The tech sector currently offers an abundance of charts that should capture the attention of those inclined to technical analysis. In fact, 10 stocks in the large- and mid-cap range are on the verge of breaking past resistance and moving out to new highs.
While this process may be delayed by broader market weakness in the days and weeks ahead, this group of stocks is bound to provide its share of winners in due time — especially if the Select Sector SPDR Technology ETF (NYSE:XLK) continues to make new highs. A handful of these are stocks that we’ve highlighted in past articles and that have not yet broken out. But they continue to print compelling formations and are, therefore, worthy of ongoing attention.
Here’s the list of stocks to watch, along with the key levels to track and the chart for each:
10 Tech Stocks Poised to Break Out to invest in 2012 – eBay (NASDAQ:EBAY)
Friday’s close: $33.03
Breakout level: $34 (trendline)
Percent move needed for breakout: 2.9%
10 Tech Stocks Poised to Break Out to invest in 2012 – Priceline.com (NASDAQ:PCLN)
Friday’s close: $545.04
Breakout level: $548 (trendline)
Percent move needed for breakout: 0.5%
10 Tech Stocks Poised to Break Out to invest in 2012 – ASML Holding (NASDAQ:ASML)
Friday’s close: $45.25
Breakout level: $45.92 (52-week high)
Percent move needed for breakout: 1.5%
10 Tech Stocks Poised to Break Out to invest in 2012 – Motorola Solutions (NYSE:MSI)
Friday’s close: $47.35
Breakout level: $48.05 (52-week high)
Percent move needed for breakout: 1.5%
10 Tech Stocks Poised to Break Out to invest in 2012 – Amdocs (NYSE:DOX)
Friday’s close: $30.35
Breakout level: $31.80 (trendline)
Percent move needed for breakout: 4.8%
10 Tech Stocks Poised to Break Out to invest in 2012 – TIBCO Software (NASDAQ:TIBX)
Friday’s close: $27.89
Breakout level: $31.45 (52-week high)
Percent move needed for breakout: 12.8%
Plantronics (NYSE:PLT)
Friday’s close: $37.40
Breakout level: $39.52 (52-week high)
Percent move needed for breakout: 5.7%
10 Tech Stocks Poised to Break Out to invest in 2012 – EZchip Semiconductor (NASDAQ:EZCH)
Friday’s close: $37.06
Breakout level: $37.85 (52-week high)
Percent move needed for breakout: 2.1%
Lattice Semiconductor (NASDAQ:LSCC)
Friday’s close: $6.81
Breakout level: $7.12 (trendline)
Percent move needed for breakout: 4.6%
Micros Systems (NASDAQ:MCRS)
Friday’s close: $51.68
Breakout level: $53.36
Percent move needed for breakout: 3.3%
And for extra credit, also take a moment to look at the charts of Check Point Software Technologies (NASDAQ:CHKP), which is 7.5% away from breaking out; Maxim Integrated Products (NASDAQ:MXIM), 4.6%; Insight Enterprises (NASDAQ:NSIT), 6%; ARM Holdings (NASDAQ:ARMH), 19.7%; and SXC Health Solutions (NASDAQ:SXCI), 8%.
Dividend stocks were in focus big-time in 2011. Some of the top performers included utilities and tobacco companies with reliable dividends and impressive yields.
But the market has taken a decidedly different tone after the best January for the market since 1997. It seems that growth and technology are again in focus, and many investors are moving away from dividend stocks and into more “growthy” sectors. As a result, those old income favorites of 2011 have been held back this year. The broad-based Select Sector Utilities SPDR (NYSE:XLU) ETF is in the red year-to-date, as is tobacco giant Altria (NYSE:MO).
So can you rely on dividends in 2012, or should you go for growth with your IRA or brokerage account? Well, there’s certainly something to be said for looking beyond sleepy blue chips with reliable dividends — but even the most aggressive investor needs to keep a firm foundation for their retirement portfolio. You might want to get more selective with your income-oriented plays this year, but you certainly don’t want to abandon dividends altogether in your IRA or brokerage account.
To help you identify the cream of the crop, here are the top 10 Dow dividend stocks worth a look for your holdings:
Top 10 Dow Dividend Stocks to Invest in 2012 #10: Kraft and Chevron (Tie)
There is a bit of a crowd when you look at the No. 10 spot on this list, and considering that dividend yields change daily based on share price, it seems best to just call it a tie between packaged foods giant Kraft (NYSE:KFT) and big oil company Chevron (NYSE:CVX). Chevron technically is the winner with a yield of 3.09% vs. 3.01% for Kraft, but that’s just based on today’s pricing.
