The unofficial closing bells put the DJIA down nearly 15 points to 13,213.63 (-0.11%), the NASDAQ fell nearly 23 points (-0.74%) to 3,046.36, and the S&P 500 fell -0.39% or more than 5 points to 1,397.91.

There were several analyst upgrades and downgrades today, including Demand Media Inc. (NYSE: DMD) cut to ‘equal weight’ at Evercore; TransCanada Corp. (NYSE: TRP) cut to ‘hold’ at Desjardins; American Railcar Industries Inc. (NASDAQ: ARII) raised to ‘neutral’ at UBS; Chesapeake Energy Corp. (NYSE: CHK) raised to ‘outperform’ at BMO Capital; Kraft Foods Inc. (NYSE: KFT) raised to ‘overweight’ at JPMorgan; Dollar General Corp. (NYSE: DG) raised to ‘strong buy’ at Raymond James; and Kaiser Aluminum Corp. (NASDAQ: KALU) raised to ‘buy’ at Dahlman Rose.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: LDK Solar Co. Ltd. (NYSE: LDK) is up 10.8% at $3.28 (our coverage here); Humana Inc. (NYSE: HUM) is down -8.4% at $80.49; Senior Housing Properties Trust (NYSE: SNH) is up 0.32% at $22.09; and Sohu.com Inc. (NASDAQ: SOHU) is down -7.4% at $51.62.

Tomorrow we get earnings from Arch Coal Inc. (NYSE: ACI), Archer Daniels Midland Co. (NYSE: ADM), Bankrate Inc. (NASDAQ: RATE), Broadcom Corp. (NASDAQ: BRCM), Chesapeake Energy Corp., Domino’s Pizza Inc. (NYSE: DPZ); Office Depot Inc. (NYSE: ODP); Pfizer Inc. (NYSE: PFE); Sirius XM Radio Inc. (NASDAQ: SIRI); and Valero Energy Corp. (NYSE: VLO).

Other standouts from today include the following stocks:

Barnes & Noble Inc. (NYSE: BKS) is up about 54% at $21.07 after posting a new 52-week high of $26.00 earlier today. The company has created a joint venture with Microsoft Corp. (NASDAQ: MSFT). More coverage here.

Sunoco Inc. (NYSE: SUN) is up 19.5% at $48.89 after posting a new 52-week high of $49.50 earlier today. The company is merging with Energy Transfer Partners L.P. in a deal worth about $5.3 billion. More coverage here.

VeriFone Systems Inc. (NYSE: PAY) is down -12.7% at $47.52. The company’s stock was downgraded at Deutsche Bank, along with comments that the company was inflating its organic growth estimates.

Stay tuned for Tuesday. Richmond Fed President Jeffrey Lacker, Minneapolis Fed President Naryana Kocherlakota, San Francisco Fed President John Williams, and Philadelphia Fed President Charles Plosser are all giving speeches. Motor vehicle sales are expected to be reported throughout the day. We have noted the following events on the schedule (all times Eastern):

• 10:00 a.m. – Institute for Supply Management manufacturing index
• 10:00 a.m. – Construction spending
• 11:30 a.m. – 4- and 52-week bill auctions

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Paul Ausick

AON Corporation (NYSE: AON) Cut to Neutral at Citigroup.
AstraZeneca (NYSE: AZN) Cut to Underperform at BofA/ML.
Cisco Systems, Inc. (NASDAQ: CSCO) Reiterated Outperform with $26 target at Credit Suisse.
Digital Realty (NYSE: DLR) Started as Sell at Cantor Fitzgerald.
Digital River Inc. (NASDAQ: DRIV) Cut to Hold at Argus.
Henry Schein, Inc. (NASDAQ: HSIC) Cut to Neutral at Credit Suisse.
International Business Machines Corporation (NYSE: IBM) Started as Buy with $230 target at Stern Agee.  (LINK: FULL DETAILS)
Pep Boys-Manny, Moe & Jack Inc. (NYSE: PBY) Cut to Hold at Argus.
Salesforce.com (NYSE: CRM) named Bear of the Day at Zacks.
Senior Housing Properties Trust (NYSE: SNH) Cut to Hold at Stifel Nicolaus.
Seaspan Corporation (NYSE: SSW) Cut to Market Perform at Wells Fargo.
Sirius Satellite Radio, Inc. (NASDAQ: SIRI) Started as Underweight at Barclays.
Sohu.com Inc. (NASDAQ: SOHU) downgraded to Hold at RBS and Cut to Neutral at Susquehanna.
Sunoco Logistics, LP (NYSE: SXL) named as Bull of the Day at Zacks.
Thor Industries, Inc. (NYSE: THO) named Value stock of the day at Zacks.
Urban Outfitters Inc. (NASDAQ: URBN) Cut to Sell at Brean Murray.
Zoltek Companies, Inc. (NASDAQ: ZOLT) Cut to Underperform at Needham (LINK: FULL SUMMARY).

