Roger
Business Owner, Former Assistant Research Professor
Whirlpool will find it nearly impossible to succeed until tariffs are lifted, as slowing appliance spending meets its shift to US manufacturing and sales. Once the good cheap brand, it closed international plants after tariffs hit, and its prices are now unrealistic, matched to LG's. Fitch sees it as too leveraged at around BB-, and share sales will soon be needed; it may be a trade, but with far too many dangers. x.comÂ
Whirlpool's cash crunch is now severe enough that it is suspending its dividend until further notice, per the WSJ, after paying through 10 US recessions and every crisis since the 1950s. Its chart has formed a secular death cross for the first time in decades, a break from past recessions. x.comÂ
Whirlpool is a high-yield stock to avoid, alongside Walgreens Boots Alliance, because its payout ratio showed the dividend risk in advance. Management described recession-level demand, cash flow turned negative, the payout ratio hit 120% and the dividend was cut. Walgreens was worse, cutting its dividend 48% in early 2024 to 25 cents a share after a 47-year record. x.comÂ
Whirlpool trades as if the economy were in a depression like 1929 or 2008, at about 14 times earnings, despite very good product quality. On the technical side it is weekly oversold, shows a weekly bullish divergence and sits further below its 200-week average than ever. It is a hold until at least 2031. x.comÂ
US consumer discretionary stocks may bounce, but a likely economic downturn next year means any rally is unlikely to last. Given the issues facing the consumer and where the economy is in the cycle, the consumer is not where the focus should be, though there is no specific downside target. x.com x.comÂ
Big money is rotating out of overextended chips and AI plays, leaving semiconductor stocks that went straight up as exit liquidity for retail still piling in. The money is moving into software such as Accenture, Salesforce and ServiceNow, energy names Hawaiian Electric and Southern Company, and boring dividend stocks Whirlpool, Target and UPS. It is also flowing into China: Alibaba, JD.com, PDD, Baidu and Chinese internet stocks. x.com x.comÂ
