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Dividend Stock Advisor

 Dividend Stock Advisor

On the Lookout for New Names

BY David Peltier | 09/11/14 - 12:52 PM EDT
Stocks in Focus: CPB, COP, KLAC

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 monetary policy.

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 model portfolio.

Earnings Review

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 analyst estimate.

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.

Company Updates

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.

Regards,

David S. Peltier

One Addition and One Subtraction
Stocks in Focus: GD, LMT

We are closing out our position in General Dynamics and opening a new holding in Lockheed Martin. Here are the details.

09/04/14 - 11:40 AM EDT
NFL Kickoff

Free Open House begins today.

09/04/14 - 07:54 AM EDT

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