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The Daily Dow LEXINGTON, Ky. (June 19): Today was a rare day for the Foolish Four model portfolio -- one with plenty of company-specific news, so let's jump in with both feet.
Chevron announced today that its Canadian joint venture with Finnish company Neste Oy (Alberta Envirofuels Inc.) will be expanding in order to increase output by roughly 45% of the gasoline additive Methyl Tertiary Butyl Ether (MTBE). Sounds like something we concocted in high-school chemistry class, completely by accident, of course.
Chevron also announced that it is proceeding with its $750 million "Genesis" project to develop a new oil and gas field in the Gulf of Mexico. This commitment to "deep water" exploration is a key to Chevron's future plans in the region. "Chevron has long been one of the largest producers in the gulf's mature areas, keeping oil and gas flowing from older fields while also developing new resources," said Bob Herrin, a Chevron U.S.A. Production Co. vice president in charge of Gulf of Mexico operations.
The spin-off of 3M's data storage and imaging systems businesses has been formally approved. Shareholders of record at the close of business on June 28 will receive one share of Imation Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE:IMN)") else Response.Write("(NYSE:IMN)") end if %> for every ten shares of 3M stock they hold. 3M said that the distribution of Imation Corp. stock to 3M shareholders completes an important element of a strategic initiative announced last November. As part of this initiative, 3M also plans to discontinue its audiotape and videotape business.
3M also raised its quarterly dividend from 47 cents a share to 49 cents, effective with the third-quarter dividend. 3M has raised its dividend for 38 consecutive years now and hasn't missed a quarterly payment for 320 quarters. Don't tell me these companies aren't keenly aware of the role dividends play for value investors.
Given that the spin-off will lower the stock price of MMM and the company appears to be boosting the dividend amount post-spin-off, MMM looks to be firmly ensconced in the High-Yield top ten for a while.
For those of you wondering what to do with the Imation shares, the standard method using the Dow Approach is to hold them until your annual update, then sell them in order to use that money for the new list of Dow stocks. If MMM remains on the list for the next year, you may have to buy more shares to weight the position equally because of the spin-off's effect on the price.
And finally, Paine Webber analyst Paul Raman began coverage of 14 chemical companies. Dow and Foolish Four component DuPont was given a Neutral rating by Raman.
Transmitted: 6/19/96
Today's Dow Numbers THE FOOLISH FOUR MODEL (6/19/96) |
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