Posts related to ‘Defensive Stocks’

More Predictions of Dividend Hikes For 2010 (MAT, AWK, XOM, WCRX, AMGN, GPS, MMM, GE, JPM, TWX)

Companies seemed to prefer share buybacks in 2007 and 2008, and maybe part of 2009.  Why not, if the stock is cheap?  But then 2009 came and many companies were derailed by the recession and that forced many big names to do the unthinkable… dividend cutting.  But now things have started adjusting to the new normal and dividend payouts are either being lifted or being brought back closer to their former payout rates.  There are many big companies which are likely to hike their dividends, and some which need to start paying dividends.

Mattel, Inc. (NYSE: MAT), American Water Works Company, Inc. (NYSE: AWK), Exxon Mobil Corp. (NYSE: XOM), and Gap Inc. (NYSE: GPS) are all probably shoe-ins to raise their dividends in 2010.  There are two picks we have in the BioHealth arena which need to start paying dividends. Those are Warner Chilcott plc (NASDAQ: WCRX) and Amgen Inc. (NASDAQ: AMGN) and we have longer explanations about why these companies should start paying a dividend.  3M Co. (NYSE: MMM) should be in here as well as we assumed it would keep up with tradition, but the company boosted its payout on Tuesday night as the edits on this were being completed.  Interestingly enough, this 3M dividend hike is likely to bring General Electric Co. (NYSE: GE) back to the higher dividend payout sooner rather than later.

This is not the first dividend picking session.  Just listed on Monday were ten key large companies we expect to see dividend hikes in 2010.  While General Electric Co. (NYSE: GE) was one of those, JPMorgan Chase & Co. (NYSE: JPM) is likely to be back at the dividend table sooner than Jamie Dimon might have led you to believe.  If you think dividends haven’t been getting bumped up, just take a look at Time Warner Inc. (NYSE: TWX) and a slew of other large companies that just juiced up their dividend rates in recent trading days.

We have examined company finances, dividend histories, share prices, and yields to make several determinations.  Dividend coverage is key, because for companies to grow they cannot pay out 100% of their income.  It isn’t as though any of these are REITs.  In most of these predictions there is even a new dividend target given as a bogey.
Read More »

Posted on: February 10, 2010 – 5:45 am in Conglomerates, Defensive Stocks, Dividend, Oil & Gas, Pharmaceuticals, Shareholder Issues, Stock Buybacks, Value Investing, , , , , , , , , ,

Value Track: Revisiting Stocks The Rally Left Behind (ABT, MO, AWK, BKC, ENER, GENZ, KR, ORB, WMT, LEAP, PCS)

It was early in October before earnings season kicked off into full thrust when we first reviewed many large or actively traded stocks which had not participated in the stock market rally of 2009.  At the time, the DJIA was up 12.75% for the year, and the S&P 500 Index was up more than 19%; as of Friday’s post-jobs data close the DJIA is up over 18% and the S&P is up 22%.  To add an even more extreme measure since the March 9 close that traders use as the official pivot close before the great bull market of 2009 started, the gain the the DJIA is up over 58% and the S&P 500 is up over 63%.  Yet it is amazing.  Some of these stocks that have been left behind n the rally have still been left behind.

Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT).  Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS) were all the underperformers of the time.

We have broken these into two groups with the first being the ones that have managed to spark a recovery and rallied more than the markets.  Since the cut-off date of October 9 used for these prices, the DJIA is up 5.3% and the S&P is up 3.2%.  The first group is the winners and we won’t spend much time there other than how they have performed since the October 9 cut-off date:
Read More »

Posted on: December 7, 2009 – 6:50 am in Biotech, Defensive Stocks, Dividend, Drug companies, Editor's Picks, Large Cap Stocks, Mergers and Buy Outs, Retail, Satellite, Telecom, Value Investing, , , , , , , , , , ,

Stocks That Missed the Rally (ABT, MO, AWK, BKC, ENER, GENZ, KR, ORB, WMT, LEAP, PCS)

Here we are going into yet another earnings season.  We saw Monday how the market has rallied significantly from the March lows and the major indexes are even up in positive territory for the 2009 calendar.  The DJIA is up 51% from its absolute lows of March, and the S&P 500 has rallied more than 61% from its absolute lows in March.  If you look at the December 31, 2008 closing bell levels, the DJIA is now up about 12.75% and the S&P 500 is now up more than 19% year-to-date.

