In this podcast, Motley Fool analysts Anthony Schiavone, Karl Thiel, and Tim Beyers discuss:

• Merk's $9.2 billion acquisition of Cidara Therapeutics.
• Earnings news from UPS and Chevron.
• Other investing tidbits.

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A full transcript is below.

This podcast was recorded on Nov.15, 2025.

Tim Beyers: What are the opportunities outside the world of AI you're listening Motley Fool Money. Welcome Fools. I'm your host, Tim Byers, and with me are longtime Fools, Karl Thiel and first time Monday pot guest Anthony Schiavone. At how you feeling? Fellas we doing we doing well? Fully caffeinated, I hope.

Anthony Schiavone: Fully caffeinated, Tim.

Karl Thiel: Feeling good.

Tim Beyers: Excellent. This is good. Today we're talking about non-AI stocks. Seriously, we are being serious about this. Non-AI stocks, did you even know that there was such a thing as non AI stocks? We'll be digging into reports from four stocks, really three stocks that we don't often talk about and give a buy seller hold rating on each as we do. Let's get into it, starting with Karl, this close to $10 billion deal. I'm rounding up, but it's not quite 10 billion, but a $10 billion deal between Sadara, that is Ticker CDTX, and Merck, the pharmaceutical giant MRK. What's going on here? This is a strategic purchase. I assume here, it's a lot of money. What are we getting here?

Karl Thiel: This is a good old fashioned product/platform deal in the sector. What Sadara does is they're making a most directly what Merck is buying right now is a influenza drug that is not really it shouldn't be subject to year to year variation. It's a different way of going after influenza, and you can see why that would be a relatively big deal. There's a lot of flu shots given out every year.

Tim Beyers: Seems timely.

Karl Thiel: I think it's interesting on a number of levels. I mean, one is just that, usually MNA in the pharma sector is just dominated by oncology, and it still is. But we've seen a lot more start going to these broader health issues around obesity and around, in this case, infectious disease, so influenza. The other reason I think it's super interesting is just that it came at a huge premium. I'll say, $9.2 billion all cash deal, 109% premium to where Sadara was trading before that. I just think that gets at the continuing, I think, some mispricing in the sector. I mean, you expect an M&A deal to come at some premium, but that's a pretty big one.

Tim Beyers: One of the things I saw here, Karl, so again, $221.50 in cash, that is more than double the prior closing price. Huge premium here. I want to ask whether or not that is a premium that Merck feels it must pay in order to get an active drug that fills a pipeline because one of the things I saw in the notes and bear in mind, I rely on you for 100% of my insights as it relates to pharmaceuticals and biotech. But there is apparently a patent cliff upcoming for Merck in the form of a blockbuster cancer drug called Keytruda. Does this help fill the gap, and is that the reason the premium is so big?

Karl Thiel: Yes, it helps fill the gap. The Keytruda Patten Cliff is a major, major deal for Merck, and it's no mystery to anybody who invests in the stock. Is it the reason the premium is so big? Not necessarily. I actually don't think that Merck is paying an outrageous amount for the company, given that this could be not only a broader drug. This was initially looked at as something that's just for very high risk influenza. Patients, FDA has actually come back and given them the green light to make it slightly potentially a slightly broader drug. Then you could turn around and use this same platform and plug it into other infectious disease agents like fungal disease and things like that. I don't think they're paying an outrageous amount, actually. It's a little different than, say, another $10 billion deal that just closed last week, which is Pfizer Met Sarah, where I think they paid a huge premium.

Tim Beyers: Then let me get your take on this, then, and then we're going to keep moving. Buy, sell or hold Merck on the basis of this deal. Is this one that you expect to see compounding value at Merck or where are you at?

Karl Thiel: I think I'm OK. I think I'm going to buy on Merck, just because I think Merck is attractively priced relative to the rest of the market as to whether this deal comes out a winner. I mean, obviously, that depends on a lot of things. But the data has looked good for this approach. I'm, modestly bullish on this. It is possible that this specific deal will end up being a disappointment, but I still think it's not unreasonable move by Merck looking to shore things up.

Tim Beyers: Fair enough. Let's move on, Ant. We're going to move on to some earnings, starting with UPS. Apparently, people want to be delivering packages again. Talk to me about what we saw from the UPS earnings report.

