Welcome!

Oracle Authors: Michael Bushong, Avi Rosenthal

News Feed Item

The Zacks Analyst Blog Highlights: Costco Wholesale, Dillard, Walt Disney, Wal-Mart Stores and Oracle

CHICAGO, Dec. 11, 2012 /PRNewswire/ -- 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 Costco Wholesale Corporation (Nasdaq:COST), Dillard Inc. (NYSE:DDS), Walt Disney Co. (NYSE:DIS), Wal-Mart Stores Inc. (NYSE:WMT) and Oracle Corporation (Nasdaq:ORCL).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday's Analyst Blog:

Rush for Dividends or Miss the Bus

The impact of the "Fiscal Cliff" or $600 billion in spending cuts and increase in tax rate on dividend income and capital gains will take its effect from the beginning of 2013 if concrete measures are not taken to avert it. However, Republicans and Democrats still continue to wrangle about ways to find a solution.

Consequently, several companies are contemplating dividend hikes, special dividend and early payouts in light of a probable rise in dividend tax rate from the beginning of next year. These measures are taken to relieve shareholders from the burden of higher taxes. After all, an ounce of prevention is worth a pound of cure.

The tax rate could go up to 43.4% (39.6% top ordinary tax rate + 3.8% Obama's Medicare surcharge tax on investment income) from the current 15%.

The "Jobs and Growth Tax Relief Reconciliation Act of 2003" is set to expire and renewal of the Bush-regime lower tax rate seems a remote possibility as of now. Thus, companies need to decide if they are ready to dole out dividends now or be prepared to face the brunt of a likely hike in dividend tax rate.

However, the companies have already taken certain shareholder-friendly moves sensing the uncertainty revolving around the economy.

Costco Wholesale Corporation (Nasdaq:COST) declared a special dividend of $7.00 per share, amounting to approximately $3 billion to be financed from the proceeds of the $3.5 billion debt-offering. Dillard's Inc. (NYSE:DDS) declared a special dividend payout of $5 per share, and Walt Disney Co. (NYSE:DIS) hiked its annual dividend by 25%. Wal-Mart Stores Inc. (NYSE:WMT) will pay its regular dividend on Dec 27, ahead of its scheduled date of Jan 2, 2013.

Among others,Oracle Corporation (Nasdaq:ORCL) will pay dividends for the last three quarters of fiscal 2013 together in advance, aggregating 18 cents a share, on Dec 21.

Conclusion

We believe that if higher dividend tax rates take shape, it will compel investors, who have lately gone overweight on dividend-paying stocks, to reshuffle their portfolios and sell those stocks to avoid paying inflated tax in 2013. Moreover, it is very likely that consumer confidence would also be dented, which the retailers definitely don't want at the present juncture.   

The decision makers should reach a consensus that should not only benefit the economy but investors too. Keeping our fingers crossed...

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.