Burlington Northern Earnings May Derail
Burlington Northern Sante Fe
shares are down nearly 6% today after Morgan Stanley downgraded the stock to underweight from equal-weight.
The analyst believes the railroad operator will not escape the drop in traffic for the industry, which is expected to fall 7.5% to 9% in the fourth quarter.
Much of the company's earnings success comes as a result of commodity strength. In the last quarter, agricultural products revenue rose 33%, while coal revenue rose 23%. The company does have a famous investor on board with Warren Buffett, reportedly holding a little over 70 million shares of Burlington Northern, or 20.47% of all the shares outstanding.
We had removed shares of Burlington Northern from our "Recommended" list back on Aug. 11, when shares were trading at $101.43. The company now has a dividend yield of 2.15%, based on last night's closing stock price of $74.58.
The stock does have technical support in the $54 area. If that fails to hold, we could see the $36 area as potentially the next stop below. On the flipside, if the shares can firm up and strengthen, the $81 to $85 area is the first level of overhead resistance, with $91 coming after that.
Burlington Northern Sante Fe Corporation is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.
Bank of America to Cut Dividend Again?
According to a
analyst report from earlier today, the firm believes
Bank of America
may need to cut its dividend again as it reports potential fourth-quarter losses.
The analyst believes the company's latest acquisition of Merrill Lynch may pose credit and integration risks for Bank of America, which has told Wall Street it anticipates $7 billion in annual cost savings from the merger.
We have talked about the departure of Bob McCann, who had led Merrill Lynch's 16,000 brokerage division since 2003. The culture differences from this acquisition as well as when it purchased Countrywide has made for a shaky situation with possibly one deal too many being the case.
We had removed shares of Bank of America from our "Recommended" list back on Sept. 15, when the stock traded at $33.74. We would still avoid the name at this current time.
Bank of America is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.
Polaris Industries Flips Over After Downgrade
shares are down nearly 7% today after the company was downgraded to a hold from a buy at Citi Investment Research.
The analyst said checks with all-terrain vehicles, snowmobiles and motorcycles dealers revealed that sales at Polaris declined in the fourth quarter and are unlikely to improve in 2009. He also believes the weak economy has likely caused consumers to take a conservative view and delay purchases.
We had removed the shares of Polaris from our "Recommended" list -- back on June 30 -- when shares traded at $40.38. The company has a 5.44% dividend yield, based on Friday's closing stock price of $27.93.
The stock does have technical support in the $16 to $18 price area. If the shares can firm up and regain some momentum, we see overhead resistance playing a factor in the $37 area. We would look elsewhere for better investment opportunities.
Polaris Industries is not recommended at this time, holding a Dividend.com Rating of 2.9 out of 5 stars.
Charles Schwab Target Price Lowered
are down 2% so far today after an analyst from Credit Suisse lowered the company's price target to $19 from $21.
The analyst is maintaining the stock as an outperform. The brokerage firm recently announced it was reducing overall staffing by approximately 100 positions -- mostly at the officer level. We do not have Schwab's December asset figures yet, but the company's November totals were $1.112 trillion, which was down 23% from November 2007 and down 4% from October 2008.
We had removed shares of Schwab from our "Recommended" list back on Sept. 15, when the shares traded at $22.70. The company has a dividend yield of 1.55%, based on Friday's closing stock price of $15.46.
The stock does have technical support in the $13 price area. If that fails, we may see the stock retest 2003 lows of $7. If the shares can stabilize and regain some momentum, we see overhead resistance at the $18 to $19 levels. We would remain on the sidelines for now.
Charles Schwab is not recommended at this time, holding a Dividend.com Rating of 3.4 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.