Market Wrap-Up for Feb.25 (NTRI, WFC, DE, CAT, ETN, JCP, more)
It was an overall rocky week for the markets, but this has been one of the biggest weeks in recent memory when it comes to dividend increases. We have seen payout boosts this week from the likes of Home Depot ( HD ), Genuine Parts ( GPC ), CME Group ( CME ), Blackrock ( BLK ), Gap Inc. ( GPS ) and numerous others. Plus, we have seen well-known companies like Wellpoint Inc. ( WLP ), Kohl's ( KSS ), CEC Entertainment ( CEC ) (Chuck-E-Cheese's owner), and Interpublic Group ( IPG ). We expect more companies that have not ever paid a dividend to come on board the dividend express as time moves on.
Lots of drama surrounding the NYSE Euronext ( NYX ) takeover as we hear the Nasdaq OMX Group( NDAQ ) may be frantic to make a last-second charge into the picture. They were probably surprised by the announcement the NYSE would be selling out to European exchange operator Deutsche Borse. My business gut tells me a rushed bid by the Nasdaq may not be their best option when it comes time to figuring out how they would integrate the exchanges and maximize profits from the deal, not to mention any potential antitrust issues.
On a side note, did anyone notice General Motors ( GM ) broke below its IPO price yesterday after the shares slid following the company's earnings release? The auto giant recently re-listed but still does not pay a dividend, so we do not presently cover the stock from a ratings standpoint.
We made some changes to our recommended list today, so be sure to check out the links below if you did not read the e-mail alerts we sent out earlier. The market is getting a much-needed bounce today after what has been a poor week for the averages. We saw some of the dividend growth plays rebounding, including Deere ( DE ), Caterpillar ( CAT ), and Eaton Corp ( ETN ). Shares of Wells Fargo ( WFC ) were up as analysts continue to expect the company to raise its dividend to respectable levels sometime soon. Unlike Weight Watchers' ( WTW ) recent earnings blowout, Nutrisystem ( NTRI ) shares were walloped following the company's earnings report. Retailer J.C. Penney ( JCP ) finished lower after it posted its earnings numbers.
According to a recent study by the Employee Benefit Research Institute, nearly half (47%) of early baby boomers aged 56 to 62 are at risk of outliving their retirement savings. Late boomers (46 to 55) and generation Xers (36 to 45) are also at a huge risk as 43% and 45% of those groups, respectively, will be unable to afford the growing cost of retirement. Remember there is hope. When I was on Stu Taylor's Equity Strategies radio show yesterday, we discussed the options if you are older and have not saved a dime yet. Basically, let's say you just turned 50 and you looked at your income statement and there is nothing but a $0 at the bottom of the page, you still have plenty of time to build a solid nest egg. For instance, you can start maxing out a Roth IRA contribution ($5K/year currently, but in addition to the "standard" contribution limits, taxpayers age 50 and over are eligible to make a Roth IRA catch-up contribution of an additional $1K/year). If you were to invest $5K per year for every year in your 50s, each $5K you invest would turn into more than $40K after 20 years. So you see, it's never too late to get started! Now if you have kids, you may want to give them a quick lesson on how well they can do if they get started younger putting money to work. If your child invests just $5000 by the time they turn 19 years of age, and did nothing else - but let's say buy dividend stocks and re-invest the dividends, they could end up with a $325K nest egg based on historical 11% returns for dividend-paying stocks. Plus, they get to take it out tax-free after they reach 59-1/2. All good stuff and this shows you that there is plenty of time for investors to get down to business.
As we look ahead to next week, earnings season will ease just a bit, but there will still be plenty of big names reporting numbers including H.J. Heinz ( HNZ ), Staples ( SPLS ), PetSmart ( PETM ) and more. Be sure to catch up with our latest watchlist updates this weekend on Dividend.com Premium, including reports on earnings/story stocks, analyst upgrades/downgrades, dividend ETFs, and more. And as always, you can view our current recommendations on our industry-leading Best Dividend Stocks List .
Thanks again for reading everybody!