The upgrades continue to outpace the downgrades so far in November for stocks that pay dividends. We went through all the analyst rating changes for the last few days to identify upgrades and downgrades for stocks with a dividend yield of 2% or more. We have provided the reason for the new rating from the investment firm and the price target when it was made available. We have also provided our DSO rating which is based on yield, dividend growth, cash flow, payout ratio, income growth and recent stock performance.
3 Dividend Stocks Analysts Like
ADTRAN was upgraded by Mizuho from Underperform to Buy on November 8th with a price target of $22 per share. Mizuho said the upgrade was based on Valuation, reset expectations, and revenue catalysts. ADTN has a dividend yield of 2% and has not increased its annual dividend of $.36 per share since May of 2005. It has a payout ratio of 31% so it looks like it’s time to increase the dividend.
Consolidated Edison (ED)
Consolidated Edison was upgraded by RBC Capital Markets on November 8th from Underperform to Sector Perform with a price target of $60 per share. RBC cited the recent pullback in shares and the company’s defensive characteristics. ED has great dividend fundamentals with a yield of 4.3% and 37 consecutive years of dividend increases. Unfortunately its 5 year dividend growth rate is not even 1%, which has to be disappointing for long time stock holders. The stock has a payout ratio of 64%.
Exelon Corp (EXC)
Exelon Corp was upgrade by UBS from a Sell to a Neutral on November 8th with a price target of $30 per share. UBS cited valuation as the reason for the upgrade. EXC has a dividend yield of 6.8% but has not increased its dividend for the last few years. It has a payout ratio over 100% so beware of its strength in the future.
2 Dividend Stocks Analysts Have Stopped Buying
Spreadtrum Communications (SPRD)
Spreadtrum Communications was downgraded by Canaccord Genuity on November 9th from a Buy to a Hold with a price target of $20 a share. Canaccord cited flat gross margin and poor sales growth guidance from Spreadtrum as the reason for the downgrade. SPRD has a dividend yield of 2% and just started paying dividends in 2011.
Time Warner Cable (TWC)
Time Waner was downgraded by Stifel Nicolaus on November 9th from a Buy to a Hold. Stifel Nicolaus did not provide a new price target but did say the downgrade was based on valuation and lower than expected sales growth in 2013. TWC has a dividend yield of 2.3% and has increased its dividend each year since it started paying dividends in 2010.