Jon Marino of PEHub.com noted that P.E. firms are hiring and referenced a follow-up report for BDO USA’s third annual private equity “PErspective” report… 57% of private equity executives increased professional staffing and 62% plan to hire again this year.  This is a complete reversal from the layoff waves of prior years.  Here is more detail from that report.

Whether you like millionaires or billionaires or hate them, the one aspect that is so unfairly portrayed about companies bought by private equity firms is as follows: Most businesses bought by private equity firms need to be turned around or need to be run better.  Sure, they get leveraged up and they scrap inefficient operations.  The dirty secret that private equity firms are not defending enough is that many of these companies would have headed for bankruptcy in the long-term if they had not stepped in.  If that results in a liquidation rather than a pure bankruptcy, guess how many jobs get lost at those companies… all of them, rather than some.

The business sector is not just a one-way street.  Companies hire workers in good times and most fire in bad times.  We even ran our own 2011 Layoff Kings.

JON C. OGG

It turns out that many stocks with high dividend yields are now more attractive than sovereign debt in the U.S. and abroad. Part of the allure, besides income or reinvestment, is that dividend stocks often hold up better than other investments during jittery markets. It is hard to imagine, but the high-yield utility sector was one of the top performers of the S&P in 2011. In some cases, half of an investor’s total return through time may come from dividends. Warren Buffett generally picks dividend-paying companies for Berkshire Hathaway Inc. (NYSE: BRK-A) after following some of the principles of Benjamin Graham.

The 24/7 Wall St. 2012 Model Dividend Portfolio includes the following stocks: American Electric Power Co., Inc. (NYSE: AEP); American Water Works Company, Inc. (NYSE: AWK); AT&T, Inc. (NYSE: T); General Electric Co. (NYSE: GE); Government Properties Income Trust (NYSE: GOV); Kimberly-Clark Corporation (NYSE: KMB); Senior Housing Properties Trust (NYSE: SNH); and Wal-Mart Stores Inc. (NYSE: WMT).

While exchange-traded products have been avoided in the past, recent trends merit a look at the open-end or closed-end mutual funds and ETF products as follows: SPDR Barclays Capital High Yield Bond (NYSE: JNK); JPMorgan Alerian MLP Index ETN (NYSE: AMJ); ALPS Alerian MLP ETF (NYSE: AMLP); and PowerShares Financial Preferred (NYSE: PGF).

Lastly, there have been some exits due to upside price performance: Altria Group Inc. (NYSE: MO); Digital Realty Trust Inc. (NYSE: DLR); Enterprise Products Partners LP (NYSE: EPD); and Kinder Morgan Energy Partners LP (NYSE: KMP).

We have described the features and outlook for each component of our Model Dividend Portfolio.

GE raised its quarterly payout by $0.02 to $0.17 per quarter as the company tries to move back towards its old payout rate.  This dividend will not come until 2012 and is payable on January 25, 2012 to shareholders of record as of December 27, 2011.  The stock’s ex-dividend date is December 22, 2011.

Again, this is even sooner than we expected and it was not expected by many in the market.  GE shares were already yielding 3.7% as is.  Now the stock is up 2.9% at $16.78 and the new dividend yield will be just over 4% now.

Jeff Immelt noted that GE has redeemed the Berkshire Hathaway Inc. (NYSE: BRK-A) preferred shares and is redeploying its NBC Universal capital into other growth areas.  It was just this week that the company’s GE Capital forecast that its metrics have continued to improve and that it would start paying a dividend back to the parent company as soon as it was cleared to do so.  Be advised that this is the fourth dividend hike in two years since GE had to cut its payout to more easily get through the recession.

Immelt also noted, “We believe that the GE business model will continue to deliver strong earnings and cash flow growth going forward.” 

As far as what this translates to based upon the Thomson Reuters consensus estimate of $1.56 EPS for 2012, the dividend payout ratio is about 43.5% of expected earnings per share.  As far as the 2011 consensus of $1.37 EPS, the payout ratio is far higher at nearly 50%.