Both companies are rock-solid. Kraft is up about 23% in the past 12 months, well over four times the roughly 5% returned by the Dow Jones Industrial Average, and its plans to split into two separate companies — a global snack foods corporation and a North American grocery company — has been warmly received thus far. There is no firm date for the split, but it should happen in the next year or so.
As for Chevron, the stock is up strongly in the past six months as oil has surged from around $77 per barrel in October to more than $100 currently. Geopolitical unrest, including Iran sanctions, and general inflationary pressures are to blame. As we all know, expensive oil means bigger profits for Chevron, so expect momentum to continue as long as crude moves higher.
Lastly, it’s also worth noting that JPMorgan Chase (NYSE:JPM) and Microsoft (NASDAQ:MSFT) aren’t far behind, with yields of about 2.7% as of this writing, so a big move for either company could boost the yield to make it No. 10 on this list.
Top 10 Dow Dividend Stocks to Invest in 2012#9: Intel
Current Dividend Yield: 3.2%
Performance So Far in 2012: +10%
Tech stocks aren’t exactly a bastion of big dividends. But mature semiconductor stock Intel (NASDAQ:INTC) actually has been paying dividends since 1992, and has made big strides increasing its dividends during the past few years.
You also might think INTC stock isn’t doing so well right now, considering the rise of tablets using other processors (read: iPad) and continued troubles with consumer and business confidence. Wrong on that count, too. The chipmaker has posted big gains in 2011 thanks to impressive baseline demand for high-tech items. After all, it’s not like computers are becoming less common because of the downturn — if anything, they are more crucial than ever before to boost productivity as businesses delay hiring.
Intel saw revenue leap 24% from fiscal 2010 to fiscal 2011, while profits jumped 17% year-over-year. No wonder it can pay juicier dividends.
Top 10 Dow Dividend Stocks to Invest in 2012#8: DuPont
Current Dividend Yield: 3.2%
Performance So Far in 2012: +12%
E.I. du Pont de Nemours & Company (NYSE:DD), a.k.a. DuPont, lagged the market in 2011 with a -8% decline. However, it has more than made up for that loss with a surge of 12% right out of the gate in 2012 — easily double the broader market’s gains.
Dividend investors in it for the long term know the staying power of DuPont. The company has paid dividends for more than 100 years, and is a stable industrial giant that isn’t going anywhere. In fact, DuPont could be a good long-term investment for the inevitable recovery — because even if there is a tough market for another year or two, DuPont will hang tough and pay a good dividend while you wait. As a specialty chemicals company, DD provides materials for a host of products in all corners of the market. Once demand picks up, so will DD stock.
Top 10 Dow Dividend Stocks to Invest in 2012#7: Procter & Gamble
Current Dividend Yield: 3.3%
Performance So Far in 2012: -4%
Procter & Gamble (NYSE:PG) is a good example of a high-yielding dividend stock that has fallen out of favor for “growthier” plays in 2012. The consumer products giant has relied on the power of P&G brands like Gillette, Pampers and Duracell to provide reliable revenue across rough economic times — and thus reliable dividend payments to shareholders. However, the flip side of stability in PG is that revenue and profits haven’t been growing at a breakneck pace.
Will Procter & Gamble stock continue to decline? Maybe, but not for long. The bottom line is that it is the brains behind some of the biggest brands in America. If you’re looking for a growth investment, then PG will never pass muster — but the company has paid dividends since 1891 and offers a very nice yield of 3.3%. That’s nothing to sniff at.
Top 10 Dow Dividend Stocks to Invest in 2012#6: Johnson & Johnson
Current Dividend Yield: 3.5%
Performance So Far in 2012: -2%
The first health care stock on the list of top 10 Dow dividend stocks is Johnson & Johnson (NYSE:JNJ) — but a few more are yet to come. The company is part-pharmaceutical giant thanks to prescription drug offerings like vaccines, and part-consumer health company thanks to products like Band-Aid and Tylenol.
Revenue admittedly has been a bit stagnant at J&J during the past few years; however, earnings per share continue to improve. And if you believe projections, Johnson & Johnson could see a stunning 48% jump in earnings per share for fiscal 2012 compared with fiscal 2011. Throw in the fact that unlike other big pharma stocks, Johnson & Johnson is a diversified company with plenty of consumer offerings that will avoid painful patent expirations, and you have another plus.
The recession-proof nature of the health care sector, coupled with the aging baby boomer population driving up demand for medications, make J&J even more compelling. Throw in the 3.5% yield, and you have a decent long-term play.
