Ex-Dividend Stocks: Bank of America, Lockheed, Wendy's

NEW YORK ( TheStreet) -- The following stocks go ex-dividend Wednesday, meaning an investor must purchase the shares Tuesday to qualify for the next dividend payment: Bank of America ( BAC), Sotheby's ( BID), Dick's Sporting Goods ( DKS), Kellogg ( K), Lockheed Martin ( LMT), PepsiCo ( PEP), SuperValu ( SVU), Tyson Foods ( TSN) and Wendy's ( WEN).

Bank of America

The bank reported on April 19 first-quarter earnings of $653 million, or3 cents a share, down from year-earlier earnings of $2 billion, or 17 cents a share.

"Bank of America lagged in 1Q in refinancing HARP eligible loans, with only about 1% of eligible loans refinanced in 1Q, and therefore it has large potential for increase in volumes," JPMorgan analysts wrote in a May 16 report. "There are some signs of pickup in HARP refis in 2Q as BofA's prepayment speeds have been well behind. If banks refi another 8-12% of eligible HARP loans, BofA would see the largest pick-up in origination revenues even if it is spread over 4 quarters, with about 3% benefit to 2012 EPS. SunTrust would be the next biggest beneficiary, with about 2.5-3% benefit. The rest of our banks would all see some benefit albeit smaller, as they are further along. BofA may not refi as much as larger peers but still has large potential upside from increase in refis."

Forward Annual Dividend Yield: 0.6%

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Sotheby's

The auctioneer company reported on May 10 a first-quarter loss of $10.7 million, or 16 cents a share, a reversal from year-earlier earnings of $2.4 million, or 3 cents a share.

"We expect global wealth creation in recent months should reinvigorate art market demand in upcoming quarters; thus, we believe shares of BID should trade relatively in line with the peer group average," Wedbush analysts wrote in a May 10 report. "Therefore, using a 2012E P/E ratio of 17x, we generate our PT of $46."

Forward Annual Dividend Yield: 1.1%


Dick's Sporting Goods

The sporting goods retailer reported on May 15 first-quarter earnings of $57.2 million, or 45 cents a share, up from year-earlier earnings of $37.5 million, or 30 cents a share.

"Troubles at DKS will more likely be of its own making, and not caused by outside influences such as Amazon," Sterne Agee analysts wrote in a May 17 report. "Over the past few years, we have been very critical of DKS due to what we perceive as a lack of service, including too few associates on the sales floor and the open stock footwear model. To this point, we have been wrong, but the concerns remain. The high end product offerings and the beautiful stores need to have service that live up to a very high standard. We do believe that new staffing optimization systems and learnings from the investment in JJB Sports will help improve the service levels and position the company well for the future."

Forward Annual Dividend Yield: 1.1%

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Kellogg

The cereal company reported on April 26 first-quarter earnings of $358 million, or $1 a share, down from year-earlier earnings of $366 million, or $1 a share.

"We remain concerned about Kellogg's competitiveness in the nearterm," Credit Suisse analysts wrote in a May 11 report. "Kellogg's hedges have left them with surprisingly high commodity inflation in the second half of the year (up 6%). If Kellogg's competitors took short-term positions, they would have more flexibility to invest in short-term promotions to boost struggling volumes. In addition, while customer disputes have been 'resolved' in Europe to Kellogg's satisfaction, we can't help but wonder if Kellogg's competitors have agreed to the deep discounts that the retailers were asking for."

Forward Annual Dividend Yield: 3.4%


Lockheed Martin

The defense company reported on April 26 first-quarter earnings of $668 million, or $2.03 a share, up from year-earlier earnings of $530 million, or $1.50 a share.

"Proceeding with public planning as if budget sequestration will not take place, LMT sees orders strengthening as typical late this calendar year," Drexel Hamilton analysts wrote in a May 7 report.

Forward Annual Dividend Yield: 4.8%

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PepsiCo

The soft drink company reported on April 26 first-quarter earnings of $1.13 billion, or 71 cents a share, compared with year-earlier earnings of $1.14 billion, or 71 cents a share.

"PEP is our favorite turnaround story in our food & beverage universe," Bank of America Merrill Lynch analysts wrote in a May 16 report. "In our view, PEP is making strides internationally driven by structural changes in China and Mexico, integration in Russia, and improving consumer trends in Eastern Europe. Further, a more rational competitive environment in the US coupled with increased marketing should support its North America turnaround efforts."

Forward Annual Dividend Yield: 3.2%


SuperValu

The wholesale food retailer reported on April 10 a fourth-quarter loss of $424 million, or $2 a share, a reversal from year-earlier earnings of $95 million, or 44 cents a share.

"The PPI - CPI spread narrowed in April to 0.2%, the tightest level in over twoyears, indicating that grocers have been passing though costs increases on a more timely basis, protecting GPM, which we saw with WFM's recent FQ2 results," Deutsche Bank analysts wrote in a May 15 report. "With key categories turning deflationary in recent months, the grocers have had some opportunity to hold prices and capture additional margin. However, we have doubts that these margin gains can be sustained given the highly competitive environment and focus on volume growth, which has beenelusive for some large players, including SWY and SVU."

Forward Annual Dividend Yield: 7.2%

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Tyson Foods

The food products company is scheduled to report third-quarter earnings on Aug. 6. Analysts, on average, anticipate earnings of 54 cents a share on $8.72 billion in revenue.

"We continue to recommend TSN on company-specific efforts to improve mix and cost positioning," Deutsche Bank analysts wrote in a May 18 report. "Chicken has inflected and pork processing conditions have strengthened recently. In Beef, TSN proved to be best-in class in the March quarter when compared to its peers. We believe cattle supply is sufficient in TSN's regions for the balance of the FY-end Sep as dictatedby on-feed numbers above. For F2013E, we will watch for signs of a pickup in heifer retention and/or a slowdown in cattle imports."

Forward Annual Dividend Yield: 0.8%


Wendy's

The fast food chain reported on May 8 first-quarter earnings of $12.4 million, or 3 cents a share, a reversal from a year-earlier loss of $1.4 million.

"The share authorization plan has still not been reauthorized as the company focuses cash on strategic investments," JPMorgan analysts wrote in a May 9 report. "We continue to assume no share buybacks in F12. Importantly though, the company expects an annualized about $25m interest expense reduction beginning in 3Q12 from the $1.325b refinancing of the existing $445m term loan and 10% senior notes (fully callable on July 15 at a 7.5% premium). Our assumed blended interest expense to achieve such savings is 5.4% vs. 8.3% blended rate in 1Q. If we assume no discretionary remodel or new unit capex ($40m each in 2012), FCF yield would grow to 4.9% in F12, but at that point the company would have a difficult-to-defend asset base against an increasingly dominant McDonald's. The company currently trades at 19.0x lowered C13 EPS of $0.24, suggesting limited multiple expansion relative to the 18-22x where global QSR companies including YUM (19.2x) and SBUX (22.3x) trade, and a generous premium to lower-volatility MCD (14.7x), in our view. As such we maintain our Neutral rating on the name."

Forward Annual Dividend Yield: 1.8%

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-- Written by Alexandra Zendrian

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