But almost as always, there are still some key very large and/or very active stocks which have not recovered anywhere close to the same amounts with the overall stock markets.  Some of these lagging stocks are Abbott Laboratories (NYSE: ABT), Altria Group Inc. (NYSE: MO), American Water Works Company, Inc. (NYSE: AWK), Burger King Holdings Inc. (NYSE: BKC), Energy Conversion Devices, Inc. (NASDAQ: ENER), Genzyme Corp. (NASDAQ: GENZ), Kroger Co. (NYSE: KR), Orbital Sciences Corp. (NYSE: ORB) and Wal-Mart Stores Inc. (NYSE: WMT).  Two similar situation stocks that are Leap Wireless International Inc. (NASDAQ: LEAP) and MetroPCS Communications Inc. (NYSE: PCS).  We wanted to explore the forward values and relative performance, and the consensus estimates based upon Thomson Reuters data.  Only two of these stocks have market capitalization rates under $1 billion, and almost all are very actively traded and well known in their sectors.
Read More »

Posted on: October 12, 2009 – 5:03 pm in Biotech, Charts, Consumer Goods, Defensive Stocks, Dividend, Editor's Picks, Retail, Utilities, Value Investing, Water, , , , , , , , , , ,

Trading Guns For Jobs

uncle samThe annual Conventional Arms Transfers to Developing Nations report from the Congressional Research Service shows that the US is still by far the world’s leading arms merchant.

A summary of the document in The New York Times reports that weapons agreements with the US in 2008 totaled $37.8 billion, about 68% of the entire worldwide market in arms. It is too bad that America already has such a large share. Arms may be one of the few large businesses that the US could expand in a way that would help the trade balance, GDP, and employment. American sales were only $25.4 billion in 2007, so US arms revenue may be growing at a rate too quick to sustain. Read More »

Posted on: September 8, 2009 – 5:03 am in Defensive Stocks, International Markets, , ,

Can Verizon Raise Dividend Indefinitely? (VZ, T)

Verizon LogoVerizon Communications Inc. (NYSE: VZ) did not immediately rise despite the announcement from the company that it was raising its quarterly dividend.  Most dividend hikes do not raise the price of stocks immediately, but this 3+% rise in the dividend is an interesting one because this is the third straight year that the company has raised its dividend.  The new dividend is $0.475 per share per quarter,  up from a $0.46 dividend for the last four quarters and a $0.43 dividend before that.

Some may point out that this is actually the smallest dividend hike compared to the two prior dividend hikes.  Frankly, in today’s business and economic climate that is a whiners’ argument that is no different than lottery ticket winners complaining about all the taxes they will have to pay.  What we want to see is how much it can grow down the road.   And just as importantly, we wanted to see how this stacks up against rival AT&T Inc. (NYSE: T) and its dividend history and the future dividends.
Read More »

Posted on: September 3, 2009 – 2:30 pm in Defensive Stocks, Dividend, Telecom, Utilities, Value Investing, ,

Defensive Stocks Offering No Haven (WMT, PEP, KO, TAP, KFT, CAG, CPB, HRL, MCD, MO, VGR, RAI, PG, CL, MRK, JNJ, NVO)

Burning Money PicWasn’t it just last week that we were up eight days in a row on the DJIA?  And now we have a sell-the-news reaction to the recent growth numbers.  Maybe it is because we ran too far too fast and because we started pricing in robust growth rather than muted growth.  But generally when equities have stayed hot and then start to sell off in profit taking or in case things got too heated, you at least see a migration into some of the defensive stocks.  That is not the case.  In our normal 16 Defensive Go-To Stocks, only ONE was up.  If you throw in Wal-Mart Stores Inc. (NYSE: WMT) as the ultimate defensive stock like we usually do, then you have only TWO of 17 trading up on the day….