Top 10 Dow Dividend Stocks to Invest in 2012#5: General Electric
Current Dividend Yield: 3.6%
Performance So Far in 2012: +5%
General Electric (NYSE:GE) might forever be tarnished in the minds of some dividend investors after slashing its payout by two-thirds during the financial crisis. While the quarterly dividend remains about half of what it was — at just 17 cents vs. 31 before the market meltdown — the subsequent flop in GE stock and recent moves to increase payouts have managed to result in a very respectable yield of 3.6%.
GE admittedly has its near-term troubles, as evidenced by recent General Electric earnings. But that doesn’t seem to be deterring investors, who have bid it up nicely so far in 2012. That’s because while the stock might be seeing some headwinds, it has some long-term potential as its banking arm continues to improve and as its energy and infrastructure segment continues to grow.
GE isn’t going to return to pre-Lehman valuations anytime soon. But it’s definitely stable and on the mend — paying a healthy dividend all the while, too.
Top 10 Dow Dividend Stocks to Invest in 2012#4: Pfizer
Current Dividend Yield: 4.2%
Performance So Far in 2012: -3%
Pfizer (NYSE:PFE) outperformed the market nicely in 2011 with one of the best returns in the entire Dow Jones — 23% in returns, to be precise. But like so many high-fliers with high yield, Pfizer has hit a speed bump in 2012 as shares have lagged the strong rally on the rest of Wall Street.
Part of that is more than just sector rotation, too. Pfizer faces the same challenge that persists across all of Big Pharma — looming patent expirations, challenges from generic medications and the frantic race to lock up patients in emerging markets.
But the company has a decent research pipeline with some up-and-coming drugs that could rotate in to prop up revenues. Most importantly for dividend investors, the company has $29 billion in cash as of its last earnings report. With a forward P/E of about 9 right now even after the red-hot run of 2011, there might be more upside for Pfizer in 2012.
And if the stock lags? Well, that 4.2% dividend is a nice sweetener to hedge your bets.
Top 10 Dow Dividend Stocks to Invest in 2012#3: Merck
Current Dividend Yield: 4.4%
Performance So Far in 2012: +1%
Merck (NYSE:MRK) is very similar to Pfizer in many ways. Though it didn’t have quite as impressive a 2011, it edged up nicely. And though it’s not in the red in 2012, it assuredly has been left behind. It, too, faces patent expirations and is hoping its pipeline will step up to fill the void.
On the plus side? It, too, is trading for a bargain P/E of under 10. It, too, pays a dividend well north of 4%.
There obviously is not breakneck growth in pharmaceuticals, but the continued roll-in of the $41 billion Schering-Plough buyout from a few years ago will surely provide new opportunities for Merck. At the very least, it ensures the company won’t fade away.
Throw in solid cash flow and a history of dividends since 1935, and you can understand why this stable company is a bedrock buy for many portfolios.
Top 10 Dow Dividend Stocks to Invest in 2012#2: Verizon
Current Dividend Yield: 5.3%
Performance So Far in 2012: -6%
Verizon (NYSE:VZ) remains the leading wireless telecom provider in the U.S. by subscriptions, thanks to the failed AT&T and T-Mobile merger. The company also is one of the top high-speed Internet providers in America via its FiOS fiber optic network. As the world becomes increasingly wired, it’s more important than ever before for companies like Verizon to be involved with the operations of businesses and the lives of regular Americans.
This provides a very stable revenue stream that accounts for huge dividends. What’s more, Verizon’s EPS for fiscal 2012 are on track to tally over $2.40 — almost triple the 85 cents per share earned in fiscal 2011. Four straight quarters of year-over-year revenue increases also are a good sign for this telecom stock.
Throw in the 5.3% dividend yield for Verizon, and you have plenty of reason to stick around for the long term, too.
Top 10 Dow Dividend Stocks to Invest in 2012#1: AT&T
Current Dividend Yield: 5.9%
Performance So Far in 2012: -1%
One of the biggest stories in 2011 was that AT&T (NYSE:T) tried to leapfrog rival Verizon in the wireless market via a buyout of T-Mobile. But regulators ran interference, and AT&T abandoned its bid. Don’t think that means the biggest dividend payer in the Dow Jones Industrial Average should be cut loose from your portfolio, though. With a dividend yield of about 5.9%, this is a heck of an income play.
What’s more, AT&T actually pulls in more annual revenue than Verizon — $126 billion, to be precise — and has an even more impressive EPS forecast for fiscal 2012. A prediction of $2.46 per share vs. 66 cents per share in fiscal 2011 gives AT&T the potential for 270% earnings growth!
