Our Dividend Yield Theory looks at blue chip stocks, which have the tendency to follow a repetitive pattern of moving from historic parameters of high yield to low yield, and then back to high yield. This marks levels of historic under and overvaluation, explains Kelley Wright, editor of IQ Trends.
This theory can also be applied to the Dow Jones Industrial Average (INDU), which has also displayed a long-term, repetitive tendency to fluctuate between high and low dividend yield extremes. Indeed, looking at broad market behavior, we've seen three signs of Overvalued conditions.
1) the percentage of Undervalued stocks falls to 17% or less;
2) the percentage of Overvalued stocks is greater than the percentage of Undervalued stocks;
3) the dividend yield of the Dow Jones Industrial Average declines to within 10% of its historically repetitive area of low yield.
When the above Overvalued conditions have occurred simultaneously, there is historical precedent, or a tendency for, a broad market decline sufficient to remove these conditions as areas of concern.
5 Best Growth Stocks To Watch For 2015: McDonald's Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
Advisors' Opinion:- [By Associated Press]
DETROIT (AP) -- The only two McDonald's (NYSE: MCD ) restaurants in the United States that serve food prepared according to Islamic law have stopped doing so.
- [By Chris Hill]
Shares of McDonald's (NYSE: MCD ) fell on Friday after the company reported that global sales dropped in the first quarter. After hitting an all-time high earlier in April, is the stock poised for a rebound, or more of a pullback? In this segment, James Early shares his hope for humanity, while analyzing the restaurant giant.
- [By Mark Morelli]
Large companies like Wal-Mart Stores� (NYSE: WMT ) , McDonalds (NYSE: MCD ) , and Home Depot (NYSE: HD ) could profit from the excess cash that oil-field workers and their families can afford to spend.�
Best Blue Chip Companies To Invest In 2014: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By TaniaC]
Colgate-Palmolive Company (CL) is a consumer products company whose products are marketed in over 200 countries and territories throughout the world. It operates in two segments: Oral, Personal and Home Care and Pet Nutrition.
- [By Dan Caplinger]
Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Colgate-Palmolive (NYSE: CL ) , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.
- [By Ben Levisohn]
Shares of Procter & Gamble have dropped 3.2% during the past 12 months, lagging Unilever’s (UL) 2.5% rise, Colgate-Palmolive’s (CL) 8.7% advance and Kimberly-Clark’s (KMB) 3.1% gain.
- [By Eric Volkman]
It's one of the steadiest dividend payers on the market, and it's continuing to fly level. Colgate-Palmolive (NYSE: CL ) has declared a fresh quarterly common stock dividend, which is to be $0.34 per share, paid on August 15 to shareholders of record as of July 23. That amount matches the firm's previous distribution; this was paid in May. Prior to that, Colgate-Palmolive handed out $0.31 per share.
Best Blue Chip Companies To Invest In 2014: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.
Advisors' Opinion:- [By Russ Kaplan]
Our pick is the well-known blue chip company International Business Machines (IBM). Technology has changed drastically since 1910, and IBM has always risen to a challenge, which, over the years, has left many high tech companies in the dust.
- [By Dan Caplinger]
On Wednesday, IBM (NYSE: IBM ) will release its quarterly report, and investors will be watching closely to see if the tech giant can finally get its sales moving higher after a long stretch of sluggishness. Although Cisco Systems (NASDAQ: CSCO ) has faced some of the same challenges as IBM, Oracle (NYSE: ORCL ) has found ways to find growth. IBM needs to work on getting its share of the growing cloud-computing and data-analytics pie in order to keep itself moving in the right direction.
- [By Mani]
[Related -International Business Machines Corp. (IBM): More Potholes In The Road To $20 In 2015]
Global Technology Services unit revenues decreased 4 percent to $9.9 billion. Global Business Services segment revenues were up 1 percent to $4.7 billion. The estimated services backlog at Dec. 31 was $143 billion, up 2 percent.