If you want to receive the full 24/7 Wall St. 2012 Model Dividend Portfolio you can sign up in the email submission below.  Each morning we send our free email list subscribers a snapshot of the key feature stories, the top daily analyst upgrades and downgrades, previews for key events, and many other aspects governing your finances.

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While we are expecting a dividend hike again, it seems unlikely that the boost will end up being a large dividend boost.  Pfizer’s current $0.80 per year annualized payout compares to earnings estimates of $2.28 EPS for 2011 and $2.31 EPS for 2012.  In short, Pfizer is not quite paying out 40% of its normalized income.

Drug rival Merck & Co. Inc. (NYSE: MRK) recently announced its first dividend hike in years.  It was actually the first hike since the Vioxx scandal.  That should only keep pressure on Pfizer to go ahead and raise its dividend.

There is a history of its dividend hike coming this time of year, but the payout hike won’t be realized as cash in the bank for investors for another 60 days or so.  The dividend being raised was last announced on December 13, 2010 and previously on December 14 of 2009.

Pfizer noted last year that the move to $0.20 from $0.18 per quarter was roughly an 11% hike.  Pfizer also has a game of catch-up to play as its dividend used to be much higher at $0.32 per quarter before the recession caused many companies to lower their very high yields and before its most recent large M&A deals.

Merck’s dividend hike was 11%.  We will make a prediction for the coming hike: ).22 or $0.23 per quarter.  That will translate to a 10% hike or a 15% hike to the dividend payouts.  The current yield of Pfizer is 3.91% based on a share price of $20.45.  Merck’s dividend was raised to $0.42 from $0.38 per quarter, and that translates to a dividend yield today of 4.72% based upon a current price of $35.55.  The old yield at Merck based upon today’s price would still be 4.27%.

The Merck hike alone will have put pressure on Pfizer to hike its dividend.  A 10% hike to $0.22 would generate a dividend yield of 4.30%.  That would have caught it up to the old Merck payout.  A hike to $0.23 per quarter would generate a current dividend yield of 4.5%. If you follow cause and effect theory, or action and reaction theory, Pfizer’s hike is a must.  The boost would still be under or close to 40% of expected income from operations per share to be paid out.

Are there some risks that Pfizer might not raise its dividend?  Yes, but they are just unlikely to matter.  After Merck made the first jump in its dividend in years, Pfizer almost has to follow suit.  Watson Pharmaceuticals, Inc. (NYSE: WPI) is the local outfit which wins from the recent patent expiration of its blockbuster statin Lipitor, and Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is set have a generic version of Lipitor after this coming May.  While Pfizer’s market share on the entire Lipitor market may only be 40% of the past, this patent expiration date had been known for years.

Perhaps the biggest risk to ongoing dividend hikes is not just the endless restructurings of Pfizer, but its major acquisition trail.  That effort has been almost endless.  Its acquisition efforts have also given the company a very wide moat of a drug pipeline ahead and it has insulated its share price from the patent cliff.

At $20.45, Pfizer’s market capitalization rate is $157 billion and its 52-week trading range is $16.59 to $21.45. Merck’s $35.55 price generates a market cap of $108.2 billion and the share price compares to a 52-week range of $29.47 to $37.65.

JON C. OGG

Dimon’s presentation is one that the current slump in investment banking and in the world of trading may be more cyclical (temporary) rather than secular (permanent).  Many will disagree with this notion.  Some will agree.  He believes that the investment banking is a solid business and that demand will return. He even believes (or is communicating) that there will be twice as much capital to invest in the next decade.

The internal belief is that the bank, which is America’s strongest bank by capital and credit metrics of the money-center and super-regional banks, could buy back up to $8 billion in stock in 2012 if the new more harsh stress tests are applied systemwide.  He also talked about making a return for shareholders, something that many are still hoping for when you consider the price drops that have been seen in 2011 and considering the deep discounts to book value.  Dimon is looking to lightly boost the dividend next year if allowed.

