RPK

Washington Mutual: Is Dividend Okay?

The increase in the dividend yield is due primarily to the approximately 1/3 YTD drop in stock price. Washington Mutual may have to cut their dividend but it is still profitable and will most likely not fail. Most of the reduction in profit is a result of increasing loss provisions, which may have been elevated this quarter, making up for low provisions in past quarters and in anticipation of future quarters.

LeapFrog Stock Should Rise On Christmas Buying

If you bought in March you most likely paid between $10 and $10.50 per share. LF closed at $9.23 today and hit a low of $6.80 at the end of August and early September. I would characterize it as Mr. Toad's Wild Ride rather than a winner. Of course your thesis may prove correct and LF may exceed estimates this holiday season.

The Case For Stock Buybacks vs. Dividends

The best thing to do with short-term excess cash is to reinvest for future growth or pay down long-term debt, not initiate a buyback.

Paying special dividends at the end of the year, which is not addressed in your article, addresses most of your concerns regarding the cyclical nature of cash flows, the uncertainity of the business cycle, and preserving corporate flexibility.

While it may be true, as you imply, that corporate managers are catering to institutional investors, most retail investors prefer dividends as they can decide what to do with cash returned to the shareholder.

Citi Got a Good Deal on the Online Bank 'Egg'

When I originally wrote the analysis I had included a paragraph on the lack of profitability at Egg. This is obviously why Citi got such a good deal. Most of the losses, however, are due to unsecured loans going bad. My feeling is that Citi will weed out bad loans and apply a stricter approval process for future loans. In the end I still feel Citi got a good deal on which to expand their online presence.