Visa Boosts Dividend but Is Still the Dow's Lowest Yielder

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.

This morning the jobless-claims numbers for the week ending Oct. 19 were released, and they failed to impress. Economists were looking for 340,000 initial claims being reported for the week, but the actual number came in at 350,000, which was only a 12,000-claim drop from the prior week. Some believe the claims are not as bad as the data suggest, as California is still dealing with backlogged claims from a computer problem it had back in September. But regardless, it would seem the government shutdown has affected the jobs market, because for the week prior to the closing, the jobless-claims figure was 308,000, and every week in September claims came in at the low 300,000s or even high 200,000s.

But despite the higher-than-expected jobless-claims number, the markets as a whole are performing well today. As of 12:320 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 91 points, or 0.59%, while the S&P 500 is up 0.28% and the Nasdaq has gained 0.5%. The major indexes are all higher today as a result of some strong earnings reports this morning.

But not all stocks are moving higher simply because of strong earnings. Shares of Visa (NYSE: V  ) are up 2% after the company announced that the board of directors had increased the company's quarterly dividend amount. The previous payment of $0.33 per share was increased to $0.40. That represents a 21% increase to the dividend, and now the full-year 2014 payment amount will be $1.60 per share, as opposed to the previous $1.32 shareholders received in 2013. At today's shares price of just more than $200, the new dividend yield will be around 0.8%. When compared to other Dow components, that still leaves Visa with the lowest dividend yield of any Dow component, but the fact that the company is increasing the quarterly payment is a good sign. 

Outside the Dow, shares of Green Mountain Coffee Roasters (UNKNOWN: GMCR.DL  ) are down 1.3% this afternoon after analysts at Argus downgraded the stock from a buy to hold based on increased competition within the K-cup market and single-serve coffee packets. Furthermore, the firm lowered its full-year earnings per share estimates from $3.28 to $3.22 for 2013 and from $3.70 to $3.66 for 2014. As for investors, they should not be too concerned with this report, as it is the opinion of one firm, and even the changes to EPS estimates were minimal, indicating that even it Green Mountain does experience higher competition, it will not likely hurt that much over the next few years.  

Lastly, shares of Sirius XM (NASDAQ: SIRI  ) are down 2% after the company announced that it would be raising prices by $0.50 per month starting in January 2014. This will be the second time the company has raised its prices, with the last time being in 2011. Management expects 2014 will bring weaker revenue and earnings. CEO Jim Meyer told investors that the increase will not cause customers to cancel their subscriptions, as they see significant value in the product. Shareholders should watch this play out; right now, running for the hills seems a little premature.  

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Related Tickers

9/28/2016 5:27 PM
^DJI $18339.24 Up +110.94 +0.61%
GMCR.DL $0.00 Down +0.00 +0.00%
Keurig Green Mount… CAPS Rating: **
SIRI $4.17 Up +0.01 +0.12%
Sirius XM Radio CAPS Rating: **
V $82.97 Up +0.81 +0.99%
Visa CAPS Rating: *****