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

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.

We have evaluated the current prices to show the yields and true values here on each. If applicable, color and other price target data has been added on each.

Government Properties Income Trust (NYSE: GOV) is very interesting at only 1.2-times book value. You can make 2% lending to Uncle Sam for 10 years, or you can collect a 7.7% dividend yield here by acting as the government’s landlord. This REIT was oversold and its tenants are federal, state and local government entities. When we added it to the Model Dividend Portfolio, it was at $21.75 and now shares sit above $23.00. Thomson Reuters has a consensus price target of $24.17, but we value this one at $25.00 or even higher.

Senior Housing Properties Trust (NYSE: SNH) is acting as the landlord for senior communities, assisted living and nursing homes. It recently has had a capital raise to pay for acquisitions and it does deals where it can. It avoided the reimbursement woes and it generates a 7% dividend yield currently. Thomson Reuters has a consensus price target of $24.00.

Digital Realty Trust Inc. (NYSE: DLR), a long-time dividend favorite for technology and the IT, has been removed from the 2012 Model Dividend Portfolio. We consider this the “Landlord of Technology and the Cloud,” and we removed it formally at $4.50 on the list, but now shares are even higher at $66.25. Our maximum price threshold was $62.00 with what was a 4.3% yield. We would be interested again if it returns to the high $50s. Thomson Reuters has a consensus price target of $66.70.

If you want to receive the full 24/7 Wall St. 2012 Model Dividend Portfolio, it is being offered in full, with more than 10 different stocks, to those who sign up for our free daily email subscriber list 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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For those investors seeking a more diversified strategy in the world of REITs for above-market yield, there is the SPDR Dow Jones REIT (NYSE: RWR). If we add up the last four dividend payments for the $2.03 paid out as income, then the implied yield based on a $64.00 price, we get almost a 3.2% dividend yield. It still beats Treasury yields by far, but at $64.00 its 52-week trading range is $52.32 to $70.26.

Read Also: High Dividends (Distributions) Outlook for Top MLPs in 2012

JON C. OGG

Aetna, Inc. (NYSE: AET) named Bull of the Day at Zacks.
Big Lots Inc. (NYSE: BIG) Cut to Equal-Weight at Barclays.
CIT Group Inc. (NYSE: CIT) Started as Hold at Jefferies.
Focus Media Holding Ltd. (NASDAQ: FMCN) Cut to Neutral at JPMorgan.
Gilead Sciences Inc. (NASDAQ: GILD) Cut to Hold at Argus.
JA Solar Holdings Co., Ltd. (NASDAQ: JASO) Cut to Sell at ThinkEquity.
LDK Solar Co., Ltd. (NYSE: LDK) Cut to Sell at ThinkEquity.
McDermott International (NYSE: MDR) named as Bear of the Day at Zacks.
Micron Technology Inc. (NASDAQ: MU) Raised to Buy at Citigroup.
Senior Housing Properties Trust (NYSE: SNH) Raised to Buy at Stifel Nicolaus.
Veolia Environnement S.A. (NYSE: VE) Raised to Overweight at HSBC.
World Fuel Services Corporation (NYSE: INT) named value stock of the day at Zacks.

