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Dividend Stock Advisor

 Dividend Stock Advisor

Dividend-Paying Stocks Still Leading

BY David Peltier | 08/28/14 - 02:18 PM EDT
Stocks in Focus: CPB, GD, KLAC, PFE, SON, MO

Trading volume has dried up in the final days of summer, but U.S. stocks remain strong heading into the Labor Day holiday. Dividend-paying names continue to lead the way, and below we highlight several model portfolio names that made sizable gains over the past two weeks.

Earnings Preview

Campbell Soup (CPB:NYSE) is set to announce quarterly results on the morning of Sept. 8. The company is expected to earn $0.49 a share in the fiscal fourth quarter (ended July), up from $0.45 a year ago, on $1.87 billion of revenue. Management has exceeded the consensus analyst profit estimate for seven of the past eight quarters.

Campbell will host a conference call at 8:30 a.m. EDT that investors can access at 703-639-1316, using the passcode 1642451. A replay will also be available for two weeks at 703-925-2533, using the same passcode. The live call, a replay and presentation slides can be accessed at the company’s website: www.investor.campbellsoupcompany.com. On the call, we’ll be listening for any fiscal 2015 (ending July) guidance.

Ahead of the numbers, we continue to believe the stock is attractively valued at its recent price of $44.68 for the 2.8% dividend yield.

Company Updates

General Dynamics (GD:NYSE) shares added more than 3% to recent gains over the past two weeks and were recently changing hands around $123.47. The company announced that it had won two relatively small contracts in the period. The stock set an all-time high and Aug. 26 and is now yielding just 2%. We would consider booking our profits in General Dynamics into the next market rally, as the shares are currently trading 75% above our purchase price.

KLA-Tencor (KLAC:NYSE) moved more that 4% higher over the past two weeks with the shares recently changing hands around $76.37. Recent consolidation in the chip sector has led traders to speculate on the next potential takeover. We never buy a stock solely on takeover speculation, but we believe that the company is attractively valued at current levels for the 2.6% dividend yield.

Pfizer (PFE:NYSE) gained nearly 3% over the past two weeks and recently changed hands around $29.47. The company achieved multiple positive milestone in its clinical pipeline during the period. First, the company received approval from the Food and Drug Administration (FDA) for treatments of deep vein thrombosis and HIV-1, which was developed in partnership with other firms. Second, Pfizer has received fast-track status from the FDA for a vaccine for C. difficile-associated disease.

Elsewhere, Deutsche Bank initiated coverage of the company with a Buy rating on Aug. 27. We agree that the shares remain attractive to purchase at their current levels for the 3.5% dividend yield.

Sonoco Products (SON:NYSE) bought Germany-based Weidenhammer Packaging on Aug. 25 for $383 million of cash. The deal is expected add $0.09 to $0.15 a share to 2015 earnings and boost the company’s European exposure to more than 20% of total sales. The stock recently changed hands around $40.91 and we remain convinced that the stock is attractive to purchase for its 3.1% dividend yield.

Dividend Reminders

Altria (MO:NYSE) investors at the close of trading on Sept. 10 will qualify for the new quarterly dividend of $0.52 a share (4.9% yield), which is payable of Oct. 10. The shares were recently trading at $42.97.

Regards,

David S. Peltier

Altria Raises Quarterly Dividend
Stocks in Focus: MO

The company has increased its payout 48 times in the past 45 years.

08/21/14 - 02:09 PM EDT
Updating Four Holdings
Stocks in Focus: APD, MO, T, CPB, GD, MAT

As we use this low-volume period to conduct research, this issue includes four updates on model portfolio names and two dividend reminders.

08/14/14 - 02:48 PM EDT

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