Dividend Stock Watch List: Lanny’s April 2020 Edition

dividends, dividend stocks, investing

Hopefully your stomach has been able to endure the extreme volatility, as of late.  We have literally seen 10%+/- swings on any given day recently.  If there is time to stick to your sound dividend research and investment strategies, it is now.  Let’s buckle up and read Lanny’s Dividend Stock Watch List – April Edition.

Dividend stock watch list

The stock market is down almost 24% in the last month and it was even worse than that, as you can see lower dips below.  The dividend stock world has been able to find some 3-5 year lows on dividend aristocrats and other investments alike.  The Coronavirus pandemic continues to spread through the world and shake the global economy.

Here in the US and Ohio, we are on Lockdown.  I work in an essential industry – banking – and therefore, am still going in and serving the community.  I have never experienced so much fear, volatility and concern.  This is a very historal time in our lives folks.

As a dividend stock investor, for the first time, I have feel a little uncertain of what the future may hold.  We continue to save and invest in very conservative dividend stock investments, in smaller purchases.  I have written two articles related to the topic of – the Coronavirus Dividend Stock Watch List and Industries that truly thrive during a pandemic.

See – Lanny’s Coronavirus Dividend Stock Watch List

See – Industries Built for the Coronavirus and Dividend Investors

See – Why I Don’t Time or Predict The Market

Therefore, with using the Dividend Diplomat Stock Screener, there is always an undervalued dividend stock up for grabs, that’s where Financial Literacy and Research pays off.

Here is a display of what the market did in the last 30 days:

S&P 500

In addition, capital is necessary to make any dividend stock purchase that is on this watch list.  How do I do it?

I save anywhere from 60-85% of my take-home pay and strongly believe Financial Freedom does not happen by hitting a home run on an investment.  Nothing matters more than your savings rate on your journey to Financial Freedom, plain and simple.

Therefore, I work my butt off to make sure expenses remain in-check and that my savings rate are meeting our investment and financial independence goals!  Then, you rinse and repeat.

See – 5 Ways to Save $500… TODAY

AT&T (T)

AT&T, ATT, T

The big telecom!  It’s no wonder AT&T (T) fits on my dividend watch list during the coronavirus pandemic.  Internet an entertainment have not been more used, than ever.  Cell phones, data plans, internet, television, streaming, the list goes on.  These are all in heavy use, especially during work at home and self-isolation periods.

Further, their stock price has also dropped from the start of the year of $38.86, down to $29.84 as of March 27, 2020.  That’s a solid 23% stock price drop year-to-date.  Further they belong on the Top 5 Foundation Dividend Stocks for YOUR portfolio.

See – Top 5 Foundation Dividend Stocks for Your Portfolio

We also put AT&T (T) through the Dividend Diplomat Stock Screener:

Price to Earnings (P/E) Ratio:  Analysts of AT&T are projecting $3.59 in earnings per share for 2020. This represents a price to earnings ratio of 8.31, which is insanely low and is far more undervalued than the S&P 500 index or stock market as a whole.

Dividend Yield and Dividend Growth:  AT&T is paying $2.08 in dividends per year.  At a share price of $29.84, this dividend yield calculates to be 6.97%, well above the S&P 500 dividend yield and my portfolio’s overall yield.  AT&T is also a dividend aristocrat and steadily raises their dividend approximately 1 cent per share, per quarter.  I anticipate that happening again this year.

Dividend Payout Ratio:  In addition, given the projection is $3.59 in earnings, the annual dividend is $2.08 per year.  Therefore, the dividend payout ratio ends up at 58%.  The dividend payout ratio ends up in the desired 40%-60% payout range.

General Dynamics (GD)

GD, General Dynamics

General Dynamics (GD) will keep the streak of having another dividend aristocrat on this dividend stock watch list.  They are one of the largest aerospace and defense corporations, 6th largest in the world.

Similarly, they were trading at $176.35 at the start of the year and have dropped to $130.07, a 26% drop.  Further, their yield has finally swelled to over 3%.

Therefore, the 26% drop has opened up quite a bit of opportunity for dividend investors.  Using the Dividend Diplomat Stock Screener, here are the stats based on the close price of $176.35: 

Price to Earnings (P/E) Ratio:  Analysts of GD are projecting $12.56 in earnings per share for 2020. This represents a P/E ratio of 10.36, which is insanely low and is far more undervalued than the S&P 500 index or stock market as a whole.

Dividend Yield and Dividend Growth:  GD is paying a $4.40 dividend per year.  At a share price of $130.07, this dividend yield calculates to be 3.38%, well above the S&P 500 dividend yield and slightly below my portfolio yield.  GD is a dividend aristocrat and recently increased their dividend by 7.84% earlier in March.  Yes!

Dividend Payout Ratio:  In addition, given the projection is $12.56 in earnings and the annual dividend is $4.04 per year, the payout ratio is 35%.  GD’s dividend is protected and increases should continue to happen.

3M (MMM)

3M, MMM

The trifecta to the dividend stock watch list, the third dividend aristocrat. Further, 3M also is aiding in the fight against the coronavirus by producing N95 respirator masks.  However, I digress.  For those of you that do not know 3M, they are a conglomerate of sorts, producing and selling goods related to consumers, healthcare and safety.

Similarly, they were trading at $176.42 at the start of the year and have dropped to $133.24, a 24.5% drop.  Further, their yield has finally swelled to over 4%.

Therefore, the 24.5% drop has opened up quite a bit of opportunity for dividend investors.  Using the Dividend Diplomat Stock Screener, here are the stats based on the close price of $133.24: 

Price to Earnings (P/E) Ratio:  Analysts of GD are projecting $9.19 in earnings per share for 2020. This represents a P/E ratio of 10.36, which is insanely low and is far more undervalued than the S&P 500 index or stock market as a whole.

Dividend Yield and Dividend Growth:  GD is paying a $5.88 dividend per year.  At a share price of $133.24, this dividend yield calculates to be 4.41%, well above the S&P 500 dividend yield and also my portfolio yield.  MMM is a dividend aristocrat and recently increased their dividend by 2% earlier in February.

Dividend Payout Ratio:  In addition, given the projection is $9.19 in earnings and the annual dividend is $5.88 per year, the payout ratio is 64%.  GD’s dividend is right above the top part of the 40-60% payout range we desire.  The dividend appears to be OK, but growth is expected to be low.

Dividend Stock Watch List Conclusion

The best part about all 3 companies above is that they all are currently part of my dividend income portfolio.  Prior to making any purchase, I definitely will make sure to run them through the Dividend Diplomat Stock Screener once more.

All of them look like great opportunities for a dividend stock investor.  These are very uncertain times and the 3 companies above, General Dynamics, AT&T and 3M bring a sense of certainty to your portfolio.

As you have noticed, I have trickled many articles on this page.  The goal is to educate new dividend investors out there, or to sharpen the terminology for current dividend investors.  As always, stick to your investment strategy and