5 Downward Trending Dividend Stocks That Should Be Put On Your Shopping List

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 |  Includes: AAPL, AMGN, ED, MDT, WFC
by: Abba's Aces

Is the economy stronger than we actually think? It definitely has the fortitude to keep climbing higher. Stocks erupted higher on Friday amid an astonishingly excellent jobs report number. The Dow Jones Average Industrials Index (NYSEARCA:DIA) closed at another all-time high with the index up 0.9% from the prior week while the S&P500 (NYSEARCA:SPY) and Nasdaq (NASDAQ:ONEQ) were up 0.5% and 1.6% respectively during the same time frame. I find the job report to be extremely good news for us as a country, but I'd like to see at least another two consecutive months of blowout employment numbers before I begin to believe the hype and purchase blue-chip stocks with growth expectations. For now I will continue the course and purchase value stocks for my dividend portfolio. Because the market is at all-time highs still I maintain that it is difficult to find good stocks these days. That's why I'm highlighting a select set of excellent value companies in my dividend growth portfolio which have had ex-dividend dates or paid out a dividend during this past week or early next week that people should place on their radar.

Apple Inc. (NASDAQ:AAPL)

Apple designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. On 28Oct13, Apple reported fiscal fourth quarter 2013 earnings of $8.26 per share. This result was beat the consensus of the 47 analysts following the company by $0.30 and missed last year's fourth quarter results by 4.73%. Apple's PE ratio is below the computer hardware industry average and signals that investors are not willing to pay a premium for this stock, making it a value story. However, during the past year, earnings growth has lagged its historical five year growth rate.

The company went ex-dividend on 06Nov13 with a $3.05 per share dividend which will be paid on 14Nov13 for a yield of 2.34%. During the week mobile ad services firm Fiksu reported the newly released iPad Air is seeing five times the usage the iPad 4 did two days after its launch and more than three times that of the iPad Mini. This news bodes well for the company as consumers are welcoming the new iPad air with open arms. In addition to this good news, Deutsche Bank (NYSE:DB) indicates that channel supplies for the Air are good and is saying that iPhone 5S demand is outpacing supply in all of its checks while lead times for the gold 5S units remain high… I believe the only place I was able to find a gold 5S phone was at Radio Shack (NYSE:RSH), maybe that's only because nobody really goes to Radio Shack anymore. There was also a bit of mixed news that strong low-end Lumia 520 phone sales are strengthening in Europe, dropping Apple's iPhone share to 14.6% while sales of the iPhone have picked up in the U.S. to 35.9%, fallen Chinese share to 13.8% and Latin America share have risen to 6.6%. Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle ground territory with a current value of 58.12, while the MACD chart below shows the black line crossing below the red line with downward trajectory and decreasing divergence bars, meaning there may be some downward pressure on the stock price. I anticipate the stock to drop for now and then I will evaluate again before buying shares.

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Wells Fargo & Co. (NYSE:WFC)

Wells Fargo is a bank holding company which operates in three segments: Community Banking, Wholesale Banking and Wealth, Brokerage and Retirement. On 11Oct13, Wells Fargo reported third quarter 2013 earnings of $0.99 per share. This result beat the consensus of the 31 analysts following the company by $0.02 and beat last year's third quarter results by 12.50%. Wells Fargo's PE ratio is among the lowest of any stock in the regional banks industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

The company went ex-dividend on 06Nov13 with a $0.30 per share dividend which will be paid on 01Dec13 for a yield of 2.81%. With the improved jobs report number that came out on Friday we saw an increase in the 10-year treasury, and with a steepening yield curve it bodes well for the banks such as Wells Fargo which popped 2.4% on the day. Also, during the week the company agreed with the Federal Housing Finance Agency on a settlement of $335 million for mortgages it sold to Fannie and Freddie last week. The company says there will not be a charge in the fourth quarter for this settlement as it has already reserved the money for it. Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle ground territory with a current value of 57.74, while the MACD chart below shows the black line crossing below the red line with downward trajectory and decreasing divergence bars, meaning there may be some downward pressure on the stock price. I anticipate the stock to drop for now and then I will evaluate again before buying shares. For a more detailed analysis of the stock click here for the article I wrote just a couple of days ago.

