report

  • In his newly published memoirs, Robert Bourgi, a French-Lebanese wheeler-dealer, has spilled the beans about how he helped leaders of former French colonies in Africa to subsidise presidential election candidates in France, the BBC’s Hugh Schofield reports

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P&O owner to attend summit despite row over Louise Haigh’s comments

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P&O owner to attend summit despite row over Louise Haigh's comments

P&O Ferries owner, DP World, will now attend the UK’s investment summit on Monday, despite a row over a minister’s criticism of the firm.

It had been feared they might pull out from the summit – where they were expected to announce a £1bn investment – after Transport Secretary Louise Haigh criticised the ferry firm and urged consumers to boycott the company.

An expansion of the firm’s London Gateway port, in Essex, is likely to go ahead, with an announcement expected by some in the coming days.

Whitehall sources said on Saturday that there had been “warm engagement” between senior figures in the firm and the government since Sir Keir Starmer distanced himself from his minister’s remarks.

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The government is hosting the International Investment Summit, where it hopes to attract billions of pounds of investment.

A Downing Street spokesperson said the summit would “show Britain is open for business” as it looks to enable economic growth.

Speaking to the BBC’s Newcast on Friday, Sir Keir said Haigh’s comments were “not the view of the government”.

The prime minister is understood not to have been directly involved in talks with DP World, nor has he personally spoken to Haigh about her remarks.

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DP World has said the expansion of the London Gateway port would bring Thurrock hundreds of jobs.

The row started after Haigh described P&O as a “rogue operator” in an interview with ITV on Wednesday, after it sacked nearly 800 seafarers in 2022 and replaced them with cheaper workers.

Asked whether she used the ferry service, she said: “I’ve been boycotting P&O Ferries for two-and-a-half years and I would encourage consumers to do the same.”

DP World insisted the move was needed for the survival of the ferry operator and to secure thousands of jobs.

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Haigh’s comments in the interview coincided with the Department for Transport announcing new legislation aimed at protecting seafarers from what it described as “rogue employers”.

In that announcement, Deputy Prime Minister Angela Rayner was quoted calling P&O Ferries’ prior actions “outrageous”.

But senior government figures previously told the BBC that they were incensed by the suggestion that consumers boycott the ferry firm.

Haigh’s comments also attracted criticism from the Conservatives, with shadow business secretary Kevin Hollinrake arguing Labour “don’t understand business”.

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However, the Labour chair of the House of Commons Business and Trade Committee, Liam Byrne, defended Haigh.

She had been “absolutely right to say that the behaviour of P&O, owned by DP World, in the past has been completely unacceptable”, he said.

The row has exposed a tension between the new government’s desire to attract business and strengthen workers’ rights.

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Buying Medical Properties Trust Taught Me a Costly Lesson

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Motley Fool


Medical Properties Trust (NYSE: MPW) is my largest investment in a single real estate investment trust (REIT). I built that position up over a decade and a half by steadily buying more shares of the healthcare REIT. The main draw was its high-yielding dividend.

That investment paid off for a long time. However, the healthcare REIT has come under tremendous pressure in recent years due to an issue I completely overlooked: tenant concentration. Medical Properties Trust leased a significant percentage of its hospital portfolio to two tenants, which cost the company and its shareholders dearly when it ran into financial troubles. That taught me to pay much closer attention to customer concentration and quality when investing in any company.

Not diversified enough

Medical Properties Trust is one of the largest owners of hospital real estate in the world. It owns several hundred facilities leased to many different hospital operators. However, two tenants comprised a meaningful percentage of its total assets and revenues for many years. For example, at the end of 2022, the REIT’s rent roll consisted of:

Operator

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Properties

Percentage of Total Assets

Percentage of Revenues

Steward Health Care

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41

24.2%

26.1%

Circle Health

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36

10.5%

11.9%

Prospect Medical Holdings

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14

7.5%

11.5%

Priory Group

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32

6.6%

5.3%

Springstone

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19

5%

5.8%

50 Operators

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302

38%

39.4%

Other investments

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0

8.2%

0%

Total

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444

100%

100%

Data source: Medical Properties Trust.

