Stocks finished the week on a positive note on Friday with the three major indices ending on the encouraging side of things. For the week the Dow Jones Industrial Index fell 0.5%, the S&P 500 was up 0.5% and the Nasdaq was up 1.5%. This was a week which included the Nasdaq halting trading due to technical issues which were not allowing its systems to disseminate the pricing of stocks, sales of new single-family homes falling 13.4% in July while existing home sales jumped 6.5%. During the week Home Depot (NYSE:HD) reported earnings which beat expectations but ended down 1.22% the day it reported and in contrast it's competitor Lowe's (NYSE:LOW) was actually up the day it reported earnings that also beat expectations. The earnings beat by these two companies and the news about existing home sales indicate that the "housing remodeling recovery" is still intact. However, the retail wreck continues to take place with Limited Brands (LTD) guiding below estimates for the coming quarter, showing that rather than spending money on things such as clothes, people would rather invest that money back into their homes. I maintain that it is still difficult to find good stocks these days and that's why I'm highlighting a select set of excellent companies which have had ex-dividend dates or paid out a dividend during this past week or early next week, which people should place on their radar.
Dunkin' Brands Group Inc (NASDAQ:DNKN)
Dunkin' Brands Group is a franchisor of quick service restaurants serving hot and cold coffee and baked goods, as well as hard serve ice cream in the form of Dunkin' Donuts and Baskin Robbins, respectively. On 25Jul13, Dunkin' reported second quarter 2013 earnings of $0.41 per share. This result beat the consensus of the 23 analysts following the company by $0.01 and beat last year's second quarter results by 24.24%. Dunkin's PE ratio is among the highest of any stock in the restaurants industry and signals that investors have high hopes for this company's future business prospects, making it a growth story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate. The stock is up 39.94% in the past year compared to the S&P500's 17.3% gain. The company went ex-dividend on 22Aug13 with a $0.19 per share dividend which will be payable on 04Sep13 for a yield of 1.76%.
Transocean Ltd (NYSE:RIG)
Transocean is an international provider of offshore contract drilling services for oil and gas wells. On 07Aug13, Transocean reported second quarter 2013 earnings of $1.08 per share. This result was in-line with the consensus of the 36 analysts following the company and beat last year's second quarter results by 50%! Transocean's PE ratio is among the lowest of any stock in the oil well services & equipment industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value play. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate. The stock is down 5.2% in the past year compared to the S&P500's 17.3% gain. The company went ex-dividend on 21Aug13 with a $0.56 per share dividend which will be payable on 18Sep13 for a yield of 4.85%.
Eaton Corporation PLC (NYSE:ETN)
Eaton is a global technology leader in electrical components to the aerospace and automotive industries, both of which are hot industries right now. On 02Aug13, Eaton reported second quarter earnings of $1.09 per share. This result missed the consensus of the 23 analysts following the company by $0.02 and missed last year's second quarter results by 5.22%. Eaton's PE ratio is in-line with the electronic instruments & controls industry average and implies that investors do not see anything special about this company's prospects. However, during the past year, earnings growth has lagged its historical five year growth rate. The stock is up 46.14% in the past year compared to the S&P500's 17.3% gain. The company went ex-dividend on 01Aug13 with a $0.42 per share dividend which was paid on 23Aug13 for a yield of 2.51%.
Williams-Sonoma Inc (NYSE:WSM)
Williams-Sonoma is a specialty retailer of products for the home. On 23May13, Williams-Sonoma reported first quarter 2014 earnings of $0.41 per share. This result beat the $0.37 consensus of the 27 analysts covering the company and beat last year's first quarter results by 20.59%. Second quarter 2014 earnings are slated for the week of August 25, 2013. Williams-Sonoma's PE ratio is below the furniture & fixtures industry average and signals that investors are not willing to pay a premium for this stock, making it a value play. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate. The stock is up 56.26% in the past year compared to the S&P500's 17.3% gain. The company went ex-dividend on 24Jul13 with a $0.31 per share dividend which was paid on 23Aug13 for a yield of 2.14%.
I've highlighted these names because they have all raised their dividend (or initiated them when it comes to Transocean) within the past year and are poised to do so again in the coming years. It's important in this market to be able to hold onto companies which raise their dividend rates because it is a sign that the underlying company is doing well financially. The importance of these stocks I've highlighted is that half the stocks I mentioned in this article are value plays while the broader market is getting choppy. I believe we are at a point in the market where we have to look for value.
Disclaimer: These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!
Disclosure: I am long RIG, ETN, DNKN, WSM, HD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.