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JON C. OGG

We’ve also culled some stocks from today’s list because either they don’t pay a dividend — or pay a low dividend for a REIT — or the company has already surpassed its current median target price. The companies we’ve selected are Health Care REIT, Inc. (NYSE: HCN), Senior Housing Properties Trust (NYSE: SNH), UDR, Inc. (NYSE: UDR), Essex Property Trust Inc. (NYSE: ESS), Camden Property Trust (NYSE: CPT), RLJ Lodging Trust (NYSE: RLJ), Diamondrock Hospitality Co. (NYSE: DRH), The Howard Hughes Corp. (NYSE: HHC), and General Growth Properties Inc. (NYSE: GGP).

Howard Hughes Corp. is not a REIT, but its operations are a near-identical fit with those of the trusts. It does not pay a dividend, but its upside potential is significant and we include it here as a “quasi-REIT.”

All data from Yahoo! Finance, and share prices were collected in the early afternoon today.

Health Care REIT, Inc. (NYSE: HCN) has a median target price of $53.00 from 13 brokers. Shares are trading today at $49.61, for an implied gain of $3.39, or 7%. HCN’s forward P/E is 13.11 and the company pays a dividend yield of 5.6%. The stock’s 52-week trading range is $41.03-$55.21, and at today’s price that’s about 21% above its 52-week low and 10% below the 52-week high.

HCN today completed a secondary offering of 12.65 million shares priced at $50/share. The company raised $632.5 million, which it plans to use for future investment, to pay down debt, and for general corporate purposes. Shares had been trading near the target price in advance of the offering. The attractive dividend yield makes the stock worth considering.

Senior Housing Properties Trust (NYSE: SNH) has a median target price of $24.00 from 7 brokers. Shares are trading today at $21.27, for an implied gain of $2.73, or 13%. SNH’s forward P/E is 7.31 and the company pays a dividend yield of 7%. The stock’s 52-week trading range is $19.09-$24.66, and at today’s price that’s about 11% above its 52-week low and 14% below the 52-week high.

Senior Housing Properties pays the highest dividend of any stock in this group and there is still headroom a nice implied gain. The 52-week high is barely above the target price, which could indicate a target price boost soon.

UDR, Inc. (NYSE: UDR) has a median target price of $27.00 from 18 brokers. Shares are trading today at $24.31, for an implied gain of $2.69, or 11%. UDR’s forward P/E is 17.12 and the company pays a dividend yield of 3.2%. The stock’s 52-week trading range is $20.04-$27.26, and at today’s price that’s about 21% above its 52-week low and 11% below the 52-week high.

UDR has been able to raise its rents due to its strategy of buying apartment properties in cities where job growth is better than average and higher priced housing is performing better.

Essex Property Trust Inc. (NYSE: ESS) has a median target price of $145.00 from 20 brokers. Shares are trading today at $135.09, for an implied gain of $9.91, or 7%. Essex’s forward P/E is 20.9 and the company pays a dividend yield of 3%. The stock’s 52-week trading range is $105.60-$148.44, and at today’s price that’s about 28% above its 52-week low and 9% below the 52-week high.

Essex’s target price is lower than its 52-week high and its forward P/E is higher than average as well, indicating that the stock could be priced at very near its full value. The 7% implied gain is further evidence that expectations for growth are not all that rosy.

Low (or no) interest rates are here to stay for at least another two years and investors are being pushed out of the safe debt markets to go find investment income elsewhere.  You are being forced to take on risks for income.  We just showed how the high-yield bond funds and ETFs may have finally hit a floor as spreads reached astronomic levels.

24/7 Wall St. tracks a myriad of dividend stocks and on August 11, 2011 our “Great Dividend Portfolio” was released.  At the time, the 10-Year Treasury yield was about 2.14% and our average dividend yield in the ten-company portfolio was a whopping 5.5%.  That yield is now about 5.3% due to price appreciation and the DJIA has risen about 4% since then.

The high-yield dividend winners are as follows: Altria Group Inc. (NYSE: MO); American Electric Power Co., Inc. (NYSE: AEP); American Water Works Company, Inc. (NYSE: AWK); AT&T, Inc. (NYSE: T); Digital Realty Trust Inc. (NYSE: DLR); Enterprise Products Partners LP (NYSE: EPD) or Kinder Morgan Energy Partners LP (NYSE: KMP); 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).

