All Aboard Union Pacific
ran over Wall Street's estimates by 10 cents in the second quarter, on a revenue rise of 13%, to $4.57 billion. The company has been a big beneficiary of the agriculture boom. Shipments of agricultural products jumped 29%.
Revenue for energy-related products, such as coal and wind turbines, jumped 21 percent. The company performed very well despite paying an average for fuel of $3.60 per gallon, compared with $2.20 in 2007.
For dividend investors, Union Pacific has been a good performer, up more than 25% in the last 12 months. We like the shares and its 2.28% dividend yield (based on last night's closing price of $77.33).
Despite Tough Quarter, Investors Still in Good Hands With Allstate
felt the pinch of catastrophic losses in the second quarter. Allstate came in with $698 million in pretax catastrophe losses for the quarter from 43 severe-weather events, up from last year's 34 events and $433 million loss.
One positive note to focus on is that Allstate's combined ratio was flat at 84.1%. Combined ratios measure the amount of money insurers pay out in claims and expenses compared with how much they receive from writing new business. A number of 100 means the insurer pays out an equal amount in claims and expenses than it takes in from writing new premiums. That is a huge measure of an insurer's prospects and business execution.
For investors, we like Allstate here and its 3.55% dividend yield, based on last night's closing stock price of $46.17. Any weakness off this report would be an opportunity to get a great brand at a low valuation of seven to eight times 2009 earnings estimates.
Daimler's Chrysler Mess Hits the Quarter
is still being hampered by its poor decision to buy Chrysler almost 10 years ago. Management is confident, however, that its divisions will be able to achieve their unit sales targets for full year 2008, although the company has lowered its earnings outlook.
Daimler is citing restructuring expenses and declining values of Chrysler cars, as well as the rising cost of raw materials, such as oil and steel. Throw in a stronger euro and a global slowdown, and the kitchen sink is all that's left. We have not liked the auto sector in general, and despite Daimler's 4.77% dividend yield (based on last night's closing price of $66.64), we would still avoid the shares at current levels. Factoring in today's decline, shares are down over 30% in the last 12 months.
Post-It -- 3M Beats Estimates
beat earnings estimates by 4 cents a share, as revenue rose 10% to $6.74 billion. The company has quite an array of different businesses, from industrial products such as chemicals used in aircraft maintenance, to office goods like Post-it notes and Scotch Tape.
Shares of 3M are down about 21% in the last year, but the stock has begun to pique our interest. 3M is at the low end of its $67-$97 range, and its dividend yield is 2.82% (based on last night's closing price of $70.80).
If these shares fall any further, we will take a serious look at putting this well-known brand on our "Recommended" list. For now, dividend investors looking for a diversified stock play should take a look at one of our current recommendations,
Investors Get Hurt, Can They Afford to Miss Work?
came in a bit light on the EPS number today. The company is guiding to a range of $3.86 to $3.98 per share, below analysts' estimates of $4. Sales were up 15% to $4.34 billion, which was in line with expectations.
Aflac is the world's largest seller of supplemental disability insurance. Japan is one of the biggest markets for Aflac, and the Japanese yen currency (which has been gaining strength against the dollar) is a factor when looking at the revenue. We still like Aflac as a company and a highly recognizable brand. Management has consistently raised dividends, and we think a pullback below $55 is a good place to start picking away for an investment.
Aflac has a dividend yield of 1.59%, based on last night's closing price of $60.32.
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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.