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Two Ways: Dividends and Buybacks Take a Backseat


Strengthen your portfolio in good times and bad.

Dividends, Buybacks, the Good Ol' Days

Stocks are back in fashion now, but gone are the days of big dividends and stock buybacks. In a story by the Wall Street Journal, these two bull-market staples aren't likely to return for quite some time.

Companies are still clinging to their cash reserves still in fear from the aftershocks of the global financial crisis. In data provided by Standard & Poors, just 233 companies increased their dividend payments during the second quarter, down from 455 the year before, a new low since S&P began keeping records in 1956.

For more on the markets, see Professor Vinny Catalano's Economy Is Out of the Woods, But Into a Swamp.

From the Bull Pen: For dividend plays, consider oil company BP (BP) with a 6% dividend yield. And if the dollar continues its downtrend, bulls will be very happy with its diverse revenue stream. For the more passive investor, one can start an initial position here at $55, and add toward gapfill at $53. A sell stop can be set below $52.

From the Bear Cave: Not all dividend plays are equal. Consider a downside play in Consolidated Edison (ED) with its heavy US exposure. Those playing the downside can set a buy stop above recent highs near $40.50.

Quick Check Around the World

Asian trading closed with the Nikkei -0.66%, India 0.29%, Hang Seng 0.44%, Shanghai 2.22%, and Taiwan 0.07%.

Across the pond, we see the FTSE 0.72%, CAC 0.83%, DAX 0.56%

As of 8:10 a.m. EST, S&P Futures are trading +1.25 to 1039.00 and Nasdaq futures are +3.750 to 1686.50.

A Look at Commodities

Over in commodities, crude oil is -0.24 to 71.70 while gold is +5.80 to 1003 this morning. Silver is +0.18 to 16.85 and copper -0.250 to 285.70.

The dollar index is -0.2050 to 76.8800.

On the Radar


08:30 Export Price ex-ag
08:30 Import Price ex-oil
09:55 Michigan Sentiment- Prel 67.3 cons.
10:00 Wholesale Inventories -1.0% cons.
02:00 Treasury Budget -174.0b cons.

Happy Friday! Good luck and have a great weekend!

With the price of oil reaching record highs, understanding world oil supply has never been more important. Hoofy and Boo present a clear look at this often opaque subject.

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No positions in stocks mentioned.

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