Touchstone Friday
Plus, preparing for the next week
by Jeff Fischer ([email protected])
Alexandria, VA (August 7, 1998) --It's been a Mellon of a week. Now the Drip Port is ripe with information on Mellon.
(See, the possibilities here are endless if we end up buying this company. Agreed?)
Dale has chosen Norwest (NYES: NOB) and Mellon Bank (NYSE: MEL) as his two favorite financial stocks for the Drip Port and, following the discussion of Norwest last week, this week Mellon was the focus.
On Monday, Dale covered questions regarding Mellon that had been asked by readers. On Tuesday, I reviewed the brief history of the Drip Port's buys from the beginning -- how they were decided upon and so forth, because that's how this buy will be decided as well. Following that, Wednesday's column was about Mellon's DRIP. Despite questions asked on that day, there are essentially no fees or limitations to the plan, so the Drip Port is fine with it. At the end of this column we'll provide more information on Mellon's DRIP, thanks to a Fool named Dennis who sent it from the prospectus. Finally, Thursday was my overview of Mellon, complementing Dale's information and offering more history and reasons why this diversified leader is atop our list.
To prepare you for next week and the near future, please know that I'm next going to review Dale's top five picks for comparison. For readers following along at home, you might want to call the companies for investor and DRIP information if you haven't done so already. Although, realize that all of these companies have websites, too, so most information is already available to you with a click of the mouse. Below is a list of Dale's favorites that we'll continue to review to reach a final decision:
1. Mellon Bank (NYSE: MEL)
Phone: (412) 234-5000
http://www.mellon.com
2. Norwest Corp. (NYSE: NOB)
Phone: (605) 352-8411
http://www.norwest.com
3. Fifth/Third Bancorp. (Nasdaq: FITB)
Phone: (513) 579-5300
http://www.fifththird.com
4. First Tennessee (Nasdaq: FTEN)
Phone: (901) 523-4945
http:/www.ftb.com
5. US Bancorp (NYSE: USB)
Phone: (612) 973-1111
http://www.usbank.com
You, being Foolish, can call for company and DRIP information or (more efficiently) research it on the Web. This will serve to complement Dale's recent work that stands in the Drip archives. I'll be reviewing each company to complement Dale, too, as we take the Drip toward an agreed upon buy.
Drip Port's Current Stocks. Something might be going on with the stock of Campbell Soup (NYSE: CPB). After rising early in the week to touch $56, only $4 off the high, Campbell has since fallen sharply. It's a type of decline that appears to be happening on rumor, if anything. There is no news. The company will announce quarterly results next month. Perhaps the extremely hot summer has slowed soup sales more than usual, and perhaps a rumor about the quarterly numbers is circulating, and perhaps that has caused the downdraft. I don't know -- I'm just speculating. The fall could also represent the recent weakness in the food and beverage industry. Coca-Cola declined, too, and cereal companies have been hit for a few reasons.
Whatever the reason, we might be doing something with Campbell Soup ourselves. As we discussed three weeks ago, the company's new dividend reinvestment plan should be implemented at the end of next month. It apparently has high enough fees that we'll need to reconsider continuing with the plan. If we do decide to leave Campbell Soup, we'll review our food company list and decide which new company (or companies?) to roll the money into. It's unfortunate that it might come to this, but we don't want to pay significant fees every time that we invest a small amount of money on a regular basis. Before we change anything, though, we'll first address the issue with Campbell Soup. More on that later.
Elsewhere in the Drip Port, I look forward to offering an updated closer look at Intel (Nasdaq: INTC) and Johnson & Johnson (NYSE: JNJ) in the coming weeks. If you have any thoughts to share on JNJ especially, please visit the rather quiet JNJ message board. We bought $40 more of Johnson & Johnson today, August 7, at around $75, I presume.
Mellon's DRIP Info. The Drip Port isn't set on buying Mellon yet, of course, but for readers, the way to get into the Mellon dividend reinvestment plan with no fees is as follows (thanks again to Fool Dennis for this info):
Existing Mellon shareholders can participate by submitting a completed enrollment form. If your shares are held in a brokerage account, you may participate directly by transferring registration of some or all of your shares into your name and submitting an enrollment form. No fee payment is required if you are already a Mellon shareholder.
The method to get in that requires fees is as follows:
New shareholders can join the plan by making an initial investment of at least $500, including an enrollment fee of $6.00 and a trading fee of $0.12 per share if the shares are purchased for you in the open market. You can pay by check or have your payment automatically withdrawn from your bank in 10 monthly installments of $100 (a minimum of $1000).
Therefore, if you go out and buy a share on your own you can avoid the $6.00 enrollment fee and having to dish out $500 right up front. There are no fees and no minimums to enroll if you own a share already. (We're checking with Temper of the Times to see if they offer Mellon enrollment services.) Here is the phone number that you need to call to get a prospectus:
Mellon Dividend Reinvestment Plan 1-800-205-7699
Enrollment/Prospectus for Dividend Reinvestment
Have a Foolish weekend! Enjoy.
--Jeff Fischer
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