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While the REIT had over 50 tenants, five supplied more than 60% of its revenue. That became an issue as Steward Health Care and Prospect Medical Holdings ran into financial troubles.

Those issues led the REIT to work with these large tenants to help them navigate their financial problems. For example, in May 2023, Medical Properties Trust reconstituted its $1.6 billion investment in properties leased to Prospect Medical Holdings in a series of transactions. It converted some leases into an equity interest in that company’s managed care business. Meanwhile, it temporarily suspended rents in California, with partial repayments resuming last September and full rent commencing this past March.

Medical Properties Trust also tried to keep Steward afloat by providing financial assistance and temporarily reducing its rent. However, those efforts weren’t enough, and Steward filed for bankruptcy earlier this year. The REIT was finally able to sever its relationship with Steward last month, which enabled it to find new tenants for many of the properties it formerly leased to that company.

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The REIT’s issues with two of its largest tenants weighed heavily on its stock price (shares are down nearly 80% from their peak a few years ago). It has had to sell properties leased to financially stronger tenants to repay maturing debt. It also cut its dividend twice.

Lessons learned

The biggest lesson I’ve learned from investing in Medical Properties Trust is to carefully consider customer concentration and quality when investing. The higher the concentration of a single customer, the greater the risk that the client’s issues will become a problem for that investment. Likewise, if a company has a high concentration of financially weaker clients, that could also impact my investment in the future.

Medical Properties Trust has learned this lesson the hard way. That’s led it to focus on diversifying its tenant base by bringing in higher-quality tenants. For example, it agreed to lease its entire Utah hospital portfolio to CommonSpirit Health last year after the healthcare company acquired Steward’s operations at those facilities. CommonSpirit has strong investment-grade credit, which enhances its ability to meet its financial obligations. Securing such a high-quality tenant for those facilities enabled the REIT to sell a majority interest in the real estate to another investor to raise additional cash. Meanwhile, it recently agreed to replace Steward at 15 other properties with four high-quality operators as part of its bankruptcy settlement with Steward.

As a result of that agreement, the REIT has achieved the objectives it laid out in its second-quarter earnings conference call. CFO Steve Hamner stated, “Looking through the calendar to 2025 and into 2026, our expectation is that we will have a stable portfolio of hospital real estate leased to key operators in their respective markets with no exposure to Steward.” With that goal achieved, the REIT can focus on rebuilding its portfolio by adding new properties leased to high-quality operators to continue diversifying its tenant base. That should also enable it to rebuild its dividend.

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It’s important to dig a little deeper

I didn’t pay enough attention to Medical Properties Trust’s tenant concentration as I built my position, which proved costly. However, I learned a valuable lesson: Analyze a company’s client base and quality because that could have a meaningful impact on its future results. Medical Properties Trust learned that costly lesson as well. With its tenant quality improving and its rent roll more diversified, it’s in a much better position to deliver the stable income and growth I initially expected as I built my position. That’s why I plan to continue holding, believing it can eventually make a full recovery.

Should you invest $1,000 in Medical Properties Trust right now?

Before you buy stock in Medical Properties Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medical Properties Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $826,130!*

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Matt DiLallo has positions in Medical Properties Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Buying Medical Properties Trust Taught Me a Costly Lesson was originally published by The Motley Fool



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UK food safety watchdog to probe lead levels near abandoned mines

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The UK’s independent food safety watchdog will investigate lead levels in food produced near abandoned lead mines after the impact of the toxic metal on human health was highlighted by a Financial Times investigation.

The UK has 6,630 abandoned lead mines that continue to disperse the metal into the environment each year. Lead can accumulate in waterways and soil before being consumed by animals and entering the food chain. 

