Why Pitney Bowes Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of mail and shipping specialist Pitney Bowes (NYSE: PBI  ) were looking stronger today, gaining as much as 15% after announcing earnings and saying it would sell its management service unit to Apollo Global Management for $400 million.

So what: The sale, which is expected to close in the fourth quarter, is for the division that works with corporate and government clients to boost efficiency, and the company argued it would allow it to focus on its core mail and e-commerce offerings.  As for the earnings report, profits from continuing operations reached $0.52 a share, topping expectations of $0.43, while revenue came in at $1.19 billion, in line with estimates. Considering the sale of the management unit, the company lowered its full-year guidance from continuing operations to $1.62-$1.77 from $1.85-$2.00 before.

Now what: I wouldn't expect any fireworks out of Pitney Bowes, as revenues were already projected to decline, but for investors looking for a solid dividend/value play, this looks like a good bet. The sale, which accounts for more than 10% of its market cap, will give it a further cushion to fund its near 5% dividend yield, and the company is still valued at a P/E below 10 after today's jump and guidance adjustment. It's hard to argue with numbers like that.

If you're looking for more ideas on dividend stocks, check out this list of nine rock-solid dividend plays. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.



Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2567764, ~/Articles/ArticleHandler.aspx, 10/22/2014 7:58:42 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement