Dividend.com: Don't Take Visa (Updated)

Editor's note: With this article, TheStreet.com introduces Dividend.com, a financial services Web site focused on providing comprehensive dividend stock coverage and ratings.

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Updated from 3:28 p.m. EDT

We removed credit card giant Visa(V Quote) from our "Recommended" dividend stocks list. Our downgrade was based mainly upon the slowing consumer market and Visa's recent poor stock performance.

Visa has seen its shares lose nearly 26% in the last two months, with investors concerned about consumer weakness. The company makes its money from credit-card transaction processing, as opposed to making loans, so they've been able to avoid a lot of the debacle afflicting the financial services sector.

We believe investors may be better positioned in shares of MasterCard. Comparing the two from a valuation standpoint, MasterCard trades at 21 times 2009 earnings estimates, as opposed to 28 times 2009 earnings for Visa. These are two great brands, but for now, we'll stick with just MasterCard(MA Quote). Visa has a 0.61% dividend yield, based on last night's close of $68.42. Investors should be patient and look for a better entry point on Visa. We'll be sure to tell you when we see it!

Investors Looking to Check Out of Host Hotels

Host Hotels & Resorts (HST Quote) is continuing the streak of lackluster performances coming out of the hotel and lodging sector. The slowdown in travel and cutbacks among corporate stays is hurting the entire industry.

The company, which operates 118 properties, earned $753 million in 2007, down 11% from 2006. Host Hotels lowered their funds from operations to $1.75-$1.85 per share for the full year. Analysts had pegged profits of $1.88. Funds from operations (FFO), which adds such items as amortization and depreciation back to net income, are what analysts use most to gauge the strength of a real estate investment trust.