Market Wrap-Up for July 22 (CAT, MSFT, HON, VZ, GE, MCD, more)
The indices finished mostly mixed as the most recent big-name earnings results failed to inspire the broad market. The bombing in Norway earlier today may have also kept some investors on the sidelines.
Caterpillar ( CAT ) was a big disappointment, finishing down over $6 as the company missed analysts' earnings targets. Honeywell ( HON ) and Verizon ( VZ ) were also lower despite what appeared to be decent numbers. C.R. Bard ( BCR ), a recent high-beta winner closing down $13 on its earnings report. The company pays a fairly low dividend, so not as much support when earnings aren't a blow-out. Microsoft ( MSFT ) reported good results and the stock managed to tack on some late gains to end in the green. Investors continue to be frustrated by management's failure to put some of the immense cash hoard back in investor's pockets. The company last paid a special one-time dividend back in 2004 and some analysts are wondering if a similar event could take place again soon. We would be happy if there were frequent dividend boosts, but that hasn't been the case and therefore the stock remains a name we aren't recommending at this time. Shares of General Electric ( GE ) finished slightly lower after opening higher on the earnings beat. Big earnings winners today included McDonald's ( MCD ) and Schlumberger ( SLB ). McDonald's should be providing investors with a fresh dividend hike sometime in the next quarter we imagine.
As we get through some of the latest earnings, there are some names that are popping up on our list to be our next additions to our "Best Dividend Stocks" List . We will be sure to keep Premium subscribers alerted to any changes we make as soon as they happen. Same thing if we feel we need to move to the sidelines on any particular names that could be in for some lag time.
Life is all about risk and reward, from your investments to your career and even your personal life. I was reading a recent article in the New York Times about the surplus of lawyers around the country. New York in particular has the greatest glut of lawyers, with 9,787 people having passed the bar exam in the recent 2009 data. Unfortunately the reality from analysts is that New York will need only 2,100 new lawyers each year through 2015. Thus, the glut of lawyers will become even larger. This problem is country-wide and is something many aspiring lawyers will probably never find out about until it's time to find a job after graduating from law school.
Even outside the law arena, the job market is as competitive as many can remember throughout history. If you are not 100% focused, you will end up with a large school loan and little to show for it if you are not all-in on your choice. I had a family friend whose son was attending Boston University and majoring in engineering. Before his second even ended, he dropped out and moved back home with his parents. He is now attending a local community college in New York and has changed his major to accounting. Unfortunately he was unable to get past the good times of fraternity life and was not zeroed in on accomplishing his real mission. To his credit, he admitted the other students were hungrier and dedicated to getting their degree. The world is a tough place for those who are not ready to give their all. You see it all day long in the life of an entrepreneur. Good ideas are a dime a dozen, but solid execution is much harder to come by.
For investors, the idea of building wealth is shared by many. I talk about investing in quality dividend-paying stocks as a great way to build up your future income, but if you are spending like there's no tomorrow, you risk negating all the good you might be doing on the investment side. Saving is a mantra that needs to also be adopted if the work you're doing for the long-term is ever going to make a real difference down the line.
The current economic situation continues to be one filled with dangerous turns, and we will do our best to maneuver through it. Trying to time the markets is a difficult proposition, but if you don't feel comfortable putting your money to work during uncertain times, you've got to make best call that works for you. If you'd like to watch from the sidelines for a few months and sit out the action, so be it. Investing is a marathon and each individual investor needs a moment to catch their breath. The key thing is to avoid making the "timing" aspect a regular part of your investing methodology. The danger with trying to time the market is that you need to be right twice (when you buy and sell). Plus, it can be a nasty habit to fall into. You'll essentially morph into a trader, rather than an investor, and stray from the best course of generating income and compounding returns from dividend-paying stocks.
Quick note - We added a great new highly-anticipated feature to our Dividend.com Premium service recently!
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* Get alerted when your Watchlist stocks are set to go ex-dividend the next day
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Looking ahead to next week, quarterly earnings will continue to trickle in as we get set to see how well corporate America did in the second quarter. Watch for earnings results from the likes of 3M ( MMM ), Boeing ( BA ), Colgate-Palmolive ( CL ), and Exxon Mobil ( XOM ), just to name a few.
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 much more. And as always, you can view our current recommendations on our industry-leading "Best Dividend Stocks" List . And if you haven't already, be sure to check out the "What's New on Dividend.com Premium" post we published recently to get up to speed on all the great new enhancements we've made to our service.
Thanks for your support everybody and thanks for reading my newsletter too! Please pass this on to anyone you think we can get inspired and educated about building wealth and using common sense to do so.