J&J Declares a Dividend, and Nike Feels the Competition
Oct 17th 2013 1:25PM
Updated Oct 17th 2013 1:28PM
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Now that Washington has finally reached a budget agreement, federal employees are working again and the debt ceiling has been avoided. Stocks in general are moving higher today, despite what you may think when looking only at the Dow Jones Industrial Average . The Dow is down 36 points, or 0.23%, as of 1:10 p.m. EDT, while the S&P 500 is up 0.45% and the Nasdaq has gained 0.43%.
The only reason the Dow is lower is because of its price weighting and the fact that two of its heaviest components, Goldman Sachs and International Business Machines are down big-time today. Let's take a look at some of the other components and see why they're moving.
One day after Nike announced that its second-generation FuelBand will hit store shelves on Nov. 6, shares are trading flat due to increased competition in the wearable-technology world. This morning Adidas announced its new smartwatch. The device is geared toward runners, as it will have a GPS, measure speed and distance, and incorporate a heart-rate monitor. While Nike's new FuelBand will cost $149, Adidas' product will go for $399, but it has more functions. The wearable-technology space is really heating up, but being priced at the low end of the market and having the Nike brand behind it should continue to make the FuelBand a success for the company, regardless of what the competition throws at it.
Shares of Johnson & Johnson are up 0.6% today. The only real news pertaining to the company is that its board of directors approved the current $0.66 per-share dividend for the fourth quarter. This should be no surprise to investors, as the company historically maintains its dividend for four quarters before making any increase, and the current $0.66 per share has only been paid out twice. At today's share price and the full-year dividend amount of $2.64 per share, the dividend yield sits at 2.9%, which gives Johnson & Johnson the 15th-highest Dow dividend yield. Today's news is certainly no reason to buy the stock, but it's another example of why the company is considered one of the most reliable and consistent Dow components.
Outside the Dow, shares of Stanley Black & Decker are having another bad day. After falling as much as 16% yesterday, shares are down another 2.7% after the company reported third-quarter earnings and lowered guidance for the full year. Previous full-year earnings guidance had been $5.40 to $5.65, but that was lowered to $4.90 to $5 per share. As the company realizes about half its revenue from the consumer and construction segment, some may question why Home Depot or even Lowe's hasn't yet experienced the same problem. It's possible they have, and that we will find out when Home Depot reports earnings on Nov. 19 or when Lowes provides quarterly results on Nov. 20. As for Stanley Black & Decker, investors may want to stick it out for another quarter or two to see if management can turn things around. Remember that now may be the worst time to sell, despite what your head is telling you.
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The article J&J Declares a Dividend, and Nike Feels the Competition originally appeared on Fool.com.Fool contributor Matt Thalman owns shares of Johnson & Johnson. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. The Motley Fool recommends Goldman Sachs, Home Depot, Johnson & Johnson, and Nike. The Motley Fool owns shares of International Business Machines, Johnson & Johnson, and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.