That’s not to say that trajectory is sustainable, and that AT&T is in any way a growth stock. But if you’re looking for a big dividend payer whose balance sheet is moving in the right direction, AT&T is worth dialing in.
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For many companies, earnings reports aren’t just a regular demonstration of their fiscal ability — they’re a turning point for stock prices. Earnings, revenues, forecasts and other information in reports can send stocks through the roof or plow them into the ground.
Here’s three companies that recently made huge gains following earnings reports:
3 Stocks Making Huge Leaps After Strong Earnings Reports to invest in 2012 – Cerner
Cerner (NASDAQ:CERN) jumped 13% Wednesday after reporting better-than-expected results Tuesday after the bell — giving good guidance for 2012.
Revenues of $615.6 million were up 23% from a year ago, and profits jumped 30% on bookings of $899 million — an all-time high for the health information technology company. CERN continues to benefit not only from the health care industry’s transition to digital records, but also the increasing need to measure outcomes in the practice of medicine. Adjusted earnings for the quarter were 55 cents — up 25% from a year ago and 2 cents better than expectations.
Guidance for 2012 was solid, with revenues expected to be $2.4 billion to $2.5 billion, and earnings in the range of $2.20 to 2.30 per share. Both estimates were roughly in line with existing expectations, but like others who bought the stock in droves on Wednesday, I look for the stock to continue to moving up for a couple of key reasons.
First, system sales were very strong — up 34% in the fourth quarter — which will eventually translate into higher maintenance and service revenues, which carry very high margins. — a “razor and blades” model. Secondly, the 44% increase in bookings represents a healthy book-to-bill ratio of 1.46, which means the company brought in nearly 50% more orders in the quarter than it collected payments for. With 35% of bookings outside existing customers of its Millennium software, CERN believes it is gaining market share. Order backlog ended the year at $6.11 billion — up a strong 24% from a year ago.
Shares of Cerner had lagged the January rally, but this latest earnings report has put the stock back on a nice trajectory, and I like where both it and the company are headed.
3 Stocks Making Huge Leaps After Strong Earnings Reports to invest in 2012 – Novo Nordisk
Novo Nordisk (NYSE:NVO) is the world leader in diabetes care, an attribute that drove profits 19% higher in the fourth quarter. The Danish pharma company continued to grow its diabetes franchise on strong sales of key drugs Victoza, NovoRapid and Levemir. Shares jumped 3% last Friday following the earnings report, and momentum this week has added another 7.5%.
Revenues for the quarter were up 11% in local currencies to 66.3 billion kroner ($11.7 billion), with gross profit up 9% to 53.7 billion kroner. Operating margins expanded on the higher sales volume, and net income increased 19% to 17.1 billion kroner. On a per share basis, the company earned approximately $5.29.
Much of Novo Nordisk’s growth is being driven by Victoza, a therapy for type-2 diabetes and one of NVO’s newer products. Sales jumped 166% to nearly 6 billion kroner in 2011. Also strong was the company’s portfolio of “modern insulins,” where sales increased 8% to 28.8 billion kroner. While not growing quite as fast as the diabetes franchise, the company’s biopharmaceutical products did rise 8%.
Looking ahead to 2012, management is forecasting revenue growth of 7% to 11% and operating profit growth of 10%. This would enable earnings of close to $6 per share, an increase of nearly 13%. Longer-term, the company feels it can add another 100 basis points to the operating margin and increase operating profits close to 15% per year as Victoza continues to grow.
Novo Nordisk is operating well right now, and pharmaceutical stocks are in favor right now. I want you to hang on to your NVO shares a little while longer. I am raising my target to $140, which is a reasonable 23 times 2012 earnings in U.S. dollars.
3 Stocks Making Huge Leaps After Strong Earnings Reports to invest in 2012 – Cummins
Cummins (NYSE:CMI) reported its fifth straight quarter of double-digit growth last Thursday. Both earnings and revenue surpassed expectations as strength was seen across most segments.
Fourth-quarter earnings of $2.56 a share easily beat estimates of $2.23, and revenues of $4.9 billion just topped estimates of $4.7 billion. The 19% revenue rise was led by the engine segment, with sales up 23% to $3.1 billion. Cummins continues to benefit from strong North American demand for diesel truck engines of all classes, as well as growth in demand for natural gas-powered engines. In addition, sales of engines for mining equipment are up on a global basis. The components business, which sells engine parts to other manufacturers, saw sales increase 19% to $1.1 billion. North American demand was at record levels, aided by the need to meet emission standards. Europe, India and Brazil were also strong markets, offsetting weakness in China.
