Dividend.com: Estee Lauder Glam
Tom Reese and Paul Rubillo
08/14/08 - 01:32 PM EDT
Estee Lauder Makes Investors Look, Feel Good
Estee Lauder (EL) reported a solid double-digit sales increase this past quarter. The company's sales rose 14% to $2.01 billion from $1.76 billion.
International sales are booming, now representing 59% of the company's total revenue (up from 54% last year). Specifically, the company reported 21% revenue growth in both Asia and Europe. Management sees growth in emerging markets as a big driver of the earnings contributions. Mature markets like the Americas saw sales grow 4.2% to $3.71 billion.
We liked the company before this report, and we like it even more now. The ability to grow market share in the emerging markets is not an easy task, but management is executing its plan beautifully. The stock has a dividend yield of 1.22%, based on last night's closing stock price of $44.96.
Estee Lauder is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.7 out of 5 stars.
PMI Group Announces Sales of Australian and Asian Units
PMI Group(PMI) is receiving some positive buzz this morning. The company is in the process of selling its Australian mortgage insurance subsidiary, as well as its Asian mortgage business.
The company will sell its Australian mortgage insurance subsidiary to Australia's largest international general insurance and reinsurance group, QBE Insurance Group Ltd., for $920 million. QBE will also be buying PMI's Asian mortgage business, but not figures were given on that transaction yet.
PMI Group is one of several mortgage insurers that have had to pay claims to investors that hold mortgages which have defaulted or have gone through foreclosure. Although the sales of these units are positive steps, foreclosures are continuing to gain prevalence, and bottom-fishing in a stock like PMI is strictly for nimble traders, not long-term investors. We prefer to wait till we have a better grasp on a potential turnaround situation.
PMI Group is not a recommended dividend stock at this time, holding a Dividend.com rating of 2.2 out of 5 stars.
Briggs & Stratton Can't Jump Start Profits
Briggs & Stratton (BGG) came in with a downer of an earnings report today. The company reported sales that fell 14% to $581.1 million, citing lower shipments in the company's engine and power products segments.
EPS was 22 cents below expectations, and making the news even harder was the announcement that the company had to restate its results for the past three fiscal years because of several accounting errors.
Even though investors may get excited about the nearly 6% dividend yield (based on last night's closing stock price of $14.70), we would avoid bottom-fishing here. Briggs & Stratton could easily cut their dividend at any time in order to ease some of the company's cash outlay. We prefer a better-run company, and a leader in the field, like
Deere (DE).
Briggs & Stratton is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.3 out of 5 stars.
J.M. Smucker Spreads Joy to Investors
J.M. Smucker(SJM) hit the earnings results out of the park this past quarter. The company's revenue increased 18 percent to $663.7 million. The company, which also owns Jif Peanut Butter, Crisco Cooking Oil, and Pillsbury baking items, benefited from price increases across its product pipeline.
Management continues to push consistent investments in marketing and product innovation that will is designed to sustain the company's long-term profitable growth. The company also said the acquisition of the Folgers brand is near completion. The company expects to sales in the $1.5 billion area from the Folgers brand.
We really like the results J.M. Smucker delivered, and are upgrading the shares to our "Recommended" list this morning. The company was also able to reaffirm its EPS range of $3.45 to $3.50. J.M. Smucker Co.'s dividend yield is 2.38%, based on last night's closing stock price of $50.50.
J.M. Smucker Co. is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.5 out of 5 stars.
Can Flowers Foods Rise to the Occasion?
Flowers Foods (FLO) delivered a decent earnings report in an inflationary food environment. The company saw sales increase 13 percent in the quarter to $540.7 million. Margins declined slightly due to higher ingredient costs, but the company benefited from higher pricing and volume during the quarter.
Management is being aggressive on the acquisition front. The company completed deals with Holsum Bakery of Phoenix and ButterKrust Bakery of Lakeland, Fla., during the quarter.
We are removing Flowers Foods shares from our "Recommended" list on this announcement. We are fearful that acquisitions in this environment may be tricky, especially with food inflation being a big focus. The company also must prove it can seamlessly integrate new acquisitions without a hit to margins and control costs. Flowers Foods has a dividend yield of 1.56%, based on last night's closing stock price of $31.97.
Flowers Foods is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.4 out of 5 stars.
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