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TheStreet Open House

Dividend.com: Linn Gets a Boost

Linn Energy Gets Barron's Pop Linn Energy (LINE) shares are up today after a positive weekend piece in Barron's.

Barron's believes recent concerns about the oil and gas driller are probably unwarranted, despite the tight capital markets, which could make it hard for the company to continue to make acquisitions. The article highlights the master limited partnership's ability to continue its recent dividend payout, with management's hedging to lock in the high prices of last summer's energy price bubble for the next several years.

We have avoided shares of Linn since our early June coverage began, when the shares traded at $23.78. The company has a 21.04% dividend yield, based on Friday's closing stock price of $11.98. We have seen numerous pundits mentioning this particular dividend play, but it has not panned out well. We continue to avoid the shares here, until we get a sense of stabilization in the shares and oil prices as well.

Linn Energy is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.



Rohm & Haas Shares See Fallout from Dow Chemical-Kuwait Deal Collapse

Rohm & Haas (ROH) shares are down nearly 20% after news of the Dow Chemical (DOW) joint venture collapse with Kuwait.

Rohm & Haas management contend that its deal is not contingent on the Dow Chemical/Kuwait venture, but Wall Street sees otherwise with the shares of Rohm getting hammered today.

We are not sure if this means an end to the deal specifically, but there is a possibility that the closing price may need to be renegotiated possibly. Regardless, we had removed shares of Rohm back on Sept. 15, when the stock traded at $74.41. We had them on the list back from July 10 at $44.83. We felt the risk/reward made it wise to take the name off the table with little upside to be seen from that level. At this point, it's a coin-toss as to what may happen. We'll watch it closely and keep investors posted of any potential opportunity. The company has a 2.33% dividend yield, based on Friday's closing stock price of $63.56.

Rohm & Haas is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.



American Eagle Catches Post-Holiday Analyst Upgrade

Shares of American Eagle Outfitters (AEO) were up Monday after an analyst at Pali research initiated coverage of the stock with a buy rating.

The analyst believes the stock has priced in a weak 2009 and EPS may be close to bottoming. They have a 90 cent FY09 EPS estimate, which is 10% below the consensus estimates of 98 cents.

We removed shares of American Eagle from our "Recommended" list back on Sept. 29, when the stock was trading at $15.90. We had put it on the list one month earlier at a price of $15.05. The company has a 4.39% dividend yield, based on Friday's closing stock price of $9.12. This teen-apparel retailer started the year at the $21 level, and was dripping down throughout the year, eventually bottoming at $7 in mid-November. The stock has not bounced too much, and it faces significant overhead resistance in the $12 to $16 area. Long term, the stock has support in the $3.50 to $4 price area. We would look elsewhere for better investment opportunities.

American Eagle Outfitters is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.

Cal-Maine Profits Lay an Egg

Cal-Maine Foods (CALM) reported a 32% drop in second-quarter profit to $27.2 million, or $1.14 per share, down from $40.2 million, or $1.69 per share, a year ago.

The company said sales rose 7% to $238.3 million from $223.7 million last year. Management said there has been good demand for eggs at the retail level, but a declining demand for eggs from the institutional and food service sector. Management said feed costs, which are a big factor for the company, were lower than the previous quarter, but they still expect it to remain relatively high and volatile over the year ahead.

We had removed shares of Cal-Marine from our "Recommended" list back on Aug. 29, when the stock traded at $39.49. We had put them on the list on July 5, when the shares were trading at $32.20. The company has a 2.14% dividend yield, based on Friday's closing stock price of $29.48. The stock has technical support in the $20 price area. If that fails to hold, the $14 level could possibly come into play next. If the shares are able to stabilize and move higher, the $31-$32 price zone would be an area of overhead resistance.

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

At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.

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