For Immediate Release
Chicago, IL – February 23, 2012 – Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include Johnson &
Johnson ( JNJ),
Pfizer ( PFE), Merck (
MRK), Public Service Enterprise Group ( PEG)
and Consolidated Edison Inc. ( ED).
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Here are highlights from Wednesday’s Analyst
Blog:
J&J CEO Stepping Down
Johnson & Johnson ( JNJ) recently
announced that Bill Weldon, its Chief Executive Officer (CEO), will
be stepping down from his post. Mr. Weldon, however, will continue
to serve as Chairman of the Board of Directors.
Weldon, CEO at Johnson & Johnson since 2002, will be
replaced by Alex Gorsky, who currently holds the post of the Vice
Chairman of the Company's Executive Committee. Gorsky is also
responsible for the Medical Devices & Diagnostics Group, Global
Supply Chain, Health Care Compliance & Privacy and Government
Affairs & Policy.
The new CEO will take charge on April 26, 2012, the date of the
company's annual shareholder meeting.
Besides Gorsky, another contender for the post of the CEO was
Sheri S. McCoy. Sheri S. McCoy will continue in her role as Vice
Chairman of the Executive Committee. She will continue to lead the
Pharmaceuticals and Consumer Groups, and maintain responsibility
for Information Technology.
Change Expected
The announcement did not come as a huge surprise. During a part
of Weldon’s tenure, Johnson & Johnson has been beleaguered by
frequent product recalls, which affected the performance of its
consumer segment. The company has been facing these issues since
2009. While US Consumer segment sales declined 6.7% in 2011 to $5.2
billion with US OTC/nutritional sales declining 22.9%, 2010
revenues were impacted by about $900 million due to the
product-recall related issues. In addition to losing revenues,
consumer trust in the company was also affected.
The company has been working on resolving the situation.
However, just when it looked like the product recall situation was
somewhat under control, Johnson & Johnson announced yet another
recall (seven lots of Infants’ Tylenol Oral Suspension, 1 oz. Grape
distributed in the US) a few days back.
Neutral on Johnson & Johnson
We currently have a Neutral recommendation on Johnson &
Johnson, which carries a Zacks #3 Rank (short-term Hold rating). In
our view, the new CEO will have his or her hands full dealing with
the product recall issues and regaining consumer confidence.
Other companies that announced a change at the helm in the
recent past include Pfizer ( PFE)
and Merck ( MRK).
PEG Steady Biz Boosts Dividend
Public Service Enterprise Group ( PEG) has
increased its dividend by 3.6%, bringing the annualized dividend to
$1.42 per share from the previous payout of $1.37 per share. The
company’s strong balance sheet and cash flow generating abilities
ensure a steady rise to the dividend.
The company will now pay a quarterly dividend of 35.5 cents per
share compared with the prior quarterly dividend of 34.25 cents per
share. The dividend will be paid on March 31, 2012, to shareholders
of record at the close of business on March 9, 2012.
The company has been regularly paying dividends since 1907. The
last quarterly dividend increase came in February 2010 with a 3%
hike from 33.25 cents to 34.25 cents.
With the current dividend increase, the company revised its
payout policy. It had earlier committed to pay 40% to 50% of its
earnings as dividends. Now it plans to reward shareholders with a
greater percentage of its income.
The company stated that contribution from its stable regulated
business is steadily increasing, a trend that is expected to
continue. Besides, progress on operational, capital investment and
financial goals in 2011 would yield generous free cash flow,
supporting future dividend growth.
The company’s robust portfolio of regulated and non-regulated
utility assets offers a steady earnings base and significant
long-term growth prospects. Moreover, we believe that going forward
the company’s growth will be driven by a low-cost nuclear fleet,
assumed rate relief and added generating capacities.
However, the increasing cost of coal, higher pension and
financial costs, and power-price volatility are areas of concern.
The company presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the
stock.
Public Service Enterprise Group is expected to release its
earnings tomorrow. The Zacks Consensus Estimates for fourth
quarter and fiscal year 2011 are currently at 46 cents per share
and $2.73 per share, respectively.
Recently its competitor, Consolidated Edison
Inc. ( ED) reported fourth quarter and fiscal 2011
results. In the reported quarter, earnings from continuing
operations came in at 74 cents, beating the Zacks Consensus
Estimate of 71 cents. Results also compared favorably with earnings
from continuing operations of 69 cents in the year-ago quarter.
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CONSOL EDISON (ED): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
MERCK & CO INC (MRK): Free Stock Analysis Report
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
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