Where this gets interesting is that Dimon was again knocking the regulatory environment.  He also noted that he has increased some exposure to Europe since the end of the last quarter.

The market today is voting for Jamie Dimon and against the powers that be.  J.P. Morgan shares are trading up about 2.3% at $33.98 on the day. The bank’s presentation page is here.

JON C. OGG

This was a low yield for a DJIA component at 1.2% currently, but the company just increased the amount of its dividend payout by half.  Most DJIA components do not raise their payouts by 50%.

The company declared an annual dividend, rather than a quarterly dividend, of $0.60 per share.  Investors have a payable date of January 18, 2012 for holders of record at the close on December 16, 2011.

Investors should care about this move.  Disney’s dividend history has tended toward double-digit dividend hikes when it has voted to raise the payouts in the past, but we have not seen anything like this high of a dividend boost in years and years from this company even if this marks the 56th consecutive year of dividend payments.

Dividends are better indicators of an underlying business than share buybacks or other “dividend alternatives” that are usually seen.  A company may buy shares because it thinks they are cheap, but increasing a dividend payout is an indicator that earnings should remain strong for years into the future.  Companies generally do not like to cut dividends.

Disney may have a big boost today, but the payout ratio is barely expected to be 20% as the Thomson Reuters estimate for fiscal September-2012 is $2.90 EPS.  We would like to see a move away from this annual payment, but that may just be a semantic around mechanics rather than structure.

JON C. OGG

Mosaic has a market value of roughly $24.4 billion, so another 5% of the potential float will now not be hitting the market.  Certainly not a traditional buyback, but shares are responding positively.

The trusts were selling 18 million shares of Mosaic upon its entrance into the S&P 500 Index in September and that effectively killed the gains that would have been seen from normal index buying. It was also during a time when the market was sliding lower. The sale earlier in the year was roughly $6 billion.

On last look, Mosaic shares are up 4.5% at $57.02 in active pre-market trading and the 52-week range is $44.86 to $89.24.

JON C. OGG

We have tracked only the large buyback announcements made this month in the following companies: The Allstate Corporation (NYSE: ALL); American International Group, Inc. (NYSE: AIG); CBS Corporation (NYSE: CBS); Fidelity National Information Services, Inc. (NYSE: FIS); Pfizer Inc. (NYSE: PFE); Reynolds American Inc. (NYSE: RAI); Starbucks Corporation (NASDAQ: SBUX); Sysco Corporation (NYSE: SYY); Thermo Fisher Scientific, Inc. (NYSE: TMO); Viacom, Inc. (NYSE: VIA-B); and Valeant Pharmaceuticals International, Inc. (NYSE: VRX).

As far as how share buybacks in general matter for stocks, you can always play the buyback leaders via the PowerShares Buyback Achievers (NYSE: PKW), and it is almost exactly in the middle of its 52-week trading range.  Those buybacks outlined below do not include the many $150 million, $100 million, and lower buybacks.  The tally all said and done here so far in just the first half of November of 2011: over $27 billion!!!

The Allstate Corporation (NYSE: ALL) is trying to tell shareholders they are in good hands because the announcement over the next 18 months is that it would repurchase up to $1 billion in common stock.  The market cap today is just over $13 billion.

How can American International Group, Inc. (NYSE: AIG) have a share buyback program?  It announced in early November that it would buy back up to $1 billion in stock.  The $43 billion in market cap is one thing, but the amount of shares still owned by Uncle Sam (or taxpayers) is huge.  Actually, maybe this supports the stock value for us all!

CBS Corporation (NYSE: CBS) added to its prior plan and has authorized the repurchase of up to $1.5 billion in stock.  The current market cap is $16.5 billion, so we’ll leave it up to you to decide if this buyout matters or not.

Fidelity National Information Services, Inc. (NYSE: FIS) announced on November 1 that it was approving for up to $500 million in share buybacks over the next two years.  This compares to $7.4 billion in market capitalization.

Pfizer Inc. (NYSE: PFE) recently expanded its buyback program and it is now authorized to repurchase up to $7 billion worth of common stock.  This is a huge amount but it sounds small when you consider a $151 billion market cap.