- [By Raymond Boisvert]
IBM (NYSE: IBM ) -- Year-to-date return: 1.2%
IBM has fluctuated considerably over 2013. Expectations for the first quarter proved to be overstated when the company reported a rare earnings miss. Revenue and EPS both fell short of consensus estimates. Among other challenges, IBM cited weakness in the yen and an inability to close certain software deals before the quarter ended. IBM was also plagued by industrywide decline in hardware sales and competition from Oracle and others.
Best Blue Chip Companies To Invest In 2014: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Tim Brugger]
With its stock price down 35% over the past six months, and concerns about a lack of innovation and growing competition, Apple (NASDAQ: AAPL ) doesn't need the PR nightmare that its new uber campus will likely become. According to an "anonymous insider,"�who spoke with Businessweek,�Steve Jobs' dream of "building the best office building in the world" will become a reality -- for what's estimated to be a staggering $5 billion price tag. The money itself isn't the problem, of course; Apple has that in its petty cash drawer. But the timing of the project? That's another matter altogether.
- [By Rahul Chattaraj]
The mighty Apple (AAPL) has greatly reaped benefits from its epic innovation ��Phone. Smartphones have been around us in various forms since early 2000. But, right from its introduction in 2007, till the present day Apple has made millions by revolutionizing the smartphone experience, the latest and the greatest contribution being made by the iPhone 5S.
- [By Holly LaFon]
David Tepper, president of hedge fund Appaloosa Management, is a value investor but known for exceptional market timing as well. Therefore, his drastic portfolio changes in the fourth quarter raise questions. Tepper sold out of 26 positions and reduced 9 by more than half. He also bought four new positions and added a great deal of Apple (AAPL). Institutional Investor reports that he was 30 to 40 percent cash in the third quarter, and now he has sold even more of his holdings in the fourth quarter.
Best Blue Chip Companies To Invest In 2014: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Selena Maranjian]
Other large-cap stocks didn't do quite so well over the last year but could see their fortunes change in years to come. Philip Morris International (NYSE: PM ) , for example, gained 5% and yields 4.1%. With domestic tobacco companies challenged by tightening regulations, rising taxes, and a shrinking smoking base, many have assumed that Philip Morris is the best bet in tobacco. But in the third quarter, it posted the weakest results, with volume taking a sizable drop and a strong dollar reducing its earnings. Bulls like its innovation and share buybacks.
- [By Ben Levisohn]
Phillip Morris (PM) gained 2.8% to $86.56 after boosting its dividend by 10.6%.
Restoration Hardware (RH) dropped 12% to $68.04 despite what many considered to be a solid earnings�report. Not Barron’s.
- [By Ted Cooper]
Philip Morris International (NYSE: PM ) returned 146% in stock price increases and dividends over the last five years. That's an average of nearly 30% per year. Clearly, investors who owned Philip Morris for any significant length of time during the last five years made out pretty well. Unfortunately, two new developments have emerged to make future returns less certain. All Philip Morris investors need to know about these two things before deciding whether to hold or sell their stock.
- [By Tim Melvin]
Some of the traditionally defensive stocks like Phillip Morris International (PM) and Merck (MRK) also fail our test for operating conditions and financial changes. Yield chasers have also pushed the value of their shares to unsustainable levels, and are unlikely to see much more than mid- to low-single-digit profit growth for several years.
Best Blue Chip Companies To Invest In 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By Ben Levisohn]
The Dow’s comeback–if erasing a 0.4% drop can be called a comeback–was especially impressive considering that the four highest-priced stocks, and the ones with the biggest weights in the index, finished in the red. Visa (V) fell 0.6% to $220.55–perhaps a side-effect of this American Express (AXP) upgrade?–while Goldman Sachs (GS) fell 0.6% to $161 after naming a third co-head to its securities division, and 3M (MMM) declined 0.5% at $129.70. International Business Machines (IBM) dipped 0.1% to $177.14.
- [By Charley Blaine]
Visa (NYSE: V): Tuesday close: $212.06. P/E ratio: 25.09.
The credit-card processor is seeing growth around the world. It also expects, like Nike, to be a winner from the World Cup.
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