Dividend.com: Clorox Cleans Up

Burger King Should Hold Up Well as Restaurants Feel Pinch

Burger King ( BKC) just reported that it missed its first quarter EPS estimates by a penny, as net income rose 2% to $50 million, or 36 cents, from $49 million, or 35 cents in the year-ago quarter.

The company is blaming higher commodity, remodeling and acquisition startup costs for the miss. Fortunately prices for beef, cheese and oils have been coming down from the end of the summer, so the commodity effect should dissipate.

Same-store sales, or sales at locations open at least a year, rose 3.6% worldwide. The company's sales should hold up fairly well as consumers have cut back on spending in recent months and have been avoiding more expensive sit-down restaurants.

Management is reaffirming its 2009 EPS outlook of $1.54 to $1.59. The consensus is for $1.56.

We have avoided shares of BKC since our early June coverage began, and shares were trading at $28.25. The company has a dividend yield of 1.23%, based on last night's closing stock price. We think the shares of BKC are fairly valued, but we prefer shares of McDonald's ( MCD) as our investment idea.

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

Apartment Investment & Management Takes Hurricane Hit

Apartment Investment & Management ( AIV) just reported lower quarterly funds from operations, due in part to hurricane damage charges.

The company is coming off some interesting news that was reported earlier this month, where there were sales of common stock pledged to secure margin debt by two family partnerships affiliated with Chairman, President and Chief Executive Terry Considine. Roughly 600,000 shares have been involuntarily sold to date.

The company lowered its full-year FFO forecast to $3.06 to $3.16 per share from $3.33 to $3.43, including the special dividend and costs associated with hurricane damage. The consensus is for $3.09 per share.

We removed shares of AIV from our "Recommended" list back on Aug. 25, when they were trading at $36.19. We prefer shares of Avalon Bay Communities ( AVB) for an apartment-focused REIT play at this time.

Apartment Investment & Management is not recommended at this time, holding a Dividend.com Rating of 3.3 out of 5 stars.

Clorox Hoping for Brand Loyalty

Clorox ( CLX) just reported it beat first-quarter EPS estimates by 11 cents on revenue that gained 12% to $1.38 billion.

Some of the product highlights that sold well were Burt's Bees personal care products, Green Works environmentally friendly cleaners and Glad ForceFlex trash bags. The company credits higher prices for softening the impact of increased commodity costs.

Management believes that consumers will turn to brands they trust, such as its own, during the tough economic times. The company's EPS outlook in fiscal 2009 is $3.60 to $3.75. The consensus estimates are for earnings of $3.69.

We had recently removed shares of Clorox from our "Recommended" list on Oct. 15, when shares traded at $58.06. The company has a dividend yield of 2.70%, based on last night's closing stock price of $59.21. We feel the stock has a flat risk/reward at these levels and would look for a better entry point to take a position. The stock trades at 17 times the low end of 2009 estimates.

Clorox is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.

Chevron Looks to Increase Production Despite Price Drop

Chevron ( CVX) just reported that its third-quarter EPS came in 60 cents ahead of estimates on revenue jumping 43% to $78.87 billion.

The highlight of the report was the company's exploration and production, or upstream, business that rose about 80% in the quarter to $6.18 billion on the back of higher crude prices.

Management plans to continue investing in attractive projects that increase the production of oil and gas and improve the efficiency of its refinery network.

We had removed shares of CVX from the "Recommended" list on Aug. 1, when shares traded at $84.56. The company has a dividend yield of 3.13%, based on last night's closing stock price of $74.18. We are concerned that many of the major oil producers may have seen peak earnings, so we are waiting for the names to come down to levels where we feel the dividend offers a solid cushion.

Chevron is not recommended at this time, holding a Dividend.com Rating of 3.4 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.

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