Ex-Dividend Stocks: Goldman Sachs, Time Warner

Nordstrom

The retailer reported on May 10 first-quarter earnings of $149 million, or 70 cents a share, up from year-earlier earnings of $145 million, or 65 cents a share.

"Nordstrom, Inc. (JWN-NYSE) continues to use its strong financial performance to reinvest in the business," KeyBanc Capital Markets analysts wrote in a May 11 report. "1Q's EPS of $0.70 missed our $0.74 estimate and the $0.75 consensus view. Management was crystal clear on the 4Q11 call that 2012 will be a period of investment; earnings estimates clearly got ahead of themselves as it became apparent that comp performance would remain strong. Interestingly, the Company titled its press release 'Nordstrom First Quarter 2012 Earnings in Line with Company Expectations' a notable departure from the perfunctory 'Nordstrom Reports X Quarter Earnings'. This is a not-so-subtle reminder that earnings growth during this investment year will be more muted, particularly as the Company makes heavy investments in ecommerce. We are modestly tweaking our 2012 EPS estimates, but leaving our $65 price target (implying an 18.9x 2012 P/E, compared to 13.4x P/E for the department store peer group) unchanged. We continue to have a bias toward domestic retailers and believe that Nordstrom will continue to take market share."

Forward Annual Dividend Yield: 2.2%

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Harley-Davidson

The motorcycle company reported on April 25 first-quarter earnings of $172 million, or 74 cents a share, up from year-earlier earnings of $119.3 million, or 51 cents a share.

"Reaffirming our Outperform rating as 2013 visibility is enhanced with strong YTD (early May) retail sales," Wells Fargo analysts wrote in a May 8 report. "Our April/early May channel checks indicate U.S. retail sales up low double digits. We estimate ongoing retail strength and restructuring/ERP implementation capacity constraints will prevent Harley from replenishing U.S. channel inventories (estimated ~5,500-7,000 units below desired levels) until the end of 2013. This also provides some downside protection should global economic conditions deteriorate. Clearly, near-term keys will be (1) ongoing solid retail demand, (2) smooth final implementation of restructurings/ERP in 2012 (York) and 2013 (remaining facilities). Likely gradual shifting of model year-end from June to September should enhance long-term sales efficiency and margins. Revising our 2012E/2013E EPS to $2.80/$3.77 (prior $2.81/$3.59) or $2.96/$3.78 ex-restructurings (prior $2.96/$3.60 ex restructurings) reflecting (1) higher retail sales and shipment assumptions, and (2) gross margin estimate adjustments. $58-61 valuation range (prior $54-57) is based on about 14x "normalized" 12.31.12 present value $4.23 EPS. Bottom Line: We would use market weakness to continue building positions in HOG."

Forward Annual Dividend Yield: 1.4%

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