FedEx Cost Cuts Offset Global Slowdown
just posted first-quarter revenue results that rose 8% to $9.97 billion. The company's cost-cutting efforts were neutralized by the current economic weakness and fuel prices.
The company's total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 1% year over year for the quarter. The company will be will increasing shipping rates by an average of 6.9% for U.S. and U.S. export services, effective Jan. 5, 2009.
We have avoided shares of FedEx since our coverage began in early June. We actually prefer its competitor,
United Parcel Service
, and its larger dividend. That said, we would like to see a larger dividend payout from FedEx to go along with more consistent growth. The company has a minuscule 0.45% dividend yield, based on last night's closing stock price of $88.07.
FedEx is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.3 out of 5 stars.
Kraft Foods Replaces AIG, Joining the Elite on the Dow 30
will become the newest member of the
Dow Jones Industrial Average
on Sept. 22, replacing
American International Group
There is no set qualifying criteria for adding stocks to the DJIA index, but companies on the list are usually leaders in their respective sectors. The announcement of this change should not be a surprise, considering AIG's takeover by the
via an $85 billion emergency bailout loan.
This is a more of a status upgrade for Kraft Foods than anything that can materially boost its stock price. We have been recommending Kraft shares since late July, when they were trading at the $29.38 level. The company has a 3.55% dividend yield, based on last night's closing stock price of $32.65.
Kraft Foods is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.5 out of 5 stars
Conagra Foods Lowers Earnings Outlook on Rising Commodity Costs
, maker of maker of Healthy Choice, Hunts, and other famous food brands, is lowering its outlook for fiscal 2009.
The company reported a hedging loss of $33 million for the first quarter, which is principally a result of decreases in commodity costs for certain inputs being hedged (primarily corn, soybean oil, and natural gas). The company will surely need to improve on its strategy in controlling these material costs.
Pointing to volume and inflation expectations, as well as increased investments for some brands and categories, the company is revising its 2009 outlook to earnings of $1.50 per share, from a previous range of $1.56 to $1.59 per share.
We had taken CAG off our "Recommended" list back in late June, at levels slightly above where the stock is trading now. We prefer shares of
over CAG, which has a dividend yield of 3.96%, based on last night's closing stock price of $19.17.
ConAgra Foods is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.3 out of 5 stars.
Constellation Energy Gets a Buffett Bailout
is being acquired by MidAmerican Energy Holdings, a unit of Warren Buffett's
The deal is valued at $4.7 billion, or $26.50 a share in cash.
We mentioned in an article we posted yesterday that the company was looking for a potential buyer, as word spread that credit rating agency Standard & Poor's would possibly cut Constellation's "BBB" ratings on the company's debt if rapid action was not taken to shore up its balance sheet.
Investors looking for higher bids should be discouraged to see shares not trading above the purchase price being offered. Unfortunately, right now there is a lack of "qualified" buyers that can easily pull a deal of this size off. Again, we had removed shares of CEG back on Aug.1, when shares were trading at $83.16. We would be surprised to see any other bids for the company at this point.
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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.