NEW YORK (TheStreet) -- For the week of September 3, you can expect about 50 companies will report earnings. As usual, the services and technology sectors make up the lion's share of volume.
I selected companies with the greatest market-moving impact that you will want to watch. September and October have traditionally displayed higher-than-average volatility and earnings can often light the fuse.
H&R Block is anticipated to report good first-quarter earnings after the market closes on Sept. 5, 2012. The consensus estimate is currently a loss of 37 cents a share, an improvement of sorts from the loss of 39 cents during the same period a year ago. The average analyst target price for HRB is $18.50.
From a technical perspective, the chart on HRB looks a lot better than the quarter's estimate. The tax preparer is expected to earn $1.62 this year ending in April 2013. H&R is somewhat trending higher. The 60- and 200-day moving averages are moving higher. The 90-day is rounding out, but still well below the 200. What this means is the trend is neutral and akin to a boat without a rudder.
The mean fiscal-year estimate price-to-earnings ratio is 10.3, based on earnings of $1.61 per share.
Investors are receiving 80 cents in dividends for a yield of 4.83%. Over the last five years, the dividend has grown by an average of 5.7% per year. For yield hounds, H&R's dividend is attractive, but the payout rate near 80% along with slowing revenue growth means future hike expectations may not be realized. Of course, at 4.8% you could say "who cares if they increase."
The current proportion sold short, based on the float, is 6.9%. With the dividend yield as high as it is, short sellers are expecting a sizable drop in share price.
Background: H&R Block is a tax-return preparation company. The company's subsidiaries also offer investment services and through broker-dealers, originate, purchase, service, sell and securitize mortgages, offer personal productivity software, purchase participation interests in refund anticipation loans made by a third-party lender, and offer accounting, tax and consulting services to business clients. H&R Block trades about 3 million shares per day with a marketcap of $4.5 billion.
For more about H&R Block, take a look at John Reese's
Opt to Get Paid article on
. He describes why he likes H&R, and how he compares this stock to other high-yield stocks.
Investors are looking forward to improving second-quarter earnings before the market opens on Sept. 5, 2012 The consensus opinion is presently 64 cents a share, a progression of 12 cents (18.8%) from 52 cents during the corresponding period last year.
13 out of 18 analysts rate Dollar General a buy. The average analyst target price for DG is $59.33. Dollar General has found retail success in the face of an evergrowing
. Market share between the two is often in the media. Other competitors include
Family Dollar Stores
Dollar's ability to compete against Wal-Mart is effective enough to give Dollar a premium over Wal-Mart on an earnings basis. The mean fiscal-year estimate price-to-earnings ratio is 17.8, based on earnings of $2.81 per share this year.
While, not the worst it could have been, the shares still lost 2.7% in the last month. The last reported short interest is inconsequential at 1.9%.
Background: Dollar General is a discount retailer. The company separates its merchandise into four categories, which includes highly consumable, seasonal, home products and basic clothing. The company was founded in 1939 and trades an average of 3.2 million shares per day with a marketcap of $16.6 billion.
Strong second-quarter earnings growth is expected by Wall Street before the market opens on Sept. 7, 2012. The consensus mean is 49 cents a share, a gain of 8 cents (16.3%) from 41 cents during the corresponding quarter last year. Estimates range from 46 cents up to 53 cents.
I believe Kroger beats by at least a penny. Gas and food inflation may be here now, but most of last quarter was mild. Keep a close eye on guidance because the future outlook will impact Kroger more than last quarter's results.
Last quarter, Kroger crushed expectations, reporting 78 cents, six cents higher than expected. Analysts remain bullish with a price target of $26.
Retail grocery is a tough business as
investors can attest. With major retailers like Wal-Mart,
adding competition, it's easy to wonder how grocers can make it.
Whole Foods Market
is the darling on Wall Street for grocers. Whole Foods has so far done what others haven't mastered, competing against the big guys like Wal-Mart.
After flirting with the 200-day moving average in June, Kroger's stock has slumped into a bearish trend. The 90- and 200-day moving averages are both trending lower and the suspension of Supervalu's dividend in July sent Kroger's shares lower in sympathy. The market clearly overacted after the Supervalue dividend cut, but until Kroger is able to trade above $23, the bearish trend will likely continue.
Is Kroger at risk for lowering or halting its dividend? It doesn't appear so at this time. Cash flow and profitability easily support the current 2.1% yield (46 cents). The payout is less than half the company's profits. In fact, over the last five years, the dividend has grown by an average of 17.1% per year. The last increase came last year.
Kroger isn't that cheap to me. The mean fiscal-year estimate price-to-earnings ratio is 9.3, based on earnings of $2.38 per share this year. Historically an earnings multiple under 10 is very cheap, especially for a dividend payer, but with companies like Wal-Mart and Target trading at a premium of only 30%, it's not easy to make the case to buy Kroger over the dominant players without fully understanding the space.
Shareholders receive 46 cents annually in dividend payments. The yield based on a recent price is 2.07%. Over the last five years, the dividend has grown by an impressive average of 17% per year.
Kroger's short interest based on the float is small at 2.3%.
Background: Kroger Company is one of the larger grocery retailers (about 2,400 stores in 31 states) in the United States. The company also manufactures and processes food for sale by its supermarkets. Kroger trades a recent average of 4.2 million shares per day with a marketcap of $12.1 billion.
VeriFone Systems (PAY) 52-Week High: $55.89 52-Week Low: $30.10 Book Value: $11.54Price-To-Book: 2.88
VeriFone is anticipated to report better third-quarter earnings after the market closes on Sept. 5, 2012. The consensus estimate is currently 62 cents a share, an improvement of 22 cents (35.5%) from 40 cents during the same period last year.
Eight of the 13 analysts covering the company give a buy recommendation. The average analyst target price for PAY is $46.27.
The trailing 12-month price-to-earnings ratio is 18.4, the mean fiscal-year estimate price-to-earnings ratio is 14.9, based on earnings of $2.32 per share this year.
The current proportion sold short based on the float is an uncomfortable 9.4%. That's a considerable amount of smart money betting VeriFone faces more downside pressure. If shorts are wrong, VeriFone is a short-squeeze candidate.
Background: VeriFone is a global leader in secure electronic payment technologies. VeriFone delivers solutions that add value to the point of sale. VeriFone is specifically designed to meet the needs of vertical markets including financial, retail, petroleum, government and health care. VeriFone trades a recent average of 2.9 million shares per day with a marketcap of $3.7 billion.
PAY Earnings Per Share
I use SEC.gov, Zacks.com, WSJ.com, Tradestation, and Reuters for my data. PE is generally adjusted PE based on an average number of shares.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.