Stocks finished the week with a three day losing streak while posting back-to-back weekly losses with the Dow Jones Industrial Index having its worst week of 2013 being down 2.23%, the S&P 500 was down 2.1% and the Nasdaq down 1.57%. The retail wreck I wrote about last week carried over to this week with Macy's (NYSE:M) reporting weaker than expected second quarter earnings and providing poor guidance which contributed to the stock being down 4.47%. Rising gas prices and government employees on furlough may have contributed to the consumer not going out to do some shopping. The tech wreck I wrote about at the end of July continued to spill over into August in the form of Cisco's (NASDAQ:CSCO) poor guidance on revenues between 3-5% when Wall Street was looking for 5%. The company also announced they will cut 4,000 jobs due to inconsistency in global gross domestic product. The job cuts do make sense because there probably are quite a few redundancies in positions due to the company acquiring quite a few companies lately. Regardless, 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.
L-3 Communications Holdings, Inc. (NYSE:LLL)
L-3 is a prime contractor in command, control, communications, intelligence, surveillance, and reconnaissance systems, aircraft modernization and maintenance, and government services. On 25Jul13, L-3 reported second quarter earnings of $2.03 per share. This result beat the $1.93 consensus of the 14 analysts covering the company and beat last year's second quarter results by 5.73%. L-3's PE ratio is among the lowest of any stock in the aerospace & defense industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value play. However, during the past year, earnings growth has lagged its historical five year growth rate. The stock is up 29.56% in the past year compared to the S&P500's 16.1% gain. The company went ex-dividend on 15Aug13 with a $0.55 per share dividend which will be payable on 16Sep13 for a yield of 2.41%.
Covidien PLC (COV)
Covidien is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings operating in the business segments of medical devices and medical supplies. The company spun off its pharmaceutical business Mallinckrodt Plc (NYSE:MNK) earlier in 2013. On 01Aug13, Covidien reported fiscal third quarter earnings of $0.84 per share. This result missed the $0.89 consensus expectations of the 18 analysts following the company. Covidien's PE ratio is among the lowest of any stock in the medical equipment & supplies industry and signals that investors have not been willing to pay a premium for this company's business prospects, making it a value play. The company went ex-dividend on 26Jul13 with a $0.26 per share dividend which was paid on 15Aug13 for a yield of 1.68%.
Hasbro Inc (NASDAQ:HAS)
Hasbro is engaged in providing children's and family leisure time products with a range of brands and entertainment properties. On 22Jul13, Hasbro reported second quarter earnings of $0.29 per share. This result missed the $0.34 consensus expectations of the 13 analysts following the company and missed last year's second quarter results by 12.12%. Hasbro's PE ratio is below the recreational products industry average and signals that investors are not willing to pay a premium for this stock, making it a value play. However, during the past year, earnings growth has lagged its historical five year growth rate. The stock is up 19.53% in the past year compared to the S&P500's 16.1% gain. The company went ex-dividend on 30Jul13 with a $0.40 per share dividend which was paid on 15Aug13 for a yield of 3.55%.
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'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 all three 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.
Disclosure: I am long COV, HAS, LLL. 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.
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!