Genworth Financial Suspends Dividend, Buyback and 2008 Full-Year Outlook
In a move that had been anticipated for months, life and mortgage insurance company
suspended its annual dividend amid a net loss of $258 million in its third-quarter earnings report.
The company also suspended its share-buyback program, as well as its previously announced 2008 full-year outlook projections.
Genworth stock has seen extreme volatility lately, bouncing around from $15 to $10, back to $15, to under $5 in a little more than two-week span back in September. We recommend that investors steer clear of this stock for obvious reasons.
Because of the company's dividend suspension, we will be dropping coverage of Genworth Financial.
Qualcomm Profits Drop on Bad Investments
reported late Thursday that its fourth-quarter profit dropped 22% to $878 million, or 52 cents a share, in the three-month period ended Sept. 28, down from $1.13 billion, or 67 cents a share, the same period last year.
The company cited losses on financial investments accounted for much of the decline. Management also warned of a sharp slowdown in business, highlighted by lighter demand for its chips that power many of the world's mobile phones.
As for the company's next-quarter outlook, the company sees its first-quarter profit coming in between 46 cents and 50 cents a share, and revenue of $2.3 billion to $2.5 billion. That is below the analyst estimate of 61 cents a share and revenue estimate of $2.91 billion.
We had removed shares of Qualcomm from our "Recommended" list back on Sept. 25 when the stock traded at $46.54. The company has a dividend yield of 1.94%, based on last night's closing stock price of $33.05. The profit drop due to financial investment losses has been part of a bad trend affecting many large corporations. We would let the shares stabilize a bit before thinking of any long-term positions.
Qualcomm is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Windstream Third-Quarter Profits Fall 10% as Phone Customers Dwindle
reported its third quarter results early Friday, saying that profits fell 10% from the year-ago period.
The company's EPS came in at 25 cents, a penny shy of analysts' estimates. Windstream's revenue also declined 3% to $794.1 million, below expectations of $802 million.
The company's phone line subscriptions are down 4.8% from last year, now sitting at 3.08 million access lines. This decline was partially offset by a 16% jump in high-speed Internet subscribers.
We removed Windstream from our "Recommended" dividend stocks list on Aug. 21, when shares were trading at $12.03. The stock currently has about a 12% dividend yield, based on last night's closing price of $7.88.
Windstream stock is down about 35% in past year, which is largely in line with the S&P average. The stock hit all-time lows in late October, so there is not much support underneath the current trading price. Windstream's dividend yield is intriguing, but the share price and revenue numbers need to stabilize before we will consider an upgrade.
The stock is fairly valued at around 10 times next year's estimates, but its dividend may not be sustainable with revenue and profits continuing to drop.
Windstream is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Disney Feels the Pain of the Consumer
reported late Thursday that its fourth-quarter income dropped 13% to $760 million, or 40 cents per share, from $877 million, or 44 cents per share, a year ago.
The company's revenue grew 5.8% to $9.45 billion from $8.93 billion, but the EPS came in 6 cents below consensus estimates.
The company's studio revenue was a disappointment falling 5% to $1.45 billion from $1.53 billion. The ABC television networks grew 4%, while parks and resorts revenue rose 7% to $2.97 billion. Lastly, consumer products revenue rose 41% to $812 million.
We had removed Disney from our "Recommended" list back on Sept. 29, when shares traded at $32.75. The company has a dividend yield of 1.53%, based on last night's closing stock price of $22.81. The company is trading at 11 times the low end of 2009 EPS estimates, but the outlook may not brighten for this brand until the end of 2009 at the earliest. The yield is a bit below a level we would like as well. The risk/reward is flat at this point.
Walt Disney is not recommended at this time, holding a Dividend.com Rating of 3.2 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.