Ambac Financial Group Suspends Dividend
Bond insurance firm
announced late Wednesday that it will terminate its dividend payouts, effective immediately.
The company said the dividend suspension will save $11.5 million annually and help assuage its liquidity problems. The company had previously reduced its dividend to a penny per quarter.
Ambac stock is down over 94% on the year, as the company has struggled to stay afloat amid record losses and liquidity concerns. Back in November, Moody's cut its ratings on the bond insurer, citing several financial woes.
Due to the dividend suspension, we will henceforth be dropping coverage of Ambac.
AT&T Announces Plans to Cut 12,000 Jobs
announced Thursday that it plans to cut about 12,000 jobs, or 4% of its total workforce.
The company cited economic pressures, combined with a shifting business focus and a desire to streamline its organizational structure. AT&T is now focusing on its growing wireless phone business, as customers continue to shed traditional land-line phones in favor of mobile devices.
The company expects the job cuts to be realized throughout 2009 and will take a nearly $600 million charge associated with severance packages related to the layoffs.
Shares of AT&T fell 74 cents, or 2.5%, in early afternoon trading Thursday.
We began recommending AT&T on Oct. 28, at a price of $24.39. The company currently has a dividend yield of 5.5%, based on last night's closing price of $29.08.
The job cuts just keep on coming, with mroe than 1 million Americans losing their jobs to date this year. Consumers and businesses alike are curbing their expenditures, which will continue to affect many companies, which will need to cut expenses to make up for lower revenues.
AT&T is a recommended dividend stock, holding a Dividend.com rating of 3.5 out of 5 stars.
Capital One to Acquire Chevy Chase Bank
Credit card issuer and bank
Capital One Financial
announced Thursday it will acquire Maryland-based
Chevy Chase Bank
for $520 million in a cash-and-stock deal.
Reportedly, Capital One outbid rivals
, who were also said to be interested in acquiring Chevy Chase Bank, which sports more than $11 billion in deposits, $14 billion in assets, and over 1 million customers across the Washington, D.C., and Baltimore metro areas.
The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2009.
We removed Capital One from our "Recommended" list on Sept. 29, at a price of $54.55. The stock currently has a dividend yield of 4.75%, based on last night's closing price of $31.59.
These types of acquisitions are probably necessary for Capital One, which is looking to expand its deposit base and reduce its dependency on credit cards. The credit card business is expected to be extremely tough heading into next year, with consumers paring their spending habits amid the worst economic crisis since the Great Depression. We expect Capital One to continue to be aggressive in acquisitions moving forward.
Capital One Financial Corp. is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.
Nokia Lowers Fourth-Quarter Mobile Unit Forecast ... Again
For the second time in less than a month, world mobile-phone leader
reduced its fourth-quarter mobile-industry outlook.
In a statement released Thursday, the company said it expects fourth-quarter industry mobile-device volumes to fall below the 330 million units it estimated in an update on Nov. 14.
The Finland-based mobile device maker said that the "mobile-device-market slowdown has continued more rapidly than previously expected since Nokia issued an update on November 14, 2008. The industry continues to be impacted by the effects of a global consumer pullback in spending, currency volatility, and decreased availability of credit."
Nokia also said it expects mobile-device industry volumes to fall by at least 5% from 2008 levels.
We have been avoiding shares of NOK since our early June coverage began, when shares were trading at the $26 level. The company currently has a dividend yield of 5.85%, based on last night's closing price of $13.30. A slowing global economy, combined with increased competition from rivals
(whose iPhone has been a runaway success) and
Research In Motion
, will clearly make things difficult for Nokia as we move into next year. Although the company said it expects its market share of 38% of the mobile market to increase in 2009, we're very skeptical of those claims.
Nokia is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.
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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.