The Dow Jones Select Dividend Index (DVY), which
serves as the benchmark for the model portfolio, is on
the verge of ending its five-week losing streak. The
story in the U.S. stock market over the past two weeks
has been the continued battle between reports of slower
economic growth and the willingness of the Federal Open
Market Committee (FOMC) to continue an accommodative
We recently swapped General Dynamics (GD:NYSE) for
Lockheed Martin (LMT:NYSE) in the model portfolio and
continue to be on the lookout for new names. One such
name that recently hit our radar screen is Las Vegas
Sands (LVS:NYSE). The gaming operator generates solid
cash flow, but the dividend yield has moved above 3.1%,
as the stock has dropped 19%, year to date. As usual, we
will alert readers before we make any trades for the
Campbell Soup (CPB:NYSE) announced mixed quarterly
results on Sept. 8. The company earned $0.49 a share in
the fiscal fourth quarter (ended July), which matched
expectations. Revenue increased 7%, year over year, to
$1.85 billion, but fell just short of the consensus
Organic sales fell 2% in the period due to lower demand
for packaged foods. Elsewhere, management said that
rising input costs and promotional spending were offset
by increased productivity in the quarter.
The stock fell 2% over the past two weeks and it was
recently changing hands around $44.02. Despite facing
some headwinds, Campbell has a solid balance sheet and we
believe that management can raise the dividend in the
coming months. In the meantime, we continue to favor the
shares for the 2.9% yield.
ConocoPhillips (COP:NYSE) fell nearly 3% over the
past two weeks with the recently changing hands around
$78.92. The shares have dropped along with the underlying
price of crude oil and have now fallen 10% from July
highs. But on Sept. 9, t Bank of America/Merrill Lynch
upgraded the stock from Underperform to Neutral.
We assert that the 3.7% dividend yield is secure and view
this decline as a buying opportunity for readers who do
not yet own the stock.
KLA-Tencor (KLAC:Nasdaq) added nearly 3% to recent
gains over the past two weeks with the shares recently
changing hands around $78.66. The stock touched a new 14-
year high earlier this week and is now trading 60% above
our initial purchase. Even so, we continue to favor the
company for its 2.6% dividend yield.
David S. Peltier
We are closing out our position in General Dynamics and opening a new holding in Lockheed Martin. Here are the details.
Free Open House begins today.
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