PEPSICO INC (NYSE: PEP) $56.1805.. Down $0.4895; -0.86%
COCA COLA CO (NYSE: KO) $48.58.. Down $0.19; -0.39%
MOLSON COORS CO. (NYSE: TAP) $47.01.. Down $0.37; -0.78%
KRAFT FOODS INC. (NYSE: KFT) $28.08..  Down $0.27; -0.95%
CONAGRA FOOD INC. (NYSE: CAG) $20.13.. Down $0.40; -1.95%
CAMPBELL SOUP CO. (NYSE: CPB) $30.86.. Down $0.50; -1.59%
HORMEL FOODS CORP. (NYSE: HRL) $37.00..    Up 0.05; +0.14%
MCDONALDS CORP. (NYSE: MCD) $55.72.. Down $0.51; -0.92%
ALTRIA GROUP INC. (NYSE: MO) $18.13.. Down $0.16; -0.83%
VECTOR GROUP LTD. (NYSE: VGR) $15.71.. Down $0.07; -0.44%
REYNOLDS AMERICAN (NYSE: RAI) $45.17.. Down $0.54; -1.18%
PROCTER GAMBLE CO. (NYSE: PG) $53.05.. Down $1.06; -1.96%
COLGATE PALMOLIVE (NYSE: CL) $71.82.. Down $0.89; -1.21%
MERCK CO INC. (NYSE: MRK) $31.79.. Down $0.64; -1.97%
JOHNSON & JOHNSON (NYSE: JNJ) $59.88.. Down $0.56; -0.92%
NOVO NORDISK (NYSE: NVO) $60.024.. Down $0.986; -1.62%

Oddly enough, Wal-Mart is the ONLY one of the DJIA 30 components trading higher this afternoon.

JON C. OGG
SEPTEMBER 1, 2009

Posted on: September 1, 2009 – 2:31 pm in Defensive Stocks, Trading Alert, , , , , , , , , , , , , , , , ,

Defensive Stocks Refuse To Participate In Rally (PEP, KO, TAP, KFT, CAG, CPB, HRL, MCD, MO, PG, CL, MRK, JNJ)

Investors flock to defensive stocks in times of trouble and and when they worry, assuming they look to stay in the market when they are worried.  But if the trend here continues, this may be one of the worst times for defensive stocks compared to the overall market.  Our universe of 13 large-cap go-to defensive stocks looks awful in relative performance and it looks like only 1 stock of the 13 has actually outperformed the overall market.

Kraft Foods Inc. (NYSE: KFT), ConAgra Foods, Inc. (NYSE: CAG), and Hormel Foods Corp. (NYSE: HRL) have performed close to the overall markets, but that is almost it.  Forget about Campbell Soup Co. (NYSE: CPB) as that has been the worst of the lot.  Pepsico, Inc. (NYSE: PEP) and The Coca-Cola Company (NYSE: KO) are up double digits from recent lows, but are way behind the market index readings.  Even the high and mighty McDonald’s Corp. (NYSE: MCD) has greatly underperformed.
Read More »

Posted on: May 7, 2009 – 5:31 am in Defensive Stocks, HI/LOW, Index, Technical Analysis, , , , , , , , , , , , ,

The ‘Safety Premium’ In Water Investing (AWK, WTR, AWR, CWT)

water-image1We have been investigating several of the “safe sectors” for investing to identify which ones may have seen the worst or which ones could continue to have issues regardless of whether or not recent stock market strength holds up or not.  Water is supposed to be one of those immune sectors as people have to drink water every day and just about every aspect of life revolves around water.  So we are starting out with domestic water utilities, because this is the first line of defense in the water sector and the most defensive portion of the water sector.  In theory, these do not require any new community growth or new water-intensive industries for the “defensive” thesis to hold up.  We briefly wanted to review American Water Works Company, Inc. (NYSE: AWK), Aqua America Inc. (NYSE: WTR), American States Water Company (NYSE: AWR), and California Water Service Group (NYSE: CWT).
Read More »

Posted on: March 23, 2009 – 10:35 am in Defensive Stocks, Water, , , ,

Defensive Stocks Hammered Too (PEP, KO, TAP, KFT, CPB, HRL, MCD, MO, RAI, PG, CL, MRK, JNJ)

burning-money-pic4It’s another rough trading day in the stock market.  It is bad enough that the DJIA is down over 3% to decade lows and under 7,000… But even almost all of the defensive stocks are down today.  Many of these have been absolutely bashed in recent days and weeks as you will see compared to their 52-week highs.

