Dividend.com: Principal Lagging

The company sees a sharp drop in quarterly profit vs. the same year-ago period and gets several estimate cuts.
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Principal Financial Group Shares Down 27% on Fourth-Quarter Earnings Blow-Up

Principal Financial Group

(PFG) - Get Report

reported earnings Monday, saying its fourth-quarter profit dropped 98% from the year-ago period.

The company, which provides retirement savings, investment, and insurance products and services, saw its quarterly profit shrink to $800,000, down from $42.4 million in the previous year.

After paying preferred dividends, the company saw a three-cent-per-share loss for the quarter, which was hampered by net realized capital losses of $188.9 million. Revenue for the quarter fell 11%, to $2.28 billion, while the company's total assets under management fell 21%, to $247 billion as of Dec. 31, 2008.

The lackluster earnings report prompted several analysts to reduce their earnings estimates for the Des Moines, Iowa-based company.

We have avoided shares of Principal Financial since our early June coverage began and the shares were trading at $49.19. The company has a dividend yield of 2.64%, based on last night's closing stock price of $17.03. The stock has technical support around the $9 to $10 price area. If the shares can rebound, we see overhead resistance around the $24 to $27 price levels. We would look elsewhere for better investment opportunities at this current time.

Principal Financial Group is not recommended at this time, holding a Dividend.com Rating of 2.5 out of 5 stars.

Market Expected Details

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MDC Holdings Revenue Drops 62%, but Fourth-Quarter Loss Narrows

Homebuilding company

MDC Holdings

(MDC) - Get Report

reported a smaller fourth-quarter loss than the same period last year, despite a sharp drop in revenue.

The company posted a fourth-quarter loss of $89 million, or $1.92 per share, compared with a loss of $281.1 million, or $6.14 per share, in the year-ago period.

However, MDC's revenue plunged significantly compared to the year-ago period. In fourth quarter of 2008, the company saw revenue of $296.2 million -- down from $772.1 million a year earlier. The company's home sales have been decimated by the recent housing market collapse.

MDC saw home closings decline 57% from the year-ago period, while the average selling price of homes dropped 8%.

As for the full-year 2008, the company saw a full-year loss of $380.5 million, or $8.24 per share, down from a $636.9 million loss, or $13.94 per share, in 2007. Annual revenue for 2008 fell 50% to $1.46 billion, from $2.89 billion.

Shares of the homebuilder's stock fell over 12% in late morning trading Tuesday.

We have avoided shares of MDC since our early June coverage began, when the stock was trading at $40.84. The company has a dividend yield of 2.83%, based on last night's closing stock price of $35.35. The stock has technical support around the $26 price area. If the shares can firm up, we see overhead resistance around the $43 to $44 price levels. We would remain on the sidelines for now, despite many pundits calling for a bottom in home-builders.

MDC Holdings is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.

Despite 13% Fourth-Quarter Profit Decline, Omnicom Group Beats Earnings Estimates

Advertising services company

Omnicom Group

(OMC) - Get Report

reported fourth-quarter profit that dropped 14% from the year-ago period, but still beat analysts' earnings estimates.

Omnicom said its fourth-quarter EPS came in at 88 cents, more than 7% higher than analyst estimates of 82 cents per share. Fourth-quarter revenue was largely in-line with estimates, at $3.37 billion vs. estimates of $3.36 billion.

Compared to the same period a year ago, the company's profit fell 14% to $271 million, from $313.9 million, or 96 cents a share.

We have avoided shares of OMC since our early June coverage began, when the stock was trading at $45.55. The stock has a 2.13% dividend yield, based on last night's closing stock price of $28.11. The stock has technical support at the $22 price area. If that fails to hold, we could possibly see $17 tested next.

On the flipside, if the shares can firm up, we see overhead resistance around the $34 level and then $40 above that. We would remain on the sidelines for now, especially with the advertising slowdown hitting Madison Ave. pretty hard.

Omnicom Group is not recommended at this time, holding a Dividend.com Rating of 3.2 out of 5 stars.

Lincoln National Posts $505 Million Fourth-Quarter Loss

Lincoln National

(LNC) - Get Report

shares are down four percent in early trading after the company reported a fourth-quarter loss of $505.5 million, or $1.98 per share, compared with a profit of $112.5 million, or 41 cents per share, a year earlier.

Investment losses were a central theme in the report, which included Lincoln Financial an $85 million non-cash impairment charge on

Bank of America

(BAC) - Get Report

, $166 million in non-cash charges on the impairment of intangibles, primarily related to its media assets, as well as $283 million on general account investments.

Looking ahead, management says the focus will be on reducing costs through job cuts and a reduction in capital and discretionary spending.

We had removed shares of Lincoln National back on Sept. 29, when the stock traded at $49. The company has a 4.73% dividend yield, based on last night's closing stock price of $17.77. The stock has technical support at the $5 price level. If the shares can rebound, we see overhead resistance at the $25 price point.

We would look elsewhere for better investment opportunities at this time. We are not certain if the dividend can sustain, with the main focus of the company is capital preservation. That may put the current dividend payout size in play for a cut possibly.

Lincoln National is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.

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.