All of these ten dividend leaders are trading higher than they were in August, and some are up well over 10% and still offer high implied dividend yields.  We are actually approaching levels now where some of these portfolio positions may need to be reviewed.  Our aim is to find dividends which are safe, but we have to also adjust for issues around projected upside to price targets, market performance, and the ability to continue dividend growth even in choppy times.  If we have grown less enthusiastic or more cautious on these names, we have noted at the end of each summary.

24/7 Wall St. tracks a myriad of dividend stocks, and we have looked through the price performance, compared them to peers, and done a valuation dive to determine which are the safest of the high-yield stocks out there today.  Our list of high-yield dividend winners includes the following: Altria Group Inc. (NYSE: MO); American Electric Power Co., Inc. (NYSE: AEP); American Water Works Company, Inc. (NYSE: AWK); AT&T, Inc. (NYSE: T); Digital Realty Trust Inc. (NYSE: DLR); Enterprise Products Partners LP (NYSE: EPD) or Kinder Morgan Energy Partners LP (NYSE: KMP); 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).

If you use the average yield of this basket it actually comes to about 5.5%.  That is a phenomenal portfolio yield considering that the yield of the 10-Year Treasury auction just went off at 2.14%.  Chasing yields is a tricky game because not all dividends are alike and not all dividends are safe.

Our aim is to find dividends which are not only considered to be safe.  We think every one of these businesses can grow their dividends through time and some of these companies even classify as “value stocks” that investors seek when looking for havens in rough markets.

Altria Group Inc. (NYSE: MO) recently closed at $24.53 and its 52-week trading range is $22.15 to $28.13.  Its market cap is $50.4 billion and the shares trade at 11.2 times forward earnings.  The company’s return on equity is 74.4% and the latest dividend yield was 6.2%. With Obama and Boehner both being smokers, maybe this ultimate continued-surprise winner is truly immune from Washington D.C.  The state penalty issues have mostly been resolved, with a few exceptions.  Also in the favor of Altria is that juries seem to no longer award cases for smokers “who got duped into smoking and were told smoking didn’t kill you” in the case.  Altria carries almost no currency risk for its core tobacco business.  It also holds a stake in SAB/Miller.  That dividend has never wavered.

American Electric Power Co., Inc. (NYSE: AEP) recently closed at $34.27 and its 52-week trading range is $33.09 to $38.99.  Its market cap is $16.5 billion and the shares trade at 10.6 times forward earnings.  The company’s return on equity is 9.0% and the latest dividend yield was 5.4%.  Low interest rates work hugely in the favor of power companies.  AEP has a blend of power sources for its client base, it covers millions of Americans in many states, and is now cheap compared to the market and cheap against many peers.  AEP is due soon for yet another dividend hike and this company is very proactive when it comes to protecting the dividend.

American Water Works Company, Inc. (NYSE: AWK) recently closed at $26.82 and its 52-week trading range is $21.72 to $30.70.  Its market cap is $4.7 billion and the shares trade at 14.5 times forward earnings.  The company’s return on equity is 7.0% and the latest dividend yield was 3.6%.  This is the best water stock out there and it is extremely rare that this water utility is off by more than 10% from highs.  The company has said that it can keep raising its dividend and it seems to be unstoppable.  As a utility, it benefits greatly when interest rates are so low as it can borrow on the cheap and has the franchise to lock in low-rate borrowing for the long-term.

The Centers for Medicare & Medicaid Services has issued a final rule that cuts Medicare skilled nursing facility Prospective Payment System payments by 11.1% in FY 2012 by $3.87 billion. The cuts are listed as being to “correct for an unintended spike in payment levels and better align Medicare payments with costs.”

The 2012 recalibration will result in a reduction of 12.6% to skilled nursing facility payments of $4.47 billion, but this would be partially offset by the FY 2012 update with an increase of 1.7% to Medicare payments to skilled nursing facilities.  This reflects a market basket of goods and services reduced by a 1% multi-factor productivity adjustment mandated by the Affordable Care Act.

