5 Ex-Dividend Stocks With Buy Ratings

NEW YORK ( TheStreet) -- The following stocks go ex-dividend Thursday, meaning an investor must purchase the shares Wednesday to qualify for the next dividend payment: Apache ( APA), CVS Caremark ( CVS), Hormel Foods ( HRL), Washington Post ( WPO) and Weight Watchers ( WTW).

Each of the stocks received a buy rating from TheStreet Ratings.

Apache

The independent energy company is scheduled to report first-quarter results on May 3. Analysts, on average, anticipate earnings of $3.07 a share on revenue of $4.56 billion.

"APA continues to trade at the cheapest valuation in the large cap E&P sector despite signs the bear case in Egypt is not playing out," Credit Suisse analysts wrote in a March 27 report. "We believe this is a compelling entry point as its portfolio should deliver 8-10% production growth in 2012. We also expect strong growth in 2013 (7-9%) as more than 50% of this year's capex program is targeting longer-duration projects."

Forward Annual Dividend Yield: 0.7%

Rated "B (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin was about the same as it was the previous year.

Apache has weak liquidity. Its Quick Ratio is 0.68, which demonstrates a lack of ability to meet its short-term cash needs.

In the fourth quarter, stockholders' net worth increased 18.93% from the prior year.

TheStreet Ratings' price target is $109.61.

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CVS Caremark

The drugstore chain is scheduled to report first-quarter results on May 2. Analysts, on average, expect earnings of 63 cents a share on revenue of $30.31 billion.

"Sales of lower priced generic drugs are expected to increase faster than those of branded drugs," Trefis analysts wrote in an April 4 report. "This growth will be supported by the fact that patents for a large number of branded drugs will expire soon (For example Pfizer's Lipitor drug with $11 billion in annual sales lost patent protection in Nov 2011). In 2011 alone, $50 billion worth of drugs would lose patent protection, opening them to generics and driving higher margins. Generics are cheaper than the costlier patent-protected drugs and hence shall drive lower Revenue per Retail prescription. In 2012, we expect the conversion to generic drugs will account for almost a 4% reduction in overall prescription revenues for CVS Caremark, leading to a decline in Revenue per Retail Revenue per Retail prescription."

Forward Annual Dividend Yield: 1.5%

Rated "A (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin decreased from the previous year.

CVS Caremark has weak liquidity. Its Quick Ratio is 0.62, which demonstrates a lack of ability to meet its short-term cash needs.

In the fourth quarter, stockholders' net worth remained about the same from last year.

TheStreet Ratings' price target is $54.32.


Hormel Foods

The food production and marketing company is scheduled to report second-quarter results on May 23. Analysts, on average, expect earnings of 42 cents a share on revenue of $2.05 billion.

"Management has put together a compelling argument for why investors are overestimating the company's exposure to volatility in the commodity markets and underestimating the potential for earnings growth off of 'peak' levels," Credit Suisse analysts wrote in an April 3 report. "But let's face it; these efforts have proven largely futile. The stock remains mired at P/E valuation below 9x."

Forward Annual Dividend Yield: 2.1%

Rated "A- (Buy)" by TheStreet Ratings: The company's first-quarter gross profit margin decreased from the previous year.

Hormel Foods has average liquidity. Its Quick Ratio is 1.45, which shows the company can technically meet short-term cash needs.

In the first quarter, stockholders' net worth increased 7.34% from the prior year.

TheStreet Ratings' price target is $34.25.

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Washington Post

The media company reported on Feb. 24 fourth-quarter earnings of $61.7 million, or $8.03 a share, down from year-earlier earnings of $79 million, or $9.42 a share.

"We see few short-term operating catalysts, but the firm's strong balance sheet and cash flows from core operations should allow the Post to continue repurchasing shares at attractive prices," Morningstar analysts wrote in an April 8 report.

Forward Annual Dividend Yield: 2.5%

Rated "B (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin was about the same as it was last year.

Washington Post has average liquidity. Its Quick Ratio is 1.16, which shows the company can technically meet short-term cash needs.

In the fourth quarter, stockholders' net worth decreased 7.52% from the prior year.

TheStreet Ratings' price target is $443.21.


Weight Watchers

The weight loss company reported on March 28 the results of its modified Dutch auction in which Weight Watchers accepted 8.78 million shares for $82 a share, a total about $720 million.

"WTW's pre-tender 2012 EPS outlook was slightly lower than expected at $4.20- $4.60, but simultaneously, WTW announced a modified Dutch auction, repurchasing nearly a quarter of the company with debt, demonstrating the power of WTW's cash flow capabilities," Bank of America Merrill Lynch analysts wrote in an April 2 report. "We estimate 45c of accretion from the tender in 2012, but continued benefit in '13 and beyond as WTW de-levers with cash flow."

Forward Annual Dividend Yield: 0.9%

Rated "B- (Buy)" by TheStreet Ratings: The company's fourth-quarter gross profit margin increased from the previous year.

Weight Watchers has very weak liquidity. Its Quick Ratio is 0.19, which demonstrates a lack of ability to meet its short-term cash needs.

In the fourth quarter, stockholders' net worth increased 41.02% from the prior year.

TheStreet Ratings' price target is $97.43.

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-- Written by Alexandra Zendrian

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