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In a letter seen by the Financial Times, Professor Alan Boobis, chair of the Committee on Toxicity of Chemicals in Food, Consumer Products and the Environment, told Conservative MP Julian Smith that the Food Standards Agency would conduct a risk assessment.

The FSA’s review of “dietary lead as part of its risk analysis programme” would take “into account hotspots where exposure is likely to be higher, including the specific concern regarding old lead mines”, said Boobis, whose independent group advises the FSA and the Department of Health and Social Care.

Consumed by humans, lead has a devastating impact on almost every organ in the body, with any level of exposure capable of having a harmful effect, according to the World Health Organization.

Yet the UK’s Veterinary Medicines Directorate, an agency of the environment department, tests just between 400 and 450 samples of meat, milk, fish and honey for the presence of lead and other heavy metals each year. Experts say testing such a small number of food items offers an insufficient assessment.

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This year Boobis said he “agreed with the conclusion” of an FT investigation that found the scale of lead toxicity present in farm animals reared for human consumption was unknown, and said ministers should assess the scale of lead contamination “from farm to plate” in the food chain.

Scientists and farmers rearing animals for human consumption have previously said the FSA should be concerned about people living near old lead mine sites, and who might be growing their own vegetables and eating locally produced eggs. 

Last year a study funded by the Welsh government identified potentially harmful levels of lead in eggs produced on two small farms downstream from abandoned lead mines in west Wales.

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A young child eating one or two of the eggs per day “could become cognitively impaired”, according to the research. Small-scale studies of vegetables grown on the farms indicated they too contained “elevated, and potentially toxic, concentrations” of lead, according to the full study.

Boobis added in his letter to Smith: “Lead is an issue that cuts across a number of government departments, so it will be important to ensure an integrated assessment.”

Smith, whose constituency of Skipton and Ripon in North Yorkshire has an estimated 412 old lead mines, said: “Lead risk needs a root-and-branch assessment and the FSA should deliver nothing less.”

Mark Willis, head of chemical contaminants at the FSA, said the agency kept “all contaminants in food under review as part of its rolling programme of risk analysis work”.

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“The outcome of a future review of lead will inform any advice to ministers on whether changes to legislation are recommended,” he added.

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Neighbours fume over ‘eyesore’ derelict estate as last-man standing locals refuse to leave so block can be flattened

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Neighbours fume over 'eyesore' derelict estate as last-man standing locals refuse to leave so block can be flattened

NEIGHBOURS are fuming over an “eyesore” derelict estate – with one defiant local refusing to leave so the block can be flattened.

The block in Swanscombe, Kent has been boarded up and earmarked for demolition after the local council ruled out pricey repairs.

The boarded-up flats in Swanscombe

3

The boarded-up flats in SwanscombeCredit: KMG
Locals say the block is a magnet for fly-tippers

3

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Locals say the block is a magnet for fly-tippersCredit: KMG
Most residents have moved out of the derelict estate

3

Most residents have moved out of the derelict estateCredit: KMG

Flats in the building had been dogged by damp, weak foundations and cracked windows and ceilings.

The council gave tenants a one-off payment of £7,800 as compensation for moving out.

Most of them took the money and left – but one resident is staying put.

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Demolition plans were confirmed last week but have been postponed because of the last man standing.

Neighbours Miranda Richards told the Kent Messenger: “When I walk past it from my car late at night, it is scary.

“I don’t like walking past a derelict building. There used to be trees there to mask the flats but they have come down.”

Another neighbour said: “It’s an eyesore. There is always fly-tipping there.”

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Ward councillor Emma Ben Moussa said: “The uncertainty for the residents around the area has been quite unfair.

“They have been left like that for a while now. Whatever decision is going to be made I would like it to be made quite quickly.

“They should know what is happening as they have been left in limbo.”

Dartford Council said: “The council is currently considering future options for the use of the site.”

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A spokesperson added: “We await the final residents to vacate the block.

“Once the block is vacant, a proposal with recommendations will be made to the council’s cabinet.”

