Baxter Downgraded Amid FTC, Plasma Industry Pressure

Pharma- and medical-device maker

Baxter International

(BAX) - Get Report

was downgraded by Soleil analysts Monday, following FTC pressure and claims of price collusion in the blood plasma industry.

Soleil downgraded Baxter to a "Hold" from a previous "Buy" rating, and also lowered its price target for the stock from $66 to $49 per share.

The FTC on Monday rejected a merger between Baxter's rival CSL Ltd. and smaller plasma maker Talecris Biotherapeutics, amid antitrust concerns. The FTC ruled that such a merger could substantially reduce competition in the market for plasma-derivative protein therapies.

Baxter shares fell 70 cents, or -1.5%, in afternoon trading Monday.

The Bottom Line

: We removed shares of BAX back on Oct. 7, when they were trading at $64.64. The company has a 2.19% dividend yield, based on Friday's closing stock price of $47.56. The stock has technical support in the $38-$40 price area. If the shares can firm up, we see overhead resistance in the $55-$58 price area. We would remain on the sidelines for now.

Baxter International is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.

Pepsi Bottling Group to Buy Ab-Tex Beverage Ltd. for $200M

According to reports,

The Pepsi Bottling Group

( PBG) said Monday that it will buy Abilene, Texas-based Ab-Tex Beverage Ltd. for about $200 million.

Unnamed PBG officials said the deal will give the company an additional $100 million in sales annually.

The Pittsburgh-based Pepsi bottler is currently battling PepsiCo's attempts to complete an unsolicited acquisition of the company. PBG feels the $4 billion offer is grossly undervalued, and is urging shareholders to continue to reject the offer.

PBG shares fell 37 cents, or -1.1%, in morning trading Monday.

The Bottom Line

: We have avoided shares of PBG since our early June coverage began, and the stock was trading at $31.46. The company has a dividend yield of 2.16%, based on Friday's closing stock price of $33.41. The stock has technical support in the $24-$26 price area.

If the shares can continue the recent ramp, we see the next level of overhead resistance sitting around the $36-$38 price levels. We would remain on the sidelines for now, despite the good news from the company.

The Pepsi Bottling Group is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.

McDonald's May Same-Store Sales Jump 5.1%

Fast food king

McDonald's Corporation

(MCD) - Get Report

said Monday that its combined same-store sales rose 5.1% in May, aided by strong international growth.

Same-store sales growth in the U.S. slowed, posting a moderate 2.8% same-store sales gain in the period, compared to 4.3% growth in the same month last year. International growth was strong, however, with European same-store sales jumping 7.6%, and same-store sales in Asia Pacific, Middle East and Africa rising 6.4%.

Same-store sales are considered a key indicator of a retailer's health, because they measure the performance of stores open at least one year.

Overall sales for the month of May fell 0.4%, the company said, but when excluding effects of the stronger dollar, sales rose 7%. McDonald's said it expects currency effects to negatively impact second-quarter earnings by 8 cents to 9 cents per share, and full-year earnings by 20 cents per share, assuming exchange rates stay at current levels.

McDonald's shares fell $1, or -1.67%, in morning trading Monday.

The Bottom Line

: We added shares of McDonald's to our "Recommended" list last June when shares were trading at $56.95. We are still optimistic about the company at current levels. The company has a 3.34% dividend yield, based on Friday's closing stock price of $59.87.

McDonald's Corporation is a "recommended" dividend stock, holding a Dividend.com DARS Rating of 3.6 out of 5 stars.

Qwest Takes Long-Distance Unit Off the Market

Qwest Communications International

(Q)

said Monday that it is ending the auction for its nationwide long-distance business, amid several reports that bidding was slow and much lower than Qwest had anticipated.

Since it didn't receive nearly the offer it was looking for, Denver-based Qwest has taken the unit off the market, saying it was too valuable for it to sell at a low price.

Qwest's long-distance unit helps support its local calling service and its municipal/government businesses.

Price competition in the telecom industry has continually lowered the unit's earnings for several years in a row.

Qwest shares fell 26 cents, or 6.2%, in early afternoon trading Monday.

The Bottom Line

: We have avoided shares of Qwest since our early June coverage began, when the stock was trading at $4.70. The company has a dividend yield of 7.67%, based on Friday's closing stock price of $4.17.

The stock has technical support in the $3.00-$3.40. If the shares can firm up, we see overhead resistance around the $5 price mark. We would remain on the sidelines for now.

Qwest is not recommended at this time, holding a Dividend.com DARS Rating of 3.0 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.