JP Morgan Joins the Club in Looking for General Electric Dividend Cut
are up slightly this morning, despite JP Morgan's cutting of GE's price target.
The firm is cutting GE's estimates and price target from $13 to $9. Also, JP Morgan believes GE's triple-A credit rating is not sustainable and the dividend will likely be cut.
The company's CEO has been somber this week in several appearances and believes the economy may continue to get worse.
We have been avoiding shares of GE since our brief holding period from back on Sept. 15, when the stock traded at $26.75. The company has an 11.43% dividend yield, based on last night's closing stock price of $10.85.
We have been warning about the dividend being unsustainable for months as many fund managers and market watchers have continued to pound the table on the stock. We actually think the shares would rally after a dividend cut, but we would not make any big bets on how large a cut they would implement. We would remain on the sidelines for now.
General Electric is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.
Pitney Bowes Shares Up on Fourth-Quarter Profit, Raises Dividend
shares are up more than 4% so far today, after the mail and document-management company reported fourth-quarter profit of $74 million, or 36 cents per share, for the quarter ended Dec. 31 compared with a loss of $57.9 million, or 27 cents per share, in the year-earlier period.
The company's revenue was down 6.7% to $1.55 billion. The company announced it had raised its annual dividend payout from $1.40 to $1.44. Looking ahead, management sees a stronger dollar and rising pension costs putting a damper on profit growth.
The company is now forecasting EPS to come in a range of $2.55 to $2.75, below the consensus estimates of $2.83 a share.
We had removed shares of Pitney Bowes from our "Recommended" list back on Aug. 1, when shares traded at $31.69. The company has a dividend yield of 6.26%, based on last night's closing stock price of $23.01. The stock has technical support in the $13 to $17 price area. If the shares can firm up, we see overhead resistance around the $27 to $31 price area. We would remain on the sidelines for now.
Pitney Bowes is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.
Corning Shares Bounce Despite Weak Outlook in 2009
are bouncing this morning despite the company's concerns for lower sales and earnings this year as the global economic slowdown shrinks demand.
The company is also suspending share buybacks. This is the latest cost-cutting move after saying last week it would continue to cut jobs in 2009.
The company has been affected tremendously by the decreased demand for notebook computer displays and telecommunications equipment.
We had removed shares of Corning from our "Recommended" list on July 1, when the stock traded at $22.60. The company has a 1.82% dividend yield, based on last night's closing stock price of $10.97.
The stock has technical support around the $7 price area. If that fails to hold, we could potentially see a fall to the $2 level. If the shares can rebound, we see overhead resistance around the $12 to $14 price points. We would look elsewhere for better investment opportunities at this time.
Corning is not recommended at this time, holding a Dividend.com Rating of 2.6 out of 5 stars.
Aon Shares Rally After Beating Estimates
are up more than 10% in trading so far today, after the company beat Wall Street estimates by 2 cents.
The company reported profit plunged 95% to $10 million, or 3 cents a share, from $207 million, or 64 cents a share, a year earlier. The company's revenue fell 4% to $1.9 billion, as the strong dollar played a role in the drop.
Management said it continues to streamline costs as it deals with higher pension costs and lower interest rates eating into investment income.
We have avoided shares of Aon since our early June coverage began, when the stock was trading at $46.59. The company has a 1.65% dividend yield, based on last night's closing stock price of $36.45.
The stock has technical support around the $29 to $33 price levels. If that fails to hold, we could see the $20 price point come into play. If the shares can firm up, we see overhead resistance around the $46 mark. We would remain on the sidelines for now.
Aon is not recommended at this time, holding a Dividend.com Rating of 3.2 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.