Dividend.com: Sara Lee's Got Flour Power

Time to Pop in Some Sara Lee Shares

Sara Lee's(SLE Quote) earnings report was actually not as bad as first reported. If you back out some charges, the company actually beat EPS estimates by 2 cents. Sales rose 12 percent to $3.51 billion with the help of a weaker dollar and price increases.

Management is affirming 2009 earnings per share numbers of 90 cents to 98 cents per share. The company is currently trading at 14 times earnings, and has a 2.89% dividend yield, based on last night's closing stock price of $14.52.

We are upgrading the shares of Sara Lee to our Recommended list. We believe that rising commodity costs may start to dissipate, which would benefit profit margins, and more importantly, the shares of Sara Lee.

Smith & Nephew Reaches $1 Billion in Sales for First Time

Medical device maker Smith & Nephew(SNN Quote) has achieved its first billion-dollar quarter ever, on a 23% rise in revenue. The company is reporting solid performance across all its divisions.

The Reconstruction unit delivered revenue growth of 8%. Orthopaedic Trauma had 5% revenue growth. Its Endoscopy division had double-digit growth. The company reaffirmed its full-year guidance as well, with consensus estimates set for an EPS of $3.53 for next year.

We are beginning to warm up to SNN shares a bit, but we're holding off on adding the name to our "Recommended" list. The company's shares are in the middle of its 12-month trading range of $52-$68 and are trading at 18 times 2009 estimates. We'd like to see the shares' reaction to the quarter and monitor the news flow a bit more. The company has a dividend yield of 1.33%, based on last night's closing stock price of $55.58.