Symbol   Last          Change              52WK-HI
PEP    $47.13    (-$1.01; -2.10%)   $75.25
KO      $39.96    (-$0.89; -2.18%)   $61.90
TAP    $35.84    (+$0.61; +1.73%) $59.51
KFT    $22.31    (-$0.47; -2.06%)   $34.97
CAG    $14.93    (-$0.15; -0.99%)   $24.87
CPB    $26.51    (-$0.26; -0.97%)   $40.85
HRL    $31.60    (-$0.23; -0.72%)   $42.77
MCD    $52.55    (+$0.30; +0.57%)  $67.00
MO      $15.31    (-$0.13; -$0.84%)  N/A “PM”
VGR    $11.74    (-$0.67; -5.38%)   $19.45
RAI    $33.57    (-$0.01; -0.03%)   $65.01
PG       $47.40    (-$0.77; -1.60%)   $73.57
CL       $58.47    (-$1.71; -2.84%)   $80.49
MRK   $23.93    (-$0.27; -1.12%)   $45.73
JNJ    $48.39    (-$1.61; -3.22%)   $72.76
NVO   $46.51    (-$1.91; -3.94%)   $73.73

Jon C. Ogg
March 2, 2009

Posted on: March 2, 2009 – 2:15 pm in Defensive Stocks, HI/LOW, Trading Alert, , , , , , , , , , , , ,

Defensive Stock… Bracing For Coca-Cola Earnings (KO, PEP)

coke-imageThursday morning we will get earnings from The Coca-Cola Company (NYSE: KO), and this will likely be the big set-up play for Friday’s Pepsico, Inc. (NYSE: PEP) earnings.  We have prepared a detailed  preview for Coca-Cola’s earnings.
Read More »

Posted on: February 11, 2009 – 4:53 pm in Defensive Stocks, Earnings, Food, , , , , , ,

Week Ahead: Coke vs. Pepsi Investor Taste Test (KO, PEP)

This coming week will mark the earnings reports for two key household consumer stocks, both of which were supposed to be defensive.  The Coca-Cola Company (NYSE: KO) reports earnings on Thursday and Pepsico, Inc. (NYSE: PEP) is set to report earnings on Friday, February 13, 2009.

Read More »

Posted on: February 7, 2009 – 10:39 am in Consumer Goods, Defensive Stocks, Earnings, Food, ,

Can P&G Earnings Trump Colgate & Chattem? (PG, CL, CHTT)

P_and_g_logoTraders and investors alike look for defensive stocks with certainty of earnings in hard times like these.  Tomorrow we will get earnings from Procter & Gamble Co. (NYSE: PG), and the consumer products giant is definitely among those defensive companies.  Its competitor Colgate-Palmolive Co. (NYSE: CL reported record results this morning.  Investors want to know if the larger rival will be a repeat performance.

Read More »

Posted on: January 29, 2009 – 5:39 pm in Consumer Goods, Defensive Stocks, Earnings, , ,

Jim Cramer Takes on Yum! CEO (YUM)

Yum_brands_logoTonight on CNBC’s MAD MONEY, Jim Cramer hosted Doug Novak, CEO of Yum! Brands Inc. (NYSE: YUM), to discuss the economy and the company’s place in casual dining during a major economic slowdown.  With brands like Taco Bell, KFC, and Pizza Hut, Cramer wanted to see what was under the hood here.  He said the stock is trading at only 14-times earnings and was down over 7%today.  He noted a same store sales growth slowdown and squeezedmargins.  Cramer has been very positive on this stock before and never really changed his stance before today.  This was also one of our own New Defensive Stocks with a growth flare for 2008.

Read More »

Posted on: November 5, 2008 – 6:35 pm in Cramer, Defensive Stocks, Food, Retail,

The “No Reward” Stock Market (INTC)(JPM)(WFC)

Good deeds should be their own rewards, but in the stock market that it not entirely true. Good earnings, especially in a harsh world, are supposed to yield shareholders something. In the perverse climate of suspicion that has enveloped the market for the last two days, doing good, doing well, means next to nothing.R218533_855025_2

Read More »

Posted on: October 15, 2008 – 9:57 am in Defensive Stocks, , ,

Apocalypse Now: Do The Markets Have A Chance To Recover

95129cThere were several pieces of bad news today, but three stand out. This news may have been the primary cause of the market sell-off which took the Dow down 679 points, or 7.3%, to 8,579. The market was above 14,000 less than a year ago.

Every investor and most working men and women have the same questions. What will it take to get the economy back in order? Is the die cast for an awful and prolonged period of financial despair.

The most alarming information came from The Wall Street Journal, In its latest forecast survey from 52 economists, the paper found that the experts expect the GDP to contract in the third and fourth quarters of this year and the first quarter of next.

The paper reports that "If those predictions bear out, it would mark the first time U.S. GDP—the total value of goods and services produced—has contracted for three consecutive quarters in more than a half century."