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Low-cost airline launches first-ever flights from regional UK airport as full plane with 174 passengers takes off

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The connecting city is famous for its Viking history

A LOW cost airline has launched its first-ever flight from a regional UK airport with 174 passengers on board.

The airline will provide direct flights from a UK airport to a popular European capital.

The connecting city is famous for its Viking history

2

The connecting city is famous for its Viking historyCredit: Getty
The first-ever flight got a water salute from airport firefighters

2

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The first-ever flight got a water salute from airport firefighters

Customers flying on its North American connections can even visit two countries in one trip as stop overs are free in this major city.

It has been announced that for the first time ever, Wales and Iceland will be connected by a direct flight.

Customers on board PLAY Airlines can fly from Reykjavik, Iceland, to Cardiff, Wales, up to twice per week.

This will enable the people of Wales to explore the glorious blue lagoons and Viking history of Iceland.

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Or, enable the people of Iceland to explore Wales and its stunning beaches, mountains and castles.

The first-ever flight took off just a day before Wales’ football game in Iceland – with 174 passengers on board.

Customers were treated to Icelandic sweets before take off such as Aurora Borealis cake, candy stripes, and chocolate liquorice.

Plus a water salute from Cardiff Airport firefighters.

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Lee Smith, Cardiff Wales Airport’s Head of Business Development, said: “It’s a pleasure to welcome PLAY Airlines to Wales today.

“This exciting service allows customers to enjoy direct flights between Wales and Iceland for the first time.

Discover the Magic of North Iceland

“PLAY’s Icelandic hub in Reykjavík also allows for people in Wales to take advantage of PLAY’s free stopovers in Iceland, before jetting off to five key cities in North America.

“We look forward to working with the team at PLAY to continue growing in Wales.”

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Flight costs from Cardiff to Reykjavik in October start from as little as £55, per person for a round trip.

The trip time one way takes about three hours.

And there is still availability to fly out in October.

Customers using PLAY Airlines from Cardiff also have the option of visiting five other major cities abroad.

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Such as New York, Washington, Boston and Baltimore in the USA.

Or Toronto in Canada.

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3 Dividend Stocks That Reward You Through Thick and Thin

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This year, some notable companies have cut or eliminated their dividends. For example, former stalwarts Walgreens and 3M ended decades-long streaks of dividend growth with deep cuts to their payouts. It’s a situation that can make some investors want to give up altogether on income investing.

However, while some formerly reliable companies have disappointed investors on the dividend front in recent years, others have continued to make their payments no matter what. Enterprise Products Partners (NYSE: EPD), Oneok (NYSE: OKE), and NextEra Energy (NYSE: NEE) stand out to a few Fool.com contributors for their dividend stability. Here’s why you should consider adding them to your portfolio.

Enterprise Products Partners is built to pay you well

Reuben Gregg Brewer (Enterprise Products Partners): For 26 consecutive years, midstream energy giant Enterprise Products Partners has increased its distributions. That’s a huge commitment to its unitholders, but there’s more for income investors to like here than just the distribution history. It all starts with its master limited partnership structure, which is designed to pass income on to investors in a tax-advantaged manner. (A portion of the distribution is usually return of capital.) So down to its foundation, Enterprise is about paying its investors well.

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Then, factor in its business model. Enterprise owns energy infrastructure like pipelines, storage, refining, and transportation assets that are vital to the energy sector’s operation. However, unlike other segments of the industry, the midstream segment is largely fee driven. Enterprise generates reliable cash flows based on the use of its assets, so the often-volatile prices of oil and natural gas don’t really have that big an impact on its financial results. Demand for energy, which is usually strong even when oil prices are weak, is the key determinant of Enterprise’s success.

ET Financial Debt to EBITDA (TTM) Chart

ET Financial Debt to EBITDA (TTM) Chart

Then there’s the fact that Enterprise has an investment-grade rated balance sheet. Moreover, its leverage is normally toward the low end of its peer group, so it is conservative on both an absolute and relative basis. Lastly, the partnership’s distributable cash flow covers its distribution 1.7 times over.

