Broker Battle Begins, Goldman Says Time to Sell Merrill Lynch Shares
The battle of the Wall Street titans is heating up.
has put out a note to investors that it is time to dump shares of
Goldman is saying that Merrill Lynch is trading at the highest price-to-book multiple in the large-cap brokerage space, despite having some of the most significant exposures to troubled assets such as collateralized debt obligations, mortgages, and leveraged loans. Merrill Lynch has gone through more than $46 billion in writedowns since last summer.
We have been negative on Merrill Lynch since our coverage began, and we recently removed Goldman Sachs from our "Recommended" list, due to the company's lagging performance, as well as concerns about the financial sector in general.
Goldman Sachs is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.3 out of 5 stars. Merrill Lynch is not a recommended dividend stock at this time, holding a Dividend.com rating of 2.9 out of 5 stars.
National Semiconductor Sees Better Margins This Quarter
is out with first quarter earnings that saw sales drop 1% to $466 million. EPS came in 1 cent below Thomson Reuters estimates of 34 cents per share for the quarter.
Gross margin of 66.0% in National's first quarter of fiscal 2009 set a new record for the company and was up from the 65.9% gross margin achieved in the fourth quarter of fiscal 2008. Gross margin was considerably higher than the gross margin of 63.0% reported in the first quarter of fiscal 2008. Management credits strong manufacturing performance and cost efficiencies as well as improved product mix of higher-value analog products.
We have avoided shares of National Semiconductor since our June coverage began. The semiconductor industry has been slumping of late, and we prefer a name like
in this sector at this time. National Semiconductor has a dividend yield of 1.23%, based on last night's closing stock price of $19.47.
National Semiconductor is not a recommended dividend stock at this time, holding a Dividend.com rating of 2.9 out of 5 stars.
Nokia Wakes Up Investors With an Earnings Warning
reported that is it losing market share, as the company has chosen not to match the aggressive price cuts of some of its competitors.
The company has seen its shares take a big hit this year, down 45% since January, as consumers tighten up on spending. The average selling price of Nokia handsets has continued to fall, with competition from cheaper phones hitting margins.
We have been avoiding shares of Nokia since we initiated coverage of the stock back in June. However, we think that the $20 level is starting to make the shares look attractive. We would just like to see the shares settle in a bit before jumping in. The company has a dividend yield of 3.50%, based on last night's closing stock price of $22.31.
Nokia is not a recommended dividend stock at this time, holding a Dividend.com rating of 3.4 out of 5 stars.
Altria Group Looks to Acquire UST
It appears there may be a big deal in the tobacco space that could take place as early as Monday. News is that
is in advanced talks to buy Skoal and Copenhagen smokeless tobacco maker
The deal may be worth more than $10 billion -- and would make perfect sense for Altria -- as it would catapult the company to the top of the smokeless tobacco market.
We have been recommending both stocks, and this is a great deal for readers that have followed our research. We would likely hold UST, but would consider taking some profits from the big run it may have today. We would also hold on to shares of Altria, even if the shares dip on this potential acquisition offer. That sort of drop tends to happen to companies on the acquiring end.
Altria Group is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.7 out of 5 stars. UST is a "Recommended" dividend stock, holding a Dividend.com Rating of 3.6 out of 5 stars.
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At the time of publication, the authorshad 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.