Read More »

Posted on: October 9, 2008 – 4:52 pm in Defensive Stocks

Ten Things To Do To Save Yourself In a Market Meltdown (AAPL)(GOOG)(SIRI)(MCD)(INTC)

AngrybearJim Cramer wants people to sell all of their stocks. Even though the market may keep falling, that might not be a practical solution for everyone. There are several things investors can do to at least partially save themselves from a falling market and get in position if stocks move up again.

1. Sell your dogs. No matter how much an investor loves a stock, firms in the second or third tier of their industries are going to get hurt more. They will get hit by both a falling market and a recession. Some good examples are AMD (AMD), which runs a distant second to Intel (INTC). Yahoo! (YHOO), which is well behind Google (GOOG) in search is another company which will find the going especially tough. Palm (PALM) runs behind Apple (AAPL) and RIM (RIMM) in the smart phone industry. In an awful market, being in second place means being in last place.

Read More »

Posted on: October 8, 2008 – 10:14 am in Defensive Stocks, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Safest Stocks As The Market Goes To Hell (PG)(WMT)(CL)(MSFT)(MO)(XOM)

Angrybear_2It appears that every stock in the market is being crushed, but that is not entirely so. Several companies in industries not likely to be badly by a deep recession are doing well, and should continue to do so.

Most of these companies also carry reasonable dividends.

As panic races through the markets, save yourselves if you can.

Read More »

Posted on: October 6, 2008 – 9:33 am in Defensive Stocks, , , , , ,

Defensive Stocks Only Mixed In Stock Market Turbulence (PE, KO, TAP, KFT, CPB, HRL, MCD, MO, RAI, PG, CL, MRK, JNJ)

You know it’s a rough day in the market when even defensive stocks are weak or mixed.  We are at least seeing a mixed bag from some of these. But the trend is a pretty easy one to see.  Even defensive stocks aren’t acting as a safe haven as they have in prior months.  Beer is up, tobacco is down. Food is up to mixed, but consumer products are mixed.  Below you will see how our list of "go-to defensive stocks" is showing a mixed bag:

Read More »

Posted on: September 29, 2008 – 11:45 am in Defensive Stocks, HI/LOW, , , , , , , , , , , , ,

Dodging The Dow Drop: Coke (KO), GE (GE), And Cat (CAT)

Twenty-seven of the Dow components are down. And, three are playing defense in an brutal market: Coca-Cola (KO), GE (GE), and Caterpillar (CAT). Each of these is up a modest amount.

With the DJIA off over 200 points, financial stocks in the index are taking on more water. AIG (AIG) is off almost 8%. Bank of America (BAC) is down almost 7%. Boeing (BA) is off nearly 5%, even after an upbeat forecast about its next 20 year prospects.

Coke should be holding its own. Most of what it sells is inexpensive, global, and easy for the consumer to find. Its balance sheet is as good as any. If earnings suffer, the ding will be minor.

GE (GE) disappointed some investors today, but, it held its full-year forecast, something which a number of companies may not be able to do.

Caterpillar (CAT) may be an odd stock to be rising on a hard day. Industrial equipment can be cyclical, but the firm says that the demand for its products is unusually strong overseas.

The few stocks which are up today are likely to hold well if the market continues its slide.

Douglas A. McIntyre

Posted on: July 11, 2008 – 11:22 am in Defensive Stocks, , , , , ,

Dodging The Dow Drop: Coke (KO), GE (GE), And Cat (CAT)

Twenty-seven of the Dow components are down. And, three are playing defense in an brutal market: Coca-Cola (KO), GE (GE), and Caterpillar (CAT). Each of these is up a modest amount.

With the DJIA off over 200 points, financial stocks in the index are taking on more water. AIG (AIG) is off almost 8%. Bank of America (BAC) is down almost 7%. Boeing (BA) is off nearly 5%, even after an upbeat forecast about its next 20 year prospects.

Coke should be holding its own. Most of what it sells is inexpensive, global, and easy for the consumer to find. Its balance sheet is as good as any. If earnings suffer, the ding will be minor.

GE (GE) disappointed some investors today, but, it held its full-year forecast, something which a number of companies may not be able to do.

Caterpillar (CAT) may be an odd stock to be rising on a hard day. Industrial equipment can be cyclical, but the firm says that the demand for its products is unusually strong overseas.

The few stocks which are up today are likely to hold well if the market continues its slide.

Douglas A. McIntyre

Posted on: July 11, 2008 – 11:21 am in Defensive Stocks, , , , , ,