Lorillard Shares Jump on EPS BeatLorillard ( LO) just reported its third-quarter profit fell 2.8%, but the company's earnings still beat analysts' estimates. Lorillard beat EPS estimates by 2 cents on higher prices and market-share gains. The cigarette maker, which has brands such as Newport, Kent and True, saw its wholesale shipment volumes in the quarter rise 4.5% to 10.09 billion units. We had removed shares of LO from our "Recommended" list on Oct. 6, when shares traded at $66.83. The company has a 6.33% dividend yield, based on Friday's closing stock price of $58.13. The current election as well as potential FDA tobacco regulation have made us cautious on these shares. We would look at other tobacco plays, such as Altria ( MO), Reynolds American ( RAI) and Philip Morris International ( PM) as better risk/reward plays. Lorillard is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars. Alberto-Culver Profit Soars on One-Time Gain Alberto-Culver ( ACV) just reported a huge gain in its fourth-quarter profit as it recorded a one-time gain of $110.7 million for the sale of its Cederroth consumer products business to a private-equity firm. The maker of hair care and other consumer products saw its revenue rise 7.3% to $386 million. The company also just completed the acquisition of the Noxzema skin care company. The company believes its lower-priced hair products may be positioned well for the consumer spending slowdown. We have avoided shares of ACV since our early June coverage began, when shares were trading at $26.80. The company has a low dividend yield of 1.20%, based on Friday's closing stock price of $21.67. The company is trading at nearly 18 times 2009 estimates, so we think the shares are more than fairly priced. We would look for a better entry point, if we were to consider adding the shares to our "Recommended" list. Alberto-Culver is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.
FPL Group to Cut Back on Capital Spending, Reduces Outlook FPL Group ( FPL) just reported a revenue gain of 18% in the quarter to $5.39 billion but is taking steps to cut its capital spending. Management said that because of current economic conditions, it will be reducing capital expenditures to $5.3 billion from $7 billion in 2009. This will include deferring new-project development at FPL Energy, including wind energy projects. As for the outlook, the company sees EPS in the range of $3.83 to $3.93, which surrounds the $3.87 consensus estimates number. We had removed shares of FPL on Sept. 2, when they were trading at $59. The company has a dividend yield of 4.12%, based on Friday's closing stock price of $43.20. We think the shares have limited upside at the moment and would look elsewhere for better investment opportunities in the market. FPL Group is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars. Arch Coal Earnings Soar, but It Cuts Full-Year Outlook Arch Coal ( ACI) just came out with third-quarter earnings that more than tripled, but the company is cutting its outlook. The company's EPS was 9 cents ahead of consensus estimates, as revenue came in at $769.5 million. Management is citing cooler weather patterns and the slowing U.S. economy, which have impacted coal consumption. The company is lowering its guidance again, now seeing EPS coming in at a range of $2.30 to $2.55 for 2008, down from its revised forecast of $2.50 to $2.85 per share in July.
We had removed ACI from our "Recommended" list on July 17, when shares traded at $54.80. The company has a low dividend yield of 1.51%, based on Friday's closing stock price of $18.50. We would look to the energy space as a sector for potential short-term trade opportunities at this point. We will keep investors posted of what we see attractive as opportunities present themselves. Arch Coal 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.