As expected, power generation was a laggard, with sales up only 2% to $920 million. However, this was still better than expected, and orders picked up as the quarter progressed. Distribution sales were up 19% to $834 million on similar market forces.
The company projected 20% growth for 2012, which is robust, with 9% coming from acquisitions. Growth will be loaded toward the back end of the year as truck markets in Brazil strengthen. CMI is also anticipating China and emerging markets will improve in the second half. Management guided for operating margins of 12.5% to 13.5% — up from 11.8% in 2011. At the same time, the company plans to continue heavy spending in R&D, including the possibility of expanding their offerings of natural gas engines as more fleets make the switch. This initiative comes out of the Cummins-Westport Innovations (WPRT) joint venture.
This was a great quarter for CMI, and the stock has the wind at its back in the markets right now.
If you’re an income investor in search of strong, stable dividend yields, there’s a lot to love about electric utilities. And sector stalwarts such as Consolidated Edison (NYSE:ED), Exelon (NYSE:EXC), CenterPoint Energy (NYSE:CNP), 5 Ex-Dividend Stocks to Love to buy This Week in 2012 – Progress Energy (NYSE:PGN) and Duke Energy (NYSE:DUK) are offering a sort of gift-with-purchase deal right now — ex-dividend dates during Valentine’s Week.
Ex-dividend dates are important for investors because they determine whether you or the stock’s seller receives the most recently declared dividend. Let’s say a stock has an ex-dividend date of Valentine’s Day. If you buy that stock and settle on Feb. 14 or later, you don’t receive the declared dividend — the seller does. But if you buy that stock on Feb. 13, the declared dividend is paid to you.
When purchasing stocks in a high-growth sector, the dividend is almost an afterthought.(After all, when brokers talk about five-year EPS growth projections of 20% to 25%, the dividend, if any, could be shaky.) But utility stocks have found a place in income investors’ portfolios because of their stability, sustainability, and high dividend yields.
These stocks are not flashy — in fact, the yields of many electric utilities are downright frumpy compared to the vaunted returns heralded by the hottest emerging-market and tech stocks. And don’t forget, while utility stocks went wild in a still-sluggish economy last year, 2112’s early optimism has sent investors fleeing the sector in droves in search of more action and bigger returns.
But the electric utility niche has its own action — particularly in the area of mergers and acquisitions. While 2012 likely will not usher in a new wave of tie-ups among regional giants such as last year’s engagement announcement between Exelon and Constellation Energy (NYSE:CEG), acquisition opportunities remain, particularly among smaller providers such as Wisconsin Energy (NYSE:WEC) or NV Energy (NYSE:NVE).
Here are five high-yield electric utility stocks that provide a nice little gift with purchase during Valentine’s Week:
5 Ex-Dividend Stocks to Love to buy This Week in 2012 – Consolidated Edison
Con Ed wholesales electric power and provides electric service to New York and parts of Pennsylvania and New Jersey. The company’s ex-dividend date is Feb. 13 and the pay date is March 15. The 60-cent dividend amounts to a current yield of 4.1%. With a market cap of $17.3 billion, ED is trading around $60, 21% above its 52-week low last August.
Exelon
Exelon distributes electricity in Illinois and Pennsylvania and operates nuclear power plants in several states, including Pennsylvania and New Jersey. The company’s ex-dividend date is Feb. 13, and its pay date is March 13. The 53-cent dividend amounts to a current yield of 5.3%. With a market cap of $26.6 billion, EXC is trading at around $40, 12% below its 52-week high last November.
5 Ex-Dividend Stocks to Love to buy This Week in 2012 – CenterPoint Energy
Houston-based CenterPoint wholesales transmission and distribution services to retail electric providers, municipalities, electric cooperatives, and other distribution companies and serves approximately 2.1 million metered customers. Its ex-dividend date is Feb. 14, and its pay date is March 9. The 20-cent dividend amounts to a current yield of 4.3%. With a market cap of $8 billion, the stock is trading at around $19 — 24% above its 52-week low last April.
Progress Energy
Progress Energy generates, transmits, distributes and sells electricity in North Carolina, South Carolina and Florida. It also operates nuclear plants and engages in alternative-energy projects. Its ex-dividend date is Feb. 15, and its pay date is March 16. The 62-cent dividend amounts to a current yield of 4.5%. With a market cap of $16 billion, the stock is trading at around $54.50 — 30% above its 52-week low last August.
