Dow Rises; 1 Stock Paying a 25% Dividend Soared 7% Today

McDonald's advances on fundraising plans, E-Commerce China Dangdang rallies despite little news, and DryShips surges after a big announcement

Jun 4, 2014 at 6:51PM

Stocks returned to their winning ways on Wednesday, though the day's gains were anything but emphatic. Volume was light as investors bide their time for the most-anticipated economic data of the week, Friday's nonfarm-payroll employment report. Analysts are looking for the economy to add 213,000 jobs in May, down from April's 288,000 advance. As Wall Street waits until Friday to bet big, shares of McDonald's (NYSE:MCD) made their own move, finishing as the second-best performer in the Dow Jones Industrial Average (DJINDICES:^DJI) on Wednesday. The Dow tacked on 15 points, or 0.1%, to end at 16,737.

McDonald's added 1% today, as finance geeks around the globe applauded the company's capital allocation strategy. Most investors get excited when a particular product sells more units than it was supposed to, their favorite company signs a lucrative contract, or traditional cost-cutting moves filter more money to the bottom line. Finance geeks, on the other hand, go nuts when companies do things like what McDonald's is doing, according to a recent Bloomberg report. Mickey D's plans on raising over $1.5 billion in three different currencies (pounds, euros, and dollars) to take advantage of globally low interest rates to finance a $20 billion buyback program.

Dryships Homepage

Source: DryShips website.

Greek drybulk shipping company DryShips (NASDAQ:DRYS), which pays a whopping 25% annual dividend, saw its stock rally 6.9% on Wednesday, as its majority-owned subsidiary Ocean Rig announced a contract worth potentially $165 million over 260 days. Ocean Rig conducts deepwater drilling, and its rig the Erik Raude will spend roughly 260 days trying to extract black gold somewhere offshore the Falkland Islands. DryShips stock also got a little help from the Baltic Dry Index, an index used to approximate shipping rates for cargo along a number of commonly used trade routes. The Baltic Dry Index was up 1.5% at last check.

Lastly, shares of E-Commerce China Dangdang (NYSE:DANG) ended as another big gainer on Wednesday, jumping 5.7%. Large intraday swings like this typically mean that investors have just caught wind of some great news (see: DryShips), but Dangdang is anything but a typical stock. The stock's beta, which is a measurement of volatility, is 4.9, meaning that Dangdang shares are theoretically about five times more volatile than the larger market. On top of that, Dangdang's trading volume was about 60% lighter than normal today, making the 5.7% move even less meaningful. Taking a look at the business itself, Dangdang has, up to this point, failed to distinguish itself from its competitors as a force to be reckoned with, so I'd think twice before betting that it'll outperform.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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