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dog of the dow for 2012 - dividendincomestocks.com
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Feb 162012
 

GE Logo Dog of the Dow #5, General Electric (GE)

The #5 dog of the dow for 2012 is General Electric, (Ticker symbol GE).  General Electric is the 6th largest company in the United States, and is a 200 billion dollar cap company; General Electric was founded in Schenectady New York.  GE is a very old company, established back in 1892.  GE is currently split up in four segments, Technology Infrastructure, Energy, Capital Finance and Consumer & Industrial.

In 1896, GE was one of the original 12 companies to be listed on the newly founded Dow Jones Industrial Exchange.  It is the only one that remains today from the original 12.

GE went through a 20 year period of exceptional growth, where the stock value went from 1 dollar a share (split adjusted) in 1980, to a high of 59.88 in August of 2000.  However after 2000, GE has experienced a significant drop in their stock value.  Over the next two and a half years, GE lost over half of their value, as the stock fell in the 22 dollar range, during the 2003 recession.

GE once again came back, experiencing strong growth into 2008, with share prices going over 40 dollars a share.  A solid dividend of 31 cents a quarter made it a strong stock during this period.  Then 2009 happened, and the stock fell all the way to 7.06 a share.  GE had to change course of their company.

During 2009, GE cut back their dividend from 31 cents a quarter to 10 cents a quarter.  GE has come back from 7.06 a share to just over 19 dollars a share today.  The dividend has also been increased, though not back to levels in 2008.  The current quarterly dividend is 17 cents a share.  Its current dividend yield is 3.6%.  However, I would believe that GE will probably boost their dividend once again in 2012, working it back towards the levels we seen in 2008.

GE earnings were $1.24 a share for 2010, and were just reported at $1.37 for 2011 and projected to be $1.56 for 2012 and $1.75 for 2013.  This is a company that is continuing to grow, even though it’s already huge.  All of this equates to an average P/E ratio of about 15.  Forward PE for 2012 is looking closer to 12 at the current projections.

My unofficial estimate is that GE will be the big winner in the Dogs of the Dow.  This Dog of the Dow will be at $25 a share by the end of the year, and the quarterly dividend will be increased to 19 cents.  GE has made money for its investors for almost a century, and minus the 10 years which have been up and down, its ready to be a top stock once again.

GE was a Dog of the Dow back in 2009.  Even with their poor year in 2009, if you bought the stock the first week of January, then sold it the first week of January in 2010, you would have still made a profit.  This is why, as I stated above, I will bet on GE making you a profit for 2012.

Disclosure: I currently do not own any shares of GE.  However, I may place a limit order on the stock during the month of February.

Go back to my original post for 2012 Dogs of the Dow. 2012 Dogs of the Dow

Originally published February 16, 2012

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Jan 252012
 

merck Dog of the Dow #3, Merck (MRK)The #3 dog of the dow for 2012 is Merck, (Ticker symbol MRK).  Merck is a 120 billion dollar cap company, one of the largest in the world in the Pharmaceutical business. Merck is a very old company, established back in 1891.  During World War I, it was confiscated as an assets (as most German assets were) and was then brought back as a private company after.

The company has manufactured, invented and sold drugs since the start of the company. Merck also publishes “The Merck Manuals” which are a series of medical reference books.  These include the top selling medical textbook, “Merck Manual of Diagnosis and Therapy”.

MRK has had some issues with their stocks over the past 8 years.  Once a stock that was riding around 45 dollars a share, it took a huge hit towards the end of 2004 when the company was forced to pull Vioxx off of the shelves.  The stock went down to below 26 dollars a share after the loss of the drug and imposing litigation. Merck’s stock rebounded all the way over 60 dollars a share early in 2008 before the great recession.  After May 2008, the stock never saw 40 dollars again.  Merck recently increased their dividend from 38 cents a share a quarter to 42 cents a share a quarter. Its current dividend yield is 4.29%.  The increase in dividend has boosted the stock from a 34 dollar a share stock to nearly that unreachable 40 dollars a share.  Also the dark cloud over drug stocks has started to clear and the public has started to favor them once again.

MRK earnings were $1.46 a share for 2010, and are projected to be around $3.76 for 2011 and $3.84 for 2012. This equates to an average P/E ratio of about 10.50.

My unofficial estimate is that MRK does not have the income gains to continue the growth they have shown here at the end of 2011 and early 2012, and the stock will stall around $42 a share, and may actually lose value during the year.  MRK will finish 2012 at around $38 a share.

Go back to my original post for 2012 Dogs of the Dow. 2012 Dogs of the Dow

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Jan 232012
 

Verizon logo Dog of the Dow #2, Verizon (VZ)

The #2 dog of the dow for 2012 is Verizon Communications, (Ticker symbol VZ).  Verizon is a 110 billion dollar cap company, making it one of the largest in the United States, though worth about 70 billion less than ATT. The company began its existence as Bell Atlantic in 1983, when the Bells were forced to split. Over time, they have bought back many of the “baby bells” much like ATT, and after a merger with GTE in the year 2000, the company changed its name to Verizon from Bell Atlantic.  At that time, their ticker symbol also changed from BEL to VZ.

The company originally specialized in local and long distance phone calls via landlines. Verizon still currently has 140 million landline accounts.  However, after the merger with GTE, they now own 55% of a company now known as Verizon Wireless.  The merger with GTE was one of the largest ever in history, 52 billion dollars.

VZ stock price has never really recovered from the glory days of the late 1990’s. Verizon’s stock (known as BEL during that time), was up to values close to 67 bucks a share.  After April 2000, the stock never saw 60 dollars again, and after 2001, it has never seen 50 dollars a share.  However since 2001, the dividend has gone up from 38.5 cents a share a quarter to 50 cents a share a quarter. Its current dividend yield is 5.13%.

VZ earnings were $2.17 a share for 2011, and are estimated to be $2.53 for 2012. This equates to an average P/E ratio of just under 18.

My unofficial estimate is that VZ just does not have the sales and income gains to even make the EPS reports that are coming out currently and will not gain value during 2012, and may actually lose value during the year.  VZ will finish 2012 at around $37 a share.

Go back to my original post for 2012 Dogs of the Dow. 2012 Dogs of the Dow

Disclosure: I do not own any shares of VZ, nor do I plan to purchase any.

Dog of the Dow #2 Verizon, Originally posted January 23, 2012.

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