Why Diebold Might Be Poised to Keep Dropping

Why Diebold Might Be Poised to Keep Dropping

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Diebold slipped 2% today after Compass Point downgraded the self-service delivery and security systems specialist from neutral to sell.

So what: Along with the downgrade, analyst Douglas Greiner lowered his price target to $23 (from $25), representing about 25% worth of downside to yesterday's close. While value investors might be attracted to the stock's recent pullback, Greiner believes that several significant headwinds will continue to work against Diebold over the next few quarters.

Now what: Compass expects Diebold to post EPS of $1.30 in 2013, down substantially from prior-year levels above $2.00. "One of the main problems has been lost market share in the regional business where the profitability is approximately twice as attractive as national business," noted Compass. "We expect this trend to somewhat mean revert but not fully recover. ... We expect the core business to continue to face pressure in terms of both top line growth and gross margin." With the stock flirting with its 52-week lows and currently boasting a near-4% dividend yield, however, those short-term concerns might be providing patient Fools with a juicy long-term income opportunity.

More dynamic dividend plays
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

The article Why Diebold Might Be Poised to Keep Dropping originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published