2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.
Today, I'll look at Pitney Bowes (PBI +0.29%). Among dividend investors, Pitney Bowes is a favorite, thanks to its S&P 500-leading dividend yield. Yet that high yield comes largely from a big decline in the company's share price. Can the company that once revolutionized the way businesses send mail pull another trick out of its hat? Below, you'll find more on what moved shares of Pitney Bowes this year.
Stats on Pitney Bowes
|
Year-to-date stock return |
(35.3%) |
|
Market cap |
$2.17 billion |
|
Revenue, past 12 months |
$5.06 billion |
|
Net Income, past 12 months |
$611 million |
|
1-year revenue growth |
(5.8%) |
|
1-year net income growth |
40% |
|
Dividend yield |
13.7% |
|
CAPS rating (out of 5) |
*** |
Source: S&P Capital IQ.
What crushed Pitney Bowes this year?
Pitney Bowes dominated its industry for decades, with its postage-meter mailing machines an omnipresent staple of corporate mailrooms. But lately, the company has suffered from a reduction in mail volume, and its annual earnings have shrunk this year and are expected to drop again next year.
One obvious place to look for an explanation is the rise of online postage services. Stamps.com (STMP +0.00%) and Newell Rubbermaid's (NWL 5.08%) Endicia.com have cut deeply into Pitney's home turf. Partnerships with FedEx and United Parcel Service (UPS 0.51%) haven't managed to restore Pitney's sales to previous levels.
But Pitney has tried to evolve past its postage business to become a more diversified company. A recent deal with Facebook (FB 2.11%) aims to make use of Pitney's geocoding software prowess, helping to make Facebook's ad targeting more effective. Its document solutions and e-commerce services, along with analytics, marketing, and data management businesses, represent Pitney's attempt to become a one-stop shop for business customers.
In 2012 at least, Pitney's moves haven't inspired confidence among investors. Whether the company will see a better 2013 depends on how effective it is against the strong competition in the other areas it's pursuing.
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