Dividend.com: Ikon Wooed by Ricoh
Tom Reese and Paul Rubillo
08/27/08 - 02:23 PM EDT
Ikon Office Solutions Gets Takeover Offer from Ricoh
Ikon Office Solutions(IKN Quote) is the object of copier giant Ricoh's eye. Ricoh Co. announced it will be paying $17.25 cash for each Ikon share, a premium of 11% to Tuesday's close of $15.56.
This acquisition continues a trend we have been seeing, in which office equipment makers have been acquiring distributors to strengthen their sales channels and product offerings. Ikon has 400 sales and services mainly in Europe and the U.S. Ricoh had recently acquired the European operations of copier service and supply company Danka Business Systems.
This is a solid offer in place, but we have added the shares of Ikon Office Solutions to our recommended list, as the possibility of another bidder jumping into the fray is a possibility. The company has a dividend yield of 1.03%, based on Tuesday's closing stock price of $15.56.
Ikon Office Solutions is a recommended dividend stock, holding a Dividend.com Rating of 3.5 out of 5 stars.
Talbots Reports Progress in Cutting Expenses
Talbots(TLB Quote) is starting to achieve the cost-cutting results that the company has been seeking.
The company said it reduced total company inventory by 22% by the end of the second quarter, as well as closed 30 stores covering its children's and men's lines. There will another 35 stores closed by mid-September.
Same-store sales dropped 12%, with an 11.7% decline for Talbots' brand stores and a 13.2% drop for the company's J. Jill division.
Talbots has been a volatile name of late. The company does have a 5.2% dividend yield, based on Tuesday's closing stock price of $10. We think the turnaround story here has potential and will be putting the stock on our upgrade watch list. In the meantime, we will monitor the stock's progress.
Talbots isn't a recommended dividend stock at this time, holding a Dividend.com rating of 3.4 out of 5 stars.
Dillard's Losses Mount, Closes More Stores
Dillard's(DDS Quote) reported another tough quarter, as the company lost $38.3 million, or 51 cents a share. Revenue fell to $1.65 billion from $1.69 billion a year ago.
Management reported sales in the juniors' and children's apparel categories -- as well as the home and furniture category -- were significantly below trend during the period. The company is committed to aggressively closing underperforming stores. During the past quarter, the company closed four stores -- and is scheduled to shut eight more.
We would avoid bottom-fishing this retailer's stock, even though the company is making the right moves in cutting down the underperforming stores. We prefer names like
J.C. Penney(JCP Quote) and
Macy's(M Quote) in this space. Dillard's has a 1.4% dividend yield, based on Tuesday's closing stock price of $11.37. We'll monitor the company's progress and see if a turnaround plan can help the company gain some traction.
Dillard's isn't a recommended dividend stock at this time, holding a Dividend.com rating of 2.8 out of 5 stars.
Eli Lilly Drops on Drug Deaths News
Eli Lilly(LLY Quote) is down Wednesday on news of four patient deaths that were taking diabetes drug Byetta, a drug developed with partner
Amylin Pharmaceuticals(AMLN Quote).
The initial report has analysts concerned that this development may have an effect on Byetta prescriptions growth in the near term. Both companies said the four patients who died had pancreatitis, but most likely died of other medical conditions. The Food and Drug Administration reported two similar deaths from acute pancreatitis last week. The FDA is now planning a stronger warning for Byetta's label.
This is unfortunate news, and should have much more of an effect on Amylin than Eli Lilly. Eli Lilly has a deeper pipeline and doesn't rely on one drug like Amylin. Ely Lilly has had major success with popular drugs like Zyprexa, Cialis, and Cymbalta, just to name a few. The stock has a 4% dividend yield, based on Tuesday's closing stock price of $47.02. We would urge investors not to panic on this news, and to stick with shares of Eli Lilly here.
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Eli Lilly is a recommended dividend stock, holding a Dividend.com Rating of 3.5 out of 5 stars.