A 2.5% increase for hospice reimbursement is not going to be anywhere close to offsetting the losses here.

Kindred Healthcare Inc. (NYSE: KND) is in three segments of hospitals, health services, and rehabilitation.  It gets somewhere close to 30% of its revenues from this segment being cut.  Its stock opened down at $14.06 and shares are down almost 27% at $13.77 versus a 52-week range of $11.52 to $28.99.

Sun Healthcare Group Inc. (NASDAQ: SUNH) may have its entire profits gone or at risk now as it has awful exposure here.  Its shares opened down at $3.21 versus a $7.00 close.  Shares are now down a total of 55% at $3.13 and its shares hit a low so far of $3.10 (52-week low) versus a 52-week high of $15.01.

Skilled Healthcare Group Inc. (NYSE: SKH) operates skilled nursing facilities, as well as assisted living facilities, hospice service providers, home health providers, and a rehabilitation therapy business. Its stock is down a sharp 37% at $5.44 after opening at $6.61 this morning.  Its 52-week trading range is $2.33 to $15.93.

Five Star Quality Care Inc. (NYSE: FVE) operates senior living communities via independent living or congregate care communities, assisted living communities, and nursing facilities, is down “only” about 8% at $4.55 versus a 52-week trading range of $3.50 to $8.95.

Sunrise Senior Living Inc. (NYSE: SRZ), which offers senior living services and independent living services, is down only 3% at $8.53 against a 52-week range of $2.18 to $12.44.

National Healthcare Corporation (NYSE: NHC) operates and manages long-term health care centers, and associated assisted living and independent living centers.  Its stock is down 12% at $41.78 against a 52-week range of $33.51 to $53.08.

Amedisys Inc. (NASDAQ: AMED) is in home health and hospice services and its shares are down 3% at $25.08. Almost Family Inc. (NASDAQ: AFAM), a home health provider, is down 3.7% at $24.33.

Senior Housing Properties Trust (NYSE: SNH) is a REIT in hospitals, nursing homes, senior apartments, independent living properties, and assisted living centers.  Its shares are also down today by 2.4% at $23.37 versus a 52-week range of $20.42 to $25.28.

Here is what is interesting about this move… This was “pre-budget deal.”  If you think that Medicare and Medicaid payments are the only ones at risk in the weeks, months, and years ahead, you might want to think again.  Cuts will be coming for a myriad of reasons and from many angles.  Companies which rely heavily or solely on government contracts for goods and services are all under more scrutiny.

JON C. OGG

This morning came news that Senior Housing Properties Trust (NYSE: SNH) declared its regular dividend of $0.37 per quarter.  While this may not sound like much news on the surface, this $1.48 annualized payout generates a dividend yield of about 6.4% for dividend investors.  With shares at $23.10, the 52-week trading range is $19.25 to $25.28.  This marks the third consecutive $0.37 payout, which had been $0.36 for five consecutive quarters and compares to a $0.35 dividend which had been paid for seven consecutive quarters before that.

Senior Housing Properties is rather well diversified in geographic segments. One earthquake, one hurricane, or one local natural disaster is unlikely to topple the company.  It claimed some $3.8 billion in senior properties with some 27,000 living units located in 36 states.  It invests in hospitals, nursing homes, senior apartments, independent living properties, and assisted living properties.  Many of its properties are some of the larger centers of each type in local communities which you live in. 

This segment did not escape the recession entirely unscathed.  What happens when grandma and grandpa or your elderly parents are upside down in their house?  Chances are that they can’t sell the house to move into a retirement facility.  In 2008 this one saw its shares drop from $24.00 down to under $11.00 at the peak.  It was not until mid-2009 that shares got back above $20.00.  Amazingly, the REIT never cut its dividend and the times when this one gets hit hard have proven over and over to be great opportunities.

With the aging population of America, with the baby boomers finally starting to reach retirement age, and with that age group being more well off than their kids, this sector at least has the demographic trends to look forward to.  With a 6.4% dividend yield to boot, this one offers solid investing dividends for old folks from old folks.

JON C. OGG