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Newell Rubbermaid

The consumer and commercial products company reported on April 27 profit of $79.3 million, 27 cents a share, up from year-earlier earnings of $75.7 million, or 25 cents a share.

"We find NWL's value story compelling and see material upside when the market ultimately discounts improvement," Bank of America Merrill Lynch analysts wrote in a report Tuesday. "NWL has delivered EPS commitments, more than doubled the dividend (on its way to a promised 30-35% payout ratio), and in our view, executed the turnaround script well, but to no avail on valuation. A riskoff trade is not helping, but this is proving more of a "show me" than expected, with recent progress garnering little appreciation from the market. While this is a top pick in mid-cap, it seems unlikely a new catalyst would emerge on Thursday."

Forward Annual Dividend Yield: 2.3%


Union Pacific

The rail company reported on April 19 first-quarter earnings of $863 million, or $1.79 a share, up from year-earlier earnings of $639 million, or $1.29 a share.

"Rob Knight, CFO of Union Pacific, expects coal volumes to decline at a mid- to high-teens pace in 2Q12, accelerating beyond the company's prior guidance of down low- to mid-teens on its 1Q earnings call (we are at 17%, as we anticipated continued weakness in coal with Nat Gas at sub-$3)," Bank of America Merrill Lynch analysts wrote in a May 18 report. "While UP expects volumes to pick up sequentially in June/July, inventory levels remain high and the industry needs to see an early hot summer for coal to moderate."

Forward Annual Dividend Yield: 2.2%

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-- Written by Alexandra Zendrian

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