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Hello and welcome to Dividend Brief, the 2 times weekly newsletter focused on dividend investing.
Today, we will look into Merck, Salesforce, and FedEx, highlight a few dividend stocks worth watching, as well as share companies that are about to pay a dividend in the next few days.
Spotting the Next Breakout
History shows that early movers often win big. Tesla, Amazon, and Apple started as under-the-radar opportunities before taking the market by storm.
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The question is: will you recognize the next one before the crowd?
A new report highlights a company with explosive potential—one that could be your early move in a rapidly shifting market.
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Backed by in-depth research and a history of delivering results, this could be the opportunity you’ve been waiting for.
Timing is everything, and acting now could position you ahead of the curve.
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Healthcare
Merck Secures Global Rights to Experimental Weight Loss Pill in $2 Billion Deal
A new agreement with Chinese pharmaceutical company Hansoh Pharma has given a major boost to Merck's efforts in the growing obesity drug market. Under the deal, valued at up to $2 billion, Merck has secured exclusive global rights to an experimental oral weight loss pill, HS-10535. Although the drug has yet to undergo human trials, its potential to compete in the lucrative obesity market has raised expectations, with the sector anticipated to exceed $100 billion annually by the early 2030s.
The drug targets a gut hormone known as GLP-1, a mechanism also utilized by leading weight loss medications such as Novo Nordisk's Wegovy and Eli Lilly's Ozempic. The deal includes an upfront payment of $112 million, with the possibility of additional milestone payments and royalties.
This move comes as Merck seeks treatments with broader benefits beyond weight loss, focusing on potential cardiovascular and diabetes-related outcomes. The company's strategic push aligns with the wider industry race to develop more convenient alternatives to injectable treatments, as drugmakers such as Pfizer and Roche also target the booming obesity market.
This marks yet another significant step in the global exploration of GLP-1 therapies, following similar deals involving Chinese companies, as competitors like AstraZeneca have also sought out promising new developments.
MRK currently trades at $99 and pays a dividend of 81 cents per share, a yield of 3.26%.
Software
Salesforce Expands AI Sales Team to Drive Revenue Growth
Salesforce is expanding its focus on artificial intelligence by hiring 2,000 salespeople to promote its AI software to clients. This move comes as the company ramps up its efforts to boost revenue through generative AI features. A month ago, Salesforce had initially planned to hire 1,000 salespeople, but the company has now doubled that number to meet growing demand.
This recruitment push is part of Salesforce's broader strategy to integrate AI into its offerings, such as the upcoming release of its second-generation Agentforce technology. Set to launch in February 2025, Agentforce will enhance AI capabilities within Salesforce’s Slack app, enabling it to handle complex customer queries using data from across the platform.
This expansion comes just under two years after Salesforce made significant workforce cuts to adapt to changing economic conditions. The company is also seeing the impact of AI within its own operations, with its homepage now featuring an AI agent for product queries and a chat-based help page handling thousands of conversations each week. Additionally, the AI is improving customer service efficiency, with fewer issues being escalated to human agents.
Salesforce’s push into AI reflects the growing interest in AI-driven solutions across industries, positioning the company as a leader in this evolving space.
CRM currently trades at $343 and pays a dividend of 40 cents per share, a yield of 0.48%.
Transportation
FedEx Restructures Operations with Freight Division Separation
FedEx is set to make a significant shift in its business strategy with the planned separation of its less-than-truckload freight division. This move marks a step toward restructuring its operations and sharpening its focus on core delivery services. By streamlining its business model, the company aims to enhance efficiency and growth prospects.
The restructuring strategy is expected to pave the way for distinct focus areas: one centered on parcel delivery and the other on freight services. This approach positions the freight division to operate independently, allowing each segment to pursue tailored strategies and growth opportunities.
FedEx Freight, a key player in the less-than-truckload market, specializes in consolidating shipments from various customers into single trucks and optimizing delivery routes through its extensive service network. With this new chapter, FedEx is poised to unlock potential value for shareholders while enhancing its competitive edge in logistics and delivery solutions.
This separation reflects a broader trend among major companies to streamline operations and enhance market adaptability. It’s an important shift that could redefine how the company approaches its role in the evolving logistics industry.
FDX currently trades at $275 and pays a dividend of $1.38 per share, a yield of 2.0%.
Dividend Stocks Worth Watching
KMB has a massive presence in consumer essentials, from personal care to professional goods. These staple goods, along with a 3.71% yield, make this stock very appealing to investors.
STAG is a real estate investment trust focusing primarily on the industrial sector. Its 500+ facilities and an occupancy rate of 97% help fuel its 4.46% dividend yield.
CHV often turns up in our report for its presence in the oil industry. With expansion plans in the works, its 4.62% yield could climb even higher.
Dividend Increases
FCX increased its dividend payout to 15 cents per share, an increase of 100%. Its new forward yield is 4.8%.
ABCB upped its dividend payout to 20 cents per share, an increase of 33%. Its new forward yield is 1.0%.
TIMB boosted its dividend payout to 17 cents per share, an increase of 96%. Its new forward yield is 7.4%.
Dividend Decreases
FGBI decreased its dividend payout to 1 cent per share, a cut of 87%. Its new dividend yield is 2.5%.
IDT chopped its dividend payout down to 5 cents per share, a cut of 72%. Its new dividend yield is 0.42%.
MKZR reduced its dividend payout to 5 cents per share, a cut of 60%. Its new dividend yield is 4.1%.
Upcoming Dividend Payers
HOG is going to pay 17 cents per share to all shareholders of record on 12/23/24
NSP is going to pay 60 cents per share to all shareholders of record on 12/24/24
KSS is going to pay 50 cents per share to all shareholders of record on 12/24/24
That’s all for today’s edition of the Dividend Brief.
Thanks for reading, and if you have any feedback or dividend stocks you want me to take a look at, just reply to this email!
—Noah Zelvis
DividendBrief.com