Anthony Schiavone: Tim, I think it's fair to say that UPS is firmly in a turnaround. But this quarter, I think investors finally receive some hope that this turnaround is in the early stages of turning. Revenue declined nearly 4% year of a year, and admittedly, that does not sound great. But to put some context around that, the decline was primarily driven by the planned decrease in Amazon package volume that it delivers, as well as some business divestitures. Just looking at UPS's domestic business in the US, and I think this is really interesting, revenue declined nearly 3%, but volumes declined by 12%. That tells me that UPS is shedding lower margin, Amazon, commerce volume and instead focusing on higher margin volumes in healthcare, business to business, and international markets. The result of that is that the revenue per piece, which is a key metric that they track grew 10%, and that's the fastest growth rate they've had in three years. Their domestic operating margin actually expanded slightly, even though the volumes fell 12%. I think that's a really good sign that management's better, not bigger strategy is progressing. On the expense side, with the glide down of those Amazon volumes, UPS expects to reduce expenses by 3.5 billion this year. With that lower volume, UPS needs fewer trailers, they need fewer trucks, fewer aircraft, doesn't need as many buildings. Unfortunately, it also means they need fewer employees, too. But all these decisions are aimed toward becoming a smaller, more efficient UPS. I really think this quarter was a big step in the right direction for the company.

Tim Beyers: This does seem to be a real play on, forget about growth, focus on profitability. Are we at the beginning of a surge in profitability for UPS? Do you think is that too bold a statement, or is it are we on the beginnings at the beginnings of a real profitability improvement at this company?

Anthony Schiavone: I was hoping the beginning the profitability improvement would have occurred like two years ago because this plan has been in place for a while now, and there's been a lot of volatility around UPS's quarterly earnings with their labor contract tariffs and all of that. There's a lot of noise in their quarterly results, but this does seem to be that first step toward eventually improving free cash flow, improving operating margins, and improving return on invested capital and just becoming more efficient.

Tim Byers: I like all of those things. But let's move on to Chevron. That was up slightly on earnings, so Ticker CVX here. This is a very big company, and up about 1.5% for the week. What did the results look like here and do we like them? Where are you at on this one?

Anthony Schiavone: As a shareholder, I liked them. I thought it was a strong quarter for Chevron, despite lower commodity prices. Production of 4.1 million barrels of oil equivalent per day was a record quarter for the company and 21% higher than last year. Adjusted free cash flow came in at seven billion, and Chevron returned 6 billion to shareholders in the quarter through dividends and buybacks. I thought this was pretty cool. Chevron mentioned that they have returned 78 billion through dividends and buybacks over just the last three years. That's a massive amount of capital relative to what is roughly a $300 billion company today. I think that's really the thesis for traditional energy companies. Whereas in the past, oil and gas companies just wanted to drill and produce as much as possible. Now they're much more focused on returns on capital and returns of capital through dividends and buybacks.

Anthony Schiavone: Chevron's really been at the forefront of the industry shift in capital allocation. That standpoint.

Tim Beyers: I want to make sure I got this right, so $300 billion company. Did you say 78 billion returned? Is that three years?

Anthony Schiavone: Three years.

Tim Beyers: Over 20 billion a year, really over 25 billion a year, so roughly 25% of its market value returned in terms of cash used for repurchases and dividends.

Anthony Schiavone: Yeah, and I think that should continue, too. They actually just held their Analyst Day I think last week, and they plan to return, I believe the number is $10-20 billion annually through 2030. That is. They're still returning a lot of cash to shareholders, even as commodity prices have come down.

Tim Beyers: That's extraordinary. Fair enough. Let's get your buy sell on hold on each of these, Ant quickly. On UPS, a more profitable UPS are you buying this?

Anthony Schiavone: I am buying it. If you look at a dividend yield. It's about 7% today. Now, that dividend payout is not currently covered by free cash flow, but I do think it's sustainable, considering the balance sheet and the investments it's making today to support that higher free cash flow in the future. I think that 7% dividend yield alone might be enough to beat the market over, like a 5-10 year period, considering where market valuations are today. I think it's a buy.

Tim Beyers: How about Chevron? Same question, buy sell or hold.

Anthony Schiavone: Also going with the buy. Roughly 4.3% dividend yield today, management expects to grow free cash flow at a 10% annual rate through 2030. That represents a double digit expected return over the next five years, and I think that beats the market.

Tim Beyers: Fair enough. There you go. There is your non-AI stocks overview. Up next, we're going to do a variation on our faker or breaker game. We're going to give it a little dividend twist. We're calling it back it or bid in. You're listening to Motley Fool Money.

