The dividend stock downgrades continued to outpace the upgrades last week when more than 10 dividend-paying stocks were downgraded. We are highlighting the six most recognizable names to help investors stay updated on analyst opinions. Each of these stocks has a dividend yield of 2% or more. We have listed the reason for the downgrade when the investment firm made it available.
Alliant Energy Corp (LNT)
Alliant Energy was downgraded by Wunderlich on May 7th from a Buy to a Hold with a price target of $45 per share. Wunderlich cited slower projected growth based on deferred tax balance as the reason for the downgrade. LNT has a dividend yield of 3.9% and a payout ratio of 86%. The company has increased its dividend for 8 years and has a 5-year dividend growth rate of 6.4%.
Analog Devices (ADI)
Analog Devices was downgraded by UBS from a Buy to Neutral on May 9th with a price target of $40 per share. UBS said the downgrade was based on fading momentum. The downgrade matches previous downgrades UBS has made in the sector. ADI has a dividend yield of 2.8% and a payout ratio of just 41%. The company has increased its dividend for 8 consecutive years and has a 5-year dividend growth rate of 9.%.
Herbalife (HLF)
Herbalife was downgrade by Caris & Company from a Buy to Average on May 9th with a price target of $39 per share. Caris said the downgraded was based on a possible announcement from David Einhorn that he has a large short position on the stock. Caris also said that if Einhorn does not announce a short position at the May 16th meeting the stock may pop. HLF has a dividend yield of 2.2% and a payout ratio of 29%. The company has increased its dividend for 2 consecutive years and has a 5-year dividend growth rate of 25%.
Rentech Nitrogen Partners LP (RNF)
Dahlman Rose downgraded Rentech from a Buy to a Hold on May 9th. Dalhman Rose said the potential for an exceptional corn crop under a variety of acreage and yield scenarios, counters almost all of the bullish theses for fertilizer shares. We are not focused on the payout ratio for Rentech because it is a limited partnership. RNF has a dividend yield of 4.7%. It is a limited partnership so we are not focused on the payout ratio. The Partnership just started paying distributions in 2012.
RPC Inc (RES)
RPC was downgraded by Standpoint Research on May 9th from a Buy to a Hold. Standpoint said the downgrade was based on the fact that shares are over extended after the recent 20% run up. RES has a dividend yield of 2.4% and a payout ratio over 100. The company has a 5-year dividend growth rate of 32%.
JPMorgan Chase (JPM)
JPMorgan was downgraded by Stifel Nicolaus and FBR Capital on May 10th. Both investment firms cited future earnings uncertainty after the company disclosed a large, illiquid hedge position which has already resulted in a $2B loss. JPM has a dividend yield of 2.8% and a payout ratio of 23%. The company has increased its dividend for 2 years and has a 3-year dividend growth rate of 60%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
