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Dividend.com: HSBC Strapped, Analyst Says

Tom Reese and Paul Rubillo

HSBC Holdings (HBC Quote) shares are down nearly 9% so far Wednesday, after a Morgan Stanley analyst said HSBC needs to raise between $20 billion and $30 billion in capital moving forward.

The analyst maintains that HSBC's Hongkong and Shanghai Banking division has one of the lowest reserves of any Hong Kong bank, and needs an extra $5.8 billion. After pumping $11 billion into its U.S. and U.K. businesses, the analyst sees little left as far as further liquidity is concerned.

We removed shares of HBC from our "Recommended" list back on Aug. 21, when the stock was trading at $77.37. The company has a 7.85% dividend yield, based on last night's closing stock price. The company's current dividend payout would certainly be in jeopardy if there is indeed a need for further capital.

The stock has broken to all-time lows on the technical side. If the shares can firm up at some point, we see the $52-$56 levels as an initial overhead resistance zone. We would look elsewhere for better investment opportunities at this time.

HSBC Holdings is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.

Oracle Cutting Jobs

Sources are reporting that Oracle (ORCL Quote) is on the verge of laying off 500 North American sales and consulting employees this Friday.

Oracle has more than 85,000 employees, so this number of cuts would be relatively small considering recent efforts by companies to rein in technology spending.

Shares of ORCL held up better than most other tech plays, dropping about 20%.

The stock does need to hold the $15 support level on any downdraft. If it doesn't, then a retest of the 2002 lows of $8-$10 a share is possible. If the stock can firm up, we see $18 and $19 as levels of overhead resistance. We do not currently rate this non-dividend paying stock, but we do monitor the company's news.

Oracle Corp does not currently pay a dividend.

VF Slashes 2009 Profit Goal

VF (VFC Quote) shares are bouncing off of earlier lows after announcing that pension expenses would lower 2009 earnings and revenue results.

The company says higher pension costs of about $90 million will pull profit down by about 50 cents per share. Management said that fourth-quarter revenue will now fall 2%, instead of previous guidance for a rise of 3% to 4%. The company sees fourth-quarter EPS of $1.30-$1.35, below the $1.46 estimates.

We removed shares of VFC from our "Recommended" list back on Oct. 6, when the stock was trading at $72.41. The company has a 4.65% dividend yield, based on Tuesday night's closing stock price of $50.74.

The stock has technical support in the $36-$38 price area. If that fails to hold, we could see the $29-$30 levels. On the flipside, if the shares can firm up, we see the $57-$62 levels as overhead resistance.

The company has many top brands, but we would like to see shares stabilize a bit before taking a step into the name.

VF is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

Linear Technology Second-Quarter Profit Drops Linear Technology (LLTC Quote) shares off about 3% so far today, after reporting that its second-quarter profits fell 10% to $84.2 million, or 38 cents per share, from $93.8 million, or 41 cents per share, a year earlier.

Management said the company experienced weakness in its bookings throughout the quarter, and is taking steps to rein in costs by reducing staff, closing plants and limiting operating expenses.

Looking ahead, the company says third-quarter revenue will be down in the 15% to 20% range compared with the second quarter. On a positive note, the company raised its quarterly dividend to 22 cents per share from 21 cents per share.

The dividend will be paid Feb. 25 to stockholders of record on Feb. 13.

We removed shares of LLTC from our "Recommended" list back on Aug. 22, when the stock was trading at $32.89. The company has a 3.89% dividend yield, based on Tuesday night's closing price of $22.60.

The stock has technical support in the $14-$17 price area. If the shares can firm up and begin to move higher, we see initial overhead resistance around $25-$27. We would look elsewhere for better investment opportunities at this current time.

Linear Technology is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.