1 Dividend to Buy, 1 Dividend to Sell
The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino and health-care editor/analyst David Williamson discuss topics across the investing world.
As part of our ongoing series, Isaac and David discuss one promising dividend and one dismal dividend stock. David looks at Eli Lilly, a pharmaceutical company that needs to replenish its pipeline to compete in this industry. Despite its size, the company does not have the diverse array of drugs one would expect. Furthermore, David points out that an upcoming Alzheimer's treatment could help the company, but the odds of a successful launch seem minimal. Don't be tempted by the large dividend alone; this might be a company to stay away from for a while.
In the transportation industry, Isaac finds CSX, the major East Coast railroad, particularly attractive. The broad story line often focuses on a decline in coal demand, since the industry has witnessed a decline of 200,000 coal carloads to date in 2012. As they say, however, it's hard to stop a freight train. According to its recent quarterly filing, CSX's overall volume shipments actually increased 1%, despite a decline of 14% in coal traffic. Strong demand for automotives, up 18%, and metals, up 8%, offset the decline in coal, and this trend should continue as the economy picks up steam. Also look for an uptick in intermodal volumes, where CSX aims to expand service offerings and adds tremendous value in offsetting high fuel prices.
If you're interested in some of these dividends on your quest for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top, dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.
At the time this article was published David Williamson has no positions in the stocks mentioned above. Isaac Pino owns shares of CSX. The Motley Fool has no positions in the stocks mentioned above.Motley Fool newsletter services recommendCanadian National Railway. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.