Fools, it's time for back it or bid it and apologies for the name change here, but we wanted to try something a little bit different. We're going to go with a dividend bent here. The companies, three companies that haven't necessarily been let's say, very aggressive in raising their dividends over the past few years. I want your takes. You back it or bid to increase the dividend in 2026. We're going to start with Wabtec, which is the former Westinghouse Air Brakes Technology Corporation. This is essentially making equipment systems, maybe some digital software for rail transportation, including freight rail transit rail. They've been around for quite some time. They make train control systems. Ant let me start with you here. I'll give you some stats. For 2025, they are forecasting 6.6% revenue growth. This is definitely a free cash flow generator. They have been converting a huge amount of their operating cash as free cash flow. They have a free cash flow margin of well over 12% here, but they only have a dividend payout ratio of 12%. Why is this dividend not higher? Do you expect it to go up in 2026? Back or bid it, what do you say?

Anthony Schiavone: I'm going to back it. You mentioned that dividend payout ratio is only about 12%. That's at the low end of management's targeted payout ratio of about 10%-15%. They have a stated goal to increase dividends. That dividend growth rate is accelerating over the last two years, so I think a dividend increase this year or even next year is probable.

Tim Beyers: Ticker WAB, that is Wabtec, so we back it for some dividend growth here. Carl, I'm going to go to you on stock that you own. We're talking toys, Hasbro. By the way, I had forgotten. Did you know this that Hasbro is the home of Plato? I didn't know that. I mean, I knew they were the home of monopoly and D&D. I didn't know they were the home of Plato.

Karl Thiel: No, Plato's been a thing for a long time.

Tim Beyers: The total revenue up 7% for the first nine months of 2025. They have a significant free cash flow margin, 75% of free cash flow is what they dedicate to the dividend today. Where are you at, Carl here, 75% of free cash flow for the dividend is that's not a small amount. Do you back it or bid it to grow that dividend for you as a shareholder?

Karl Thiel: I'm going to say bid it for 2026. I hope they don't honestly increase the dividend, and this company they already pay something like a 3.6% yield. It's not a terrible yield on this stock, and they've got a number of challenges. I think if you just think of a company that's making things going into the consumer market, a lot of them are manufactured in China, you can fill in the blanks on what some of the challenges might be. They've got a fair bit of debt. They've been focused on that. They're in a multi year turnaround plan and doing OK. I do think that they're starting to come up out of it, so I think they're doing reasonably well. I don't think this is a bad time to come to investors and say, look, the capital, we don't need to increase the dividend, right now. We've got better uses for the capital.

Tim Beyers: Fair enough. Ant, let's come to you on our final one, Hasbro's Ticker HAS. This one is pretty simple ticker, CF Industries Ticker CF. Talking about fertilizer here. Ant, this is fertilizer. Hydrogen and nitrogen. This is a big supplier to the agricultural sector. A lot of ammonia based, ammonium nitrate, fertilizer and so forth. This is an interesting company. They generate a huge amount of free cash flow. For the trailing 12 months, free cash flow, according to Alpha sense was 1.7 billion. That's through September 30th. Payout ratio on the dividend is pretty low. It is averaged between 24% and 35%. For a company that doesn't generate, I mean, they generate decent revenue growth. They generate a ton of cash. Do you back CF to increase the dividend to raise that payout ratio, or is it bid it? What do you say?

Anthony Schiavone: I think this is a company that has the ability to raise its dividend and probably will looking over like a five plus year time horizon. But will it increase it in 2026? I'm not so sure. Management seems to prefer share buybacks right now. They did just increase the dividend considerably in 2022 and 2023. I think looking at 2026, I think a dividend increase is largely going to depend on commodity prices and trying to predict what commodity prices are going to do in a one year window is pretty difficult. I think I'm going to bid it with CF Industries.

Tim Beyers: Fair enough. Bidding it. There are your there's your three stocks, dividend growth over the next year. Wabtec, Ant says back it, Hasbro, Carl's has bid it and CF Industries, Ants has bid it. If you want dividend growth, the Old Westinghouse Airbrake Technologies Corporation, that's your one to go with maybe. We can't give you personalized advice on this popcast sorry. Up next, we're going to preview tomorrow. Looks like a Chinese stock showdown. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money for Tuesday's show. Emily will have on Jason Hall and Toby Bordelon and they're doing some role changes here. Jason is going to play host for a Chinese stock showdown between Emily and Toby, and they're going to be covering a few names. I'm going to let them tell you what names they're going to be looking at, but a few different Chinese stocks, four of them in particular. Look for Emily Flippen, Jason Hall and Toby Bordelon for tomorrow's Motley Fool Money, for a Chinese stock Showdown.

As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy your sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it is not approved by advertisers, advertisements or sponsored content provided for informational purposes only. See our full advertising disclosure. Please check out our show notes. Thanks so much for being here for both Carl Teal and Anthony Schiavone. Our engineer is Dan Boyd and our producer, Anand Chokkavelu. Thank you for listening to Motley Fool Money. I am your host, Tim Byers. We'll see you again tomorrow. Fool on, everyone.