Reynolds American Inc. (NYSE: RAI) this week announced a $2.5 billion share buyback plan which is good for the next two and a half years.  This is more than 10% of the company’s stock as the market cap is $23 billion.  Institutions own 46% of Reynolds.

Starbucks Corporation (NASDAQ: SBUX) recently added to its prior buyback plan with up to 20 million shares. This is more than $850 million at current prices, which compares to a market cap of $32.5 billion.

Sysco Corporation (NYSE: SYY) recently boosted its dividend but it also announced that it would repurchase up to 20 million shares of common stock.  This represents about $550 million today and its market cap is just over $16 billion.

Thermo Fisher Scientific, Inc. (NYSE: TMO) recently added $750 million to its prior buyback plan and its market capitalization is $18.5 billion.  The company had only $25 million remaining under a prior buyback and the new buyback is over the course of a year because it expires on November 9, 2012.

Viacom, Inc. (NYSE: VIA-B) must want to try to take itself private.  The market cap is just under $25 billion, but the company recently announced with its positive earnings report that it is expanding its buyback to $10 billion.  While this was an expansion of a prior plan, $10 billion is a massive sum.

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) is a bit odd.  While it announced that it would spend up to $1.5 billion repurchasing securities, this was listed as a buyback of stock and/or debt.  Its market cap is $13.25 billion today.

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JON C. OGG

Investors need to consider that the 52-week range is $11.51 to $23.43 and the consensus analyst price target is roughly $18.30.  Corning is now worth about $24.5 billion but it offers something for every type of investor.  This one offers upside in technology from consumer electronics, flat panel monitors, smartphones and on.  It is already a given that glass sales this holiday season will be “challenging” as we have heard about twice from Corning. 

Competitors also want to take away some market share as well as they have always wanted to. Still, Corning has managed to remain the independent leader and this stock is barely above its tangible book value.  It is a value stock and the company is doing what it can to keep shareholders interested even if times are not exactly booming. 

Corning is the best of its class in advanced glass if you think about Gorilla Glass.  The company just recently has boosted its dividend and announced an aggressive $1.5 billion share repurchase program.  We would not be surprised if shares pulled back in and that is where your opportunity is.  The buyback may even be a “market put option” that acts as a floor under the stock down under the $14.00 level.  Insiders have been buying stock as well. 
Corning always tends to get oversold during times of uncertainty and it always seems to bounce back handily.  With shares barely at 9-times expected earnings, the bar is currently set very low and we look for Corning to return to the $20 area as things normalize.

This was one of seven oversold picks poised for a comeback which was offered recently to our readers who sign up for our free daily newsletter service.  Each morning’s free newsletter is sent by email and includes the top news headlines, shows the top 15 or so analyst upgrades and downgrades, covers activist investor and insider trading, and offer key trading alerts for investors. Sign up in the box below.

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JON C. OGG

After the close came word of a $500 million share buyback plan. There are some things to consider. If SanDisk was truly concerned about its share price or about the effects of insiders and employee stock options creating market selling pressure, maybe this announcement should have come in August when the stock was getting pounded and was down in the low-$30 handles.

After a 3.4% gain to $52.01 today, the current 52-week range is $32.24 to $53.61. A buyback will not hurt, but this should have been announced two months ago. The stock trades at just over 11-times expected 2011 earnings and almost 10.5-times 2012 earnings.

Here is more evidence of a missed timing opportunity: we called it as one of the giant technology stocks that was too cheap back on August 24 and we named it as one of twelve stocks that should outperform Apple (NASDAQ: AAPL) as recently as October 12. Shares have risen by more than 60% from the August lows, they have risen by almost 50% from our date we said it was “too cheap” and by 17% from the “outperform Apple” date.

Why SanDisk thinks it needs to buy back stock now is beyond us. Maybe this is just an announcement for a rainy day, but we do not see the benefit. The $500 million is not even 5% of the $12.5 billion market cap.

JON C. OGG