All in all, a lot would have to go wrong before Enterprise Products Partners would need to cut its distribution. It is far more likely that it will continue to grow those disbursements, albeit slowly, as its capital investment plans pan out. But slow and steady distribution growth combined with a huge 7% yield will probably sound like music to most dividend investors’ ears.

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Over a quarter century of growth and stability (and more growth coming down the pipeline)

Matt DiLallo (Oneok): Pipeline giant Oneok has proven its dividend durability over the decades. It has achieved more than a quarter century of dividend stability. While it hasn’t increased its payment every year during that period, it has a strong track record on payout hikes. Since 2013, Oneok has produced peer-leading total dividend growth of more than 150%. That’s impressive, considering that the world experienced two notable periods of oil price volatility during that period.

Oneoke has delivered sustainable earnings growth over the years. Its portfolio of pipelines and related midstream infrastructure generates predictable fees backed by long-term contracts and government-regulated rate structures. Its earnings grow as the volumes flowing through that infrastructure increase due to production growth, organic expansion projects, and acquisitions.

The company has been on an acquisition-fueled expansion binge in recent years. Last year, it bought Magellan Midstream Partners in a transformational $18.8 billion deal that increased its diversification and cash flow. The highly accretive deal will add an average of more than 20% to its free cash flow per share through 2027. That supports management’s view that Oneok will be able to grow its dividend by 3% to 4% annually during that period while also repurchasing shares and reducing its leverage ratio.

Oneok followed that up with a $5.9 billion deal to buy Medallion Midstream and a meaningful interest in EnLink Midstream this August. The transaction will be immediately accretive to its free cash flow and capital allocation strategy. After closing that deal, Oneok plans to buy the rest of EnLink, further boosting its cash flow per share. The company also expects to complete additional organic expansion projects, further enhancing its growth rate.

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The midstream giant’s investments will help fuel its dividend growth for the next several years, even if there’s another market downturn. Those features make Oneok a great stock to buy for those seeking reliable dividends.

A steady dividend grower

Neha Chamaria (NextEra Energy): NextEra Energy, which has a yield of 2.6% at its current stock price, has rewarded its shareholders through thick and thin, and management is determined to continue doing so. The utility and clean energy giant has paid regular dividends for decades, but more importantly, increased them steadily over time. Between 2003 and 2023, the compound annual growth rate (CAGR) of NextEra Energy’s dividend was nearly 10%, backed by a 9% CAGR in its adjusted earnings per share (EPS) and an 8% CAGR in operating cash flow during the period.

NextEra Energy operates two businesses — Florida Power & Light Company (the largest electric utility in Florida) and clean energy company NextEra Energy Resources (the world’s largest generator of wind and solar energy). So while its regulated utility business generates stable cash flows, clean energy is where its growth largely comes from.

NextEra Energy expects its adjusted EPS to grow at an annualized rate of 6% to 8% through 2027, and expects annual dividend hikes of around 10% through 2026 as it pumps billions of dollars into both businesses.

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More specifically, NextEra Energy plans to spend over $34 billion on Florida Power & Light between 2024 and 2027 and more than $65 billion on renewable energy over the next four years. That’s massive, and if done right, should steadily boost NextEra Energy’s earnings and cash flows to support bigger dividends for years, regardless of how the economy fares.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,022!*

  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,329!*

  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $393,839!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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See 3 “Double Down” stocks »

*Stock Advisor returns as of October 7, 2024

Matt DiLallo has positions in 3M, Enterprise Products Partners, and NextEra Energy. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has positions in 3M. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends 3M, Enterprise Products Partners, and Oneok. The Motley Fool has a disclosure policy.

Don’t Give Up on Dividends: 3 Dividend Stocks That Reward You Through Thick and Thin was originally published by The Motley Fool

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