5 Ex-Dividend Stocks to Love to buy This Week in 2012 – Duke Energy
Duke manages a portfolio of natural gas and electric supply, delivery and trading businesses in the U.S. and Latin America. Its ex-dividend date is Feb. 15, and its pay date is March 16. The 25-cent dividend amounts to a current yield of 4.7%. With a market cap of $28.4 billion, the stock is trading at around $21.50 — 27% above its 52-week low last August.
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Positive economic and earnings gains have driven the Dow to its highest level since May 2 and the highest level on the S&P 500 since July 21. The news that got the most attention was from the unemployment index, which fell to 8.3% — a three-year low.
Technically, the major indices have broken into bull-market trends after executing golden crosses. A golden cross is the intersection of the 200-day moving average by the 50-day moving average and is generally accepted as a “long-term validation of a rally.” According to Birinyi Associates, stocks have averaged a 6.6% gain following 26 golden crosses that have occurred since 1962.
The future appears bright even after a run of over 15% from its November lows by the broad-based S&P 500 since many companies have huge cash positions. And even after the recent advances the index is still 13.5% below the October 2007 high.
But some stocks that have participated in the advance have diminished potential for future appreciation. It is primarily those stocks with limited price potential that are excellent candidates for the production of cash to be reinvested following an expected round of profit-taking.
Here is our list of stocks to sell in May:
6 Best Stocks to Sell in May in 2012 #1 – Amdocs Ltd. (DOX)
Amdocs Ltd. (NYSE:DOX) is a software maker for the communications, media and entertainment industries.
The stock fell in August like many other tech stocks, but never fully recovered. Its earnings fell below the fiscal Q1 Zacks’ earnings estimate, and the continuation of its business with AT&T (NYSE:T) is questionable.
Our internal indicator, the Collins-Bollinger Reversal (CBR) flashed a sell signal accompanied by high volume on Feb. 3, and a sell from the stochastic indicator. The advance from the December lows should be used as an opportunity to sell.
6 Best Stocks to Sell in May in 2012 #2 – CA Inc. (CA)
IT software manufacturer CA Inc. (NASDAQ:CA) had a pop recently, but in the context of its long-term chart it is approaching major resistance.
The recent rally from $20 to $26 appears to be an excellent opportunity to sell this tech stock with limited potential. Insiders have been heavy sellers during the last 12 months.
Credit Suisse Equity Research commented recently that its new product sales “disappointed again,” and several fundamental analysts have targeted its price at $24 to $26 within 12 months. Sell now. Read more…
best Stock to invest in 2012 – Toy companies are not what they used to be. They used to be these places where plastic and metal got thrown together to produce trifles. Not anymore! Good toymaking is both an art and a science, combined with intensive market research, and tied-in with brands and franchises that worth billions.
I think of toys the same way I think of energy — the world always will need them, and that need always will be filled by companies like one best Stock to invest in 2012 – Mattel (NASDAQ:MAT)
The company makes toys across all of these famous brand names: Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Tyco R/C, CARS, Radica, Toy Story, WWE Wrestling, and Batman; Fisher-Price brands comprising Fisher-Price, Little People, BabyGear, View-Master, Dora the Explorer, Go Diego Go!, Thomas and Friends, Sing-a-ma-jigs, See ‘N Say, and Power Wheels and the American Girl Brand.
And despite that crowded stable, Mattel still can’t afford to rest on its laurels. The company constantly must fight rival best Stock to invest in 2012 – Hasbro (NASDAQ:HAS) to win licensing rights to the hottest trends. With video games and social media games now serving as additional competition, Mattel also finds itself entering that world as well.
Mattel can’t think of itself as just a toymaker anymore.
The bad news is profits at Mattel were down 53% this past quarter, partially because of an acquisition of HIT Entertainment and slower sales in two of its biggest names, Barbie and Hot Wheels.
The good news is Mattel is in fantastic shape to refine and grow its business. The company has about $1.4 billion in cash offset by the same amount of debt. The thing that really keeps its choo-choo trains running is cash flow. FY2011 generated $475 million worth, after $390 million in FY 2010. The company is on such solid footing that it pays out much of that cash flow as a 4% dividend.
Mattel is settling in as what Peter Lynch would call a stalwart. It’s growing at a nice, modest 10% annually. It has a well-established business and brand with reliable cash flow, strong yield and a market that is constant — kids. I trust in management to execute on its classic core business.
The key going forward will be successfully migrating into these new areas of entertainment, and given the company’s success thus far in its history, I consider that to be more likely than not. At 13 times this year’s earnings, MAT shares are a tad pricey, but given the dividend, I’d make it a buy.
