Textron Inc. is a $10 billion multi-industry company with more
than 43,000 employees in nearly 40 countries. The company
leverages its global network of aircraft, industrial and finance
businesses to provide customers with innovative solutions and
services. Textron is known around the world for its powerful
brands such as Bell Helicopter, Cessna Aircraft, Kautex,
Lycoming, E-Z-GO and Greenlee, among others. More information is
available at www.textron.com.
[Source: Company Press Release]
Reasons to Invest:
This week's DOTW is soaring over its competition. The company
has been landing contracts left and right, and all the news
surrounding the company is geared towards greatness. The stock
is a little more pricey than most of the DRIPs that I have
featured on DripAdvisor.com for the past couple months, but with
a minimum investment of $25 a year to $12,000 a year bodes well
for those dividend investors that have less investment income to
designate to their portfolio. Without further ado, this weeks
Drip of the Week is Textron, Inc (NYSE: TXT).
On July 22nd, Cessna Aircraft Company, a subsidiary of Textron,
announced that TAG Aviation USA, Inc sold half of its ownership
interest in CitationShares Holding, L.L.C. to the company. This
boosted Cessna's ownership from 50% to 75%, giving them more
income to develop new technologies, which could help boost
Textron's balance book.
On the same day, Textron landed a $230 million contract from its
Bell Helicopter division, which sold 26 twin-engine helicopters
to Pakistan in Support of the War on Terrorism.
On July 29th, Textron Marine & Land (a fully owned subsidiary of
Textron) was awarded a contract by the United States Project and
Contracting Organization. The contract was to manufacture
additional Armored Security Vehicles on behalf of the Iraqi
Minister of Interior. It's estimated to be worth approximately
$50 million for the production of 43 Armored Security Vehicles to
the newly formed Iraqi Civil Intervention Force and will be
employed in the ongoing effort to provide security and stability
On August 19th, TXT was granted yet another multi-million dollar
contract ($49.4 million), supplying Lidar Application for
Vehicles with Analysis (LAVA), by the Air Force Research
laboratory's Directed Energy Directorate at Kirtland Air Force
Base in Albuquerque, New Mexico.
I am listing all of the contracts for one simple reason. The
fact is that Textron's stock has been picking up steam throughout
2004, even though their financials have not been that impressive.
Early in the year the company was seeing its net sales and net
income declining due to lower Citation business jet volume and
lower demand, as well as higher special charges and a reduction
of gain on sale of business. Now that the third quarter has been
laced with contracts galore, it appears that Textron will more
than likely announce earnings in the green, which bodes even
better for a continuation of the rise in their stock.
The stock closed on October first at 65.47 and according to their
Point-and-Figure chart, Textron has a bullish price object of
84.00. If the stock can fly into the 80 range, we will have an
absolute return of approximately 30%.
Over the past 52-weeks of trading, TXT has gained 60.47%. In
fact a year ago this Thursday, the stock was trading at $40.65,
and like I said, the last few quarters have been a little weaker
than expected. Keeping that in mind, what do you think a few
in-line, or better than expected earnings will do for Textron?
Textron has been flying through a nice regression channel that
has served as support and resistance for the stock for the entire
year. According to the daily MACD indicator, TXT just produced a
fresh buy signal, and rightly so, since the company has tacked on
more than 3 points in its past week of trading. I am forecasting
more of the same over the course of the next year.
Textron has an annul dividend yield of 2.02 percent, or $1.30,
per share owner, per year.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Plan your trade, and trade your plan.
Until Next Week,
Editor In Chief
Strong Buy 3
Strong Sell 0
Brokers Covering 14
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $25-$12,000/year
Reinvestment Fees -
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: $1.00
First Chicago Trust
40 Westminster Street
Providence, RI 02903
Phone: (401) 421-2800
Fax: (401) 421-2878