HSBC Shutting Branches, Cutting Dividend Shares of HSBC Holdings ( HBC) are down more than 19% so far today, after the company announced net profit for 2008 dropped 70% to $5.73 billion from $19.13 billion.
The company said it is closing its branch network of its HSBC Finance arm in the U.S., resulting in 6,100 job losses. The company will be looking to raise $17.7 billion from shareholders from a method of fund raising, called a "rights issue," which is popular throughout Europe. The bank will pay a fourth interim dividend of 10 cents a share, down from 19 cents a year ago and resulting in a 29% drop in the total payout for the year to 64 cents. We had removed shares of HBC from our "Recommended" list on Aug. 21, when the stock was trading at $77.37. The company will now have a dividend yield of 1.89%, based on the lowered dividend payout, and Friday's closing stock price. The stock has broken to historic lows and therefore has minimal technical support. If the shares can firm up, we see overhead resistance around the $41 to $42 level. We would look elsewhere for better investment opportunities at this time. HSBC Holdings is not recommended at this time, holding a Dividend.com rating of 2.5 out of 5 stars. PNC Bank Slices Quarterly Dividend Payout 85% Shares of PNC Bank ( PNC) were down 5% in early trading after the company announced it is reducing its quarterly dividend payout to 10 cents per share from 66 cents. Management reaffirmed its overall capital and liquidity positions are strong, but extreme market deterioration and the changing regulatory environment drove the company to make this difficult but necessary decision.
We removed shares of PNC from our "Recommended" list back on Oct. 9, when the stock traded at $67.75. The company will now have a 1.46% dividend yield, based on the lower dividend payout and Friday's closing stock price of $27.34. The stock has technical support in the $21 to $22 price range. If that fails to hold, we could see the $15 to $16 levels next. If the shares can rebound, we see overhead resistance in the $34 to $37 price area. We would look elsewhere for better investment opportunities at this time. PNC Bank is not recommended at this time, holding a Dividend.com rating of 2.5 out of 5 stars. Woodward Governor Cuts Outlook, Will Buy HR Textron Shares of aircraft control systems maker Woodward Governor ( WGOV) fell more than 35% in Monday morning trading, after the company lowered its 2009 profit outlook. The company said it now expects 2009 profit between $1.40 and $1.65 per share, excluding charges, on revenue of $1.3 billion to $1.4 billion. This guidance falls short of previous estimates, which the company set at an EPS of $1.65 to $1.90 per share on revenue between $1.4 billion to $1.5 billion. On average, Wall Street analysts were expecting earnings of $1.75 per share on sales of $1.46 billion. Woodward also announced plans to acquire HR Textron, a division of Textron ( TXT), for about $365 million in cash. HR Textron manufactures systems for weapons, aircraft, turbine engines and combat vehicles. Woodward said that the acquisition would not affect its earnings per share in 2009, and would add to its EPS in 2010. We removed shares of Woodward from our "Recommended" list on Sept. 17, when the stock was trading at $39.42. The company has a 1.39% dividend yield, based on last night's closing stock price of $17.22.
The stock has technical support around the $6.50 to $8 price marks. If the shares can firm up, we see overhead resistance around the $18 to $20 levels. We would look elsewhere for a better investment opportunity at this time. Woodward Governor is not recommended at this time, holding a Dividend.com rating of 2.7 out of 5 stars.
Edison International Narrowly Misses Fourth-Quarter Earnings Estimates California-based electricity producer Edison International ( EIX) said Monday that its fourth-quarter earnings missed analyst expectations by 1 penny per share. The company said that its fourth-quarter net income rose approximately 3% to $217 million, or 66 cents a share, from $211 million, or 64 cents a share, in the year-ago period. Operating revenue rose to $3.2 billion from $3.1 billion in the same period last year. On average, Wall Street analysts were expecting EPS of 67 cents per share on revenue of $3.21 billion. Edison said it will withhold its 2009 earnings outlook until the California Public Utilities Commission makes its ruling on new rates for SoCal Edison, the company's Southern California division. We removed Edison International from our "Recommended" list on Aug. 1, when shares were trading at $48.34. The company currently has a dividend yield of 4.56%, based on Friday's closing stock price of $27.22. The stock has technical support at the $25 level. If that fails to hold, we may test the $18 to $20 levels next. If the shares can firm up, we see overhead resistance around the $36 level. We would remain on the sidelines for now. Edison International 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.