Citi's Problems: Look Here If You Need Any More Proof
Last Friday, Citi put out an "Equity Strategy" report which highlighted 70 companies with "A Long History of Dividend Payment/Growth."
These 70 stocks met the following criteria:
--stocks which, in addition to paying an above market yield, also have a long history of dividend payment and growth.
--stocks that have achieved an annualized dividend growth rate of 5% or better over a 15-year trailing period.
--stocks must be rated Buy (1) or Hold (2) by Citi Investment Research, and must have a market capitalization greater than $2 billion, and a closing price greater than or equal to $5 as of the prior trading day.
--the current dividend payout is no greater than 60 percent of the current year's EPS estimate, in order to avoid stocks that have potentially unsustainable dividend levels.
--"This list should be used as a starting point only. Please review current fundamental research on those stocks that appear to be of interest."
Number 10 on that list: Countrywide . Which hasn't raised its dividend in three years. Today, three days later, Citi cuts Countrywide from a "buy" to a "hold." Hold! But, hey, based on the criteria above, it still qualifies to be on the list.
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