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what is the best time to Sell a Dividend Stock in 2012 Dividend stocks have lots of appealing factors, and it’s easy to find reasons to buy. Some stocks have a great dividend yield. Others have a decades-long history of raising dividends once a year. Then there are picks with a modest dividend but great upside potential for shares.
If you’re looking for a reason to buy dividend stocks, there are plenty. But a trickier scenario is knowing when to get out.
So when do you sell a dividend stock? Some dividend investors have a holding period of forever, thinking that all stocks suffer slides or even dividend cuts, so it all works out in the wash when your priority is on the quarterly payout. If that describes you, then the answer to the question of when to sell is simply “never.”
Other dividend investors find quarterly payouts nice, but really secondary to share values. Investors with this mind-set typically set stop-losses or set sell targets because it’s the stock price that matters most. If that describes you, then obviously you’re not asking when to sell a dividend stock — you’re wondering when the best time to buy and sell is based on the best share price.
For those who fall in between, pulling the trigger on a dividend stock is a balancing act. They grant some leeway to stocks with a hefty and reliable payout when shares slip, or they’ll stick with a stock that has slashed its dividend because it has upside potential for shares in the long term. But where do you draw the line?
There are five conditions that are helpful in sounding the sell signal for any dividend stock investor.
what is the best time to Sell a Dividend Stock in 2012 – The company cuts or altogether eliminates its dividend. This one is fairly obvious. You can sometimes stomach a company that keeps dividends flat for a few years, but if a company is slashing dividends it means that the balance sheet has gotten so bad that it needs to literally take money out of shareholders’ pockets. The most likely scenario in this situation is that investors will be stung twice — once with the cancellation of dividends and again as share prices suffer. Take General Electric (NYSE:GE) in February 2009, for example. When it cut its dividend, GM saw shares drop 10% the next day. Read more…
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Best Investments 2012, best stocks to invest, best stocks to invest in 2012, Best Stocks To Invest In 2013, best way to invest in 2012, what to invest in 2012
Congrats, market watchers. The economic recovery might, in fact, be real. At least if we are using consumers’ relative health as a barometer.
We recently learned that household debt — as defined by obligations such as mortgage and credit card payments — has reached a 17-year low. Add additional bills such as property taxes and insurance premiums, and that debt level drops to its lowest point since 1984.
Top 4 Stocks to Watch in 2012 Netflix Could Go the Way of Blockbuster
Not only has the overall household debt dropped by $600 billion since 2008, but today’s low-interest-rate environment means that debts come at a lower cost. Mortgage interests, for example, are at a seven-year nadir.
With declining debt comes an increased sense of consumer confidence, which can lead to higher spending levels. Some of the money consumers once were earmarking for credit card bills or higher mortgage payments can now be used for discretionary purchases.
The result is rising retail sales. In March, sales rose 0.8% from February, nearly doubling analysts’ expectations. Year-over-year, retail sales have surged at a 5% better pace than in the 12 months preceding July 2008 — the previous peak for retail sales data.
The most sizable sales gains were seen from Internet retailers, which themselves barely noticed a blip during the worst of the recession. This sector’s market share has edged up to 7.3% from 5.7%, and group sales are up more than 30% from the mid-2008 sales peak.
Of course, the granddaddy of all Internet retailers, Top 4 Stocks to Watch in 2012 Amazon.com (NASDAQ:AMZN), stands to benefit from this trend if it can break through short-term resistance around the $200 level. The stock is up more than 300% in the past five years.
The worst-performing retail sector, not surprisingly, is home furnishings, which have seen collective sales drop 13% from their peak. As the real estate market remains tenuous, retail chains that benefit in the aftermath of new home sales will struggle.
Publicly traded furniture chain Top 4 Stocks to Watch in 2012 Haverty Furniture Companies (NYSE:HVT) is virtually unchanged during the past 12 months and is down 8% during the past half-decade.Top 4 Stocks to Watch in 2012 Williams-Sonoma (NYSE:WSM), which attracts many shoppers wanting to equip a new kitchen, is little changed in the past five years and has lost 10% during the past 12 months.
But while consumers might not be purchasing new supplies for their homes, they have been sprucing up the house themselves. Hardware stores and building-material dealers are recovering and have propped themselves higher after a pronounced fall.
One name from this sector that looks promising is Top 4 Stocks to Watch in 2012 Sherwin-Williams (NYSE:SHW), which has gained 33% so far in 2012, handily outperforming the broader market. In the past five years, SHW has risen 81% — not too shabby for a retailer of something as unsexy as paint. Technically speaking, the stock is trading in new all-time high territory, so it should not be enduring any overhead resistance.