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Amgen Inc. (NASDAQ:AMGN)

Amgen is a global biotech company (the first of its kind) which discovers, develops, manufactures and delivers human therapeutics. On 22Oct13, Amgen reported third quarter 2013 earnings of $1.94 per share. This result beat the $1.77 consensus of the 20 analysts covering the company and beat last year's third quarter results by 16.17%. Amgen's PE ratio is below the biotechnology & drugs industry average and signals that investors are not willing to pay a premium for this stock, making it a value story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

The company will go ex-dividend on 12Nov13 with a $0.47 per share dividend which will be paid on 06Dec13 for a yield of 1.66%. It was a pretty quiet week in terms of news pertaining to the company specifically with no press releases being issued. Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle ground territory with a current value of 47.13 with downward trajectory, while the MACD chart below shows the black line below the red line with downward trajectory and decreasing divergence bars, meaning there may be some downward pressure on the stock price. I anticipate the stock to drop for now and then I will evaluate again before buying shares.

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Consolidated Edison Inc. (NYSE:ED)

Consolidated Edison Inc. is a holding company that owns Consolidated Edison Company of New York, and Orange & Rockland Utilities. On 04Nov13, Edison reported third quarter 2013 earnings of $1.48 per share. This result beat the consensus of the 15 analysts following the company by $0.06 and beat last year's third quarter results by 2.78%. Edison's PE ratio is below the electric utilities industry average and signals that investors are not willing to pay a premium for this stock, making it a value story. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

The company went ex-dividend on 08Nov13 with a $0.615 per share dividend which will be paid on 15Dec13 for a yield of 4.3%. The only bit of news that occurred at the company during the past week was the earnings report on 04Nov13 of $1.48 per share on revenue of $3.48 billion versus expectations of $1.42 and $3.46 billion. Revenue from the electric business (Edison's largest top-line contributor) rose 0.4% while operating expenses added 1.6% to $2.63 billion. Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle ground territory with a current value of 54.04 with downward trajectory, while the MACD chart below shows the black line crossing below the red line with downward trajectory and decreasing divergence bars, meaning there may be some downward pressure on the stock price. I anticipate the stock to drop for now and then I will evaluate again before buying shares.

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Covidien plc (COV)

Covidien is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. On 08Nov13, Covidien reported fiscal fourth quarter 2013 earnings of $0.91 per share. This result beat the consensus of the 19 analysts following the company by a penny and missed last year's fourth quarter results by 10.78%. Covidien's PE ratio is below the medical equipment & supplies industry average and signals that investors are not willing to pay a premium for this stock, making it a value story.

The company went ex-dividend on 08Oct13 with a $0.32 per share dividend which was paid on 05Nov13 for a yield of 2.01%. The only bit of news that occurred during the week was that the company reported fiscal fourth quarter earnings of $0.91 on revenue of $2.56 billion versus expectations of $0.90 and $2.56 billion. Medical device sales rose by 3% driven by growth in new products and higher volume while medical supplies were lower than last year's fourth quarter results. Gross margins expanded to 58.1% and maintained fiscal year 2014 guidance the same with revenue growth of 2-5% and operating margins of 21.5 to 22.5%. Let's take a quick look at the technicals here to see if it can be bought at these levels or if a pullback is coming. As we can see, the relative strength index is in middle ground territory with a current value of 53.97 with downward trajectory, while the MACD chart below shows the black line crossing below the red line with downward trajectory and decreasing divergence bars, meaning there may be some downward pressure on the stock price. I anticipate the stock to drop for now and then I will evaluate again before buying shares.

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Conclusion

I've highlighted these names, because they have all raised their dividend within the past year and are poised to do so again in the coming years. It is 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 they are value plays while the broader market is at all-time highs. 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 AAPL, AMGN, COV, ED, WFC, SPY, ONEQ, DIA. 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.