The Zacks Analyst Blog Highlights:Barclays, UBS, Bank of America, JPMorgan
Chase and 3M Co.
CHICAGO, Feb. 7, 2013
CHICAGO, Feb. 7, 2013 /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 Barclays PLC (NYSE:BCS), UBS AG
(NYSE:UBS), Bank of America Corporation (NYSE:BAC), JPMorgan Chase & Co.
(NYSE:JPM) and 3M Company (NYSE:MMM).
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Here are highlights from Wednesday's Analyst Blog:
Barclays Raises Provisions
London-based Barclays PLC (NYSE:BCS) has kept aside an additional £1.0 billion
($1.6 billion) to meet the litigation expenditure pertaining to the dubious
sale of financial products. The banking giant is under tremendous pressure
from the British authorities over its scandalous activities.
Out of the amount, nearly £600 million is likely to be used for settling
claims related to the sale of payment protection insurance (PPI), taking the
total PPI provision to £2.6 billion. The remaining £400 million is set aside
for resolving claims linked to the sale of interest rate swaps, bringing the
total provision for swaps to £850 million.
Barclays has been flooded with compensation demands as most of the customers
allege that the financial products were sold to them forcefully. For instance,
PPI – an insurance product – were sold to customers as a means to keep paying
their loans, mortgages, and credit card obligations in case they took ill or
were unemployed. However, customers who bought it claim that the insurance was
inappropriate and useless.
The doubtful sale of the complex financial products is not the only scandal
faced by Barclays. In 2012, the company reached a $453 million settlement with
both British and U.S. regulatory bodies over the manipulation of the London
Interbank Offered Rate or LIBOR.
Similar to Barclays, another European bank namely UBS AG (NYSE:UBS) conceded
to paying a penalty of CHF 1.4 billion ($1.5 billion) to the U.S., U.K. and
Swiss authorities to resolve charges against the bank for its involvement in
LIBOR rigging. The regulatory authorities are also investigating Bank of
America Corporation (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM) among
others over their alleged involvement in the rate manipulation.
Barclays is striving hard to come out of the series of financial controversies
it had been involved in. The company is likely to announce restructuring
initiatives along with its fourth-quarter earnings on Feb 12. It is probable
that the company could retrench around 2,000 employees. Moreover, the CEO has
let go off his bonus for the past one year.
The Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) for the
company is 0.00%. This, coupled with its Zacks Rank #4 (Sell), indicates that
the company may miss the Zacks Consensus Estimate for the fourth quarter.
3M Hikes Dividend Payout
Diversified technology conglomerate 3M Company (NYSE:MMM) has recently
increased its dividend payout by 7.6% year over year to a quarterly payment of
63.5 cents per share or $2.54 on an annualized basis. The first quarter 2013
dividend is payable on Mar 12 to shareholders of record as of Feb 15.
The current dividend hike is the 55th consecutive annual dividend increase for
the company and the 99th uninterrupted yearly dividend payment. Based on the
closing price of $101.49 as of Feb 4, 2013, the proposed dividend affirms a
yield of 2.50%.
In addition, 3M also authorized a new share repurchase program, whereby it
could repurchase shares worth $7.5 billion over a period of time. At year-end
2012, the company had approximately 687 million shares outstanding.
3M has consistently returned significant cash to its shareholders. The company
had reportedly returned $32 billion to its shareholders in the last 10 years
through a combination of dividends and share repurchase transactions,
accounting for about 89% of the reported net income.
The recent dividend hike follows strong quarterly and annual results that
helped the company to reiterate its earlier guidance for full year 2013 with
an organic local-currency sales growth of 2%-5%. 3M delivered record fourth
quarter 2012 sales with an improved performance by almost all the segments,
except Safety, Security and Protection Services segment. For full year 2012,
3M also reported record total sales of $29.9 billion compared to $29.6 billion
The company also has a healthy liquidity position. Cash and cash equivalents
at year-end 2012 were relatively strong at $2.9 billion, while free cash flow
for the three-month period was stable at $1.2 billion.
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