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Collectively, the 30 Dow Jones Industrial Average stocks are meant to represent the entire stock market. But as with any group, there are some that do things well … and some that bring up the rear.
One particular area of divergence is how Dow components pay dividends. The top 10 Dow dividend stocks offer yields as high as 6% — while the lower portion of these 30 components can’t even crack the 1% mark.
Some flat-out refuse to pay a decent dividend, hoarding their profits. Yes, dividend payout ratios are low across the board at about half their normal levels — roughly 25% compared to 50% payout ratios historically. But some Dow components are lower even than that. And then, of course, are the battered stocks that are flat-out incapable of increasing payouts because of poor operations.
Although the dividend yield for the broader market is pretty paltry at just south of 2%, these dead dividend stocks can’t even hop over that low bar.
To be clear, many of these stocks might be decent swing trades — and I’ll be the first to admit that some of these stocks I personally have singled out as good buys from a share appreciation perspective. But for the purpose of this conversation, we’re talking about investing from an income perspective — and if you’re an investor that places emphasis on yield first, you should put these seven dead Dow dividend stocks on your list of investments that don’t make the cut.
Let’s take a look:
7 Dead Dow Dividend Stocks to buy in 2012 #7: Caterpillar
Dividend Yield: 1.7%
Payout Ratio: 24%
From a trader’s perspective, Caterpillar (NYSE:CAT) is a pretty good play. It’s one of InvestorPlace.com’s 10 Best Stocks for 2012 and one of my personal Editor’s Picks. However, for dividend investors, the trouble with Caterpillar is that the stock just isn’t forking over the cash.
Caterpillar yields a paltry 1.7%, easily below the average headline yield, and boasts a payout of just 24% of its profits.
Caterpillar isn’t as bad as some of the other stocks on this list. But it’s certainly no friend to income investors with a weak payday like that.
7 Dead Dow Dividend Stocks to buy in 2012 #6: Cisco
Dividend Yield: 1.5%
Payout Ratio: 10%
With tech giant Cisco (NASDAQ:CSCO), you start to see the worst the Dow Jones Industrial Average has to offer. A meager 1.5% yield, and just 10% of the profits given back to shareholders? That’s not winning over any friends in the income investing crowd.
Cisco admittedly has been rallying recently, riding the strength of the tech sector and tacking on 16% gains year-to-date — double the broader Dow Jones average. But its five-year return is an ugly -20%.
A poor dividend, poor long-term performance and massive restructuring announced last year that is boosting numbers through cuts and not growth? Doesn’t sound like the kind of dividend stock most income investors should be looking for right now.
7 Dead Dow Dividend Stocks to buy in 2012 #5: IBM
Dividend Yield: 1.4% Read more…
Common stocks are, of course, one of the best ways to play the market. Right now I’ve got a current list of 10 stocks that curry my favor, and here they are, in no particular order:
Top 10 Common Stocks to own in 2012 1) American Express (NYSE:AXP): My top pick is American Express, the world’s largest card issuer measured by purchase volume. AXP achieves success by focusing on high-spenders, and is the premium card network for that demographic. On average, American Express card members spend 3.5-4 times more than Visa and MasterCard users, respectively. To attract customers, AXP built a network that is recognized as a global leader in customer service. AXP has earned five consecutive J.D. Power and Associates awards for highest customer satisfaction among credit card companies.
American Express focuses on attracting quality customers. Its card members have the highest credit ratings among the major card issuers. In the fourth quarter, American Express had a low loan-loss rate of 2.3% –the lowest rate in its peer group, which averaged 4.52%. The lower loan losses came as American Express card members spent a record amount on their cards in the quarter.
Top 10 Common Stocks to own in 2012 2) Procter & Gamble (NYSE:PG): At the Daytona 500, a crash by the #42 car sent 200 gallons of jet fuel from a jet dryer spilling across the track. Out came the cleanup crew armed with instantly recognizable orange and blue boxes of Tide detergent. Great branding has powered Tide’s success for over 60 years. Tide is one of P&G’s 24 billion-dollar-brands –those generating a billion dollars in revenue a year.
Top 10 Common Stocks to own in 2012 3) Norfolk Southern (NYSE:NSC): You should key in on industries with high barriers to entry when exploring investment opportunities. Take a look at a map of Norfolk Southern’s railways and it is hard to imagine any company building a competing network. With rights-of-way more than a century old, Norfolk’s rails crisscross the eastern U.S. through the largest metropolises, in and out of Appalachian coal country, into the heart of the Midwest manufacturing states, and all the way to the Gulf of Mexico. Read more…
