Exxon Mobil Down Nearly $20 in Three Days
is taking a major hit this week, as oil prices are down nearly $14 a barrel from last Friday's close.
The company's shares have dropped 35% in the last four months and are down nearly $20 from last week's close, as of early trading today. The drop in share price is not a surprise, as oil prices have taken a huge hit, down $45 a barrel (from the Aug. 1 price of $125 a barrel) to a recent quote of $80.
We had removed shares of Exxon Mobil from our "recommended" list back on July 31, when shares were trading at $84.38. We believe the stock is still pricey at its current levels, and we would prefer to look at the shares once the dividend yield becomes more attractive. Investors should not be in any rush to jump into any long-term positions at this point. The company has a 2.35% dividend yield, on the basis of last night's closing stock price of $68.00.
Exxon Mobil (XOM) is not recommended at this time, holding a Dividend.com rating of 3.3 out of 5 stars.
Apartment Investment & Management Delivers Interesting Earnings News
Apartment Investment & Management
came out with some interesting news today, as the company expects third-quarter funds from operations to meet or beat guidance, according to preliminary results, and said it plans a special quarterly dividend.
The company is one of the nation's largest owner and operators of apartment complexes. The company expects to meet or exceed its guidance of 81 cents to 85 cents per share for the quarter. Also, management plans to recommend that the board declare a $1.80-per-share special quarterly dividend to holders of Class A common stock, payable in a combination of cash and additional common stock.
The interesting news is the revelation that because of the company's sharp drop in share price, two family partnerships affiliated with Chairman, President and Chief Executive Terry Considine sold common stock pledged to secure margin debt. Roughly 600,000 shares have been involuntarily sold to date. The company noted that Considine holds less than 1% interest overall in the partnerships.
We removed the stock from our "recommended" list back on Aug. 25, when shares were trading at $34.65. The dividend news seems like a positive, but we feel investors should wait a bit to make sure the market sees it that way as well.
Apartment Investment & Management is not recommended at this time, holding a Dividend.com rating of 3.3 out of 5 stars.
Chevron Indicates It Can Beat Last Quarter's Numbers
says it expects third-quarter results to surpass those of the second quarter, as a result of improvements at its "downstream" (refining and marketing) operations.
The company is cautioning that some of the profits will be offset in part by declining earnings in its "upstream" (exploration and production) business. The company blames this decline on the effects of the September hurricanes.
We had removed shares of Chevron back on Aug. 1, when shares were trading at the $84.01 level. We felt the risk/reward was becoming unfavorable, and we believed that oil was looking like it had reached an exhaustive top. We believe CVX's valuation is getting much more attractive, but we'd like to see oil prices find some sort of foundation before a bottom forms in this name.
Chevron is not recommended at this time, holding a Dividend.com rating of 3.4 out of 5 stars.
General Electric Matches Lowered Estimates
just reported that its third-quarter profit fell 22%, as the company was hurt by lower earnings at its finance business.
Leading the lowered profits was a 33% profit decline at GE Capital, its struggling finance arm that handles leases and loans. There was also an 82% drop in profit at GE's consumer and industrial unit, which manufactures household appliances and other products.
The company has begun to take steps to reduce its leverage, with its recent $12 billion common stock offering and $3 billion in preferred shares sold to Warren Buffett's Berkshire Hathaway (albeit the Buffett deal comes at a price, with its guaranteed 10% dividend).
The tough earnings report is out of the way, and it's now time to see if GE stock can regain the $22.25 print price of its offering. That price will be a key confidence level we will be looking at. For now, we would still remain on the sidelines on GE shares, as we are still not sure how viable the current dividend payout will be.
General Electric 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.