Blue chip stocks, often the kind of issues that dividend investors gravitate toward, aren't expected to set a blazing earnings pace in 2009.
Analysts expect 15 Dow stocks to increase earnings in 2009 vs. 2008, and the other 15 stocks' earnings to decline.
Worse yet, recent EPS revisions have been trending down for 2009.
Wal-Mart Stores WMT has been the star of the Dow in 2008.
An investor who bought shares at the end of 2007 is sitting on a 17% gain. Only 3% of stocks in IBD's database gained that much year to date.
The dividend yield is 1.7%. The payout ratio is 28% of estimated fiscal 2009 earnings.
Wal-Mart has increased the dividend 34 straight years.
Earnings increased 12%, 19% and 12% in the past three quarters while sales grew 10%, 10% and 7%. Analysts expect earnings to grow 10% in fiscal year 2009 ending in September.
On Tuesday, Wal-Mart announced it had agreed to settle 63 class-action wage lawsuits. Wal-Mart is expected to take a charge of 6 cents a share in the fourth quarter to cover the settlement.
While growth in the U.S. market may be hard to come by for Wal-Mart, the company is moving internationally. Wal-Mart recently announced a bid to buy Chile's largest supermarket chain, D&S.
McDonald's MCD is the only other stock in the Dow with a gain this year. It's up about 4%.
The dividend yield is 3.3%.
Annual earnings growth is expected to come in at 25% in 2008. That would be McDonald's best growth since 2004.
For 2009, analysts see EPS growth slowing to 6%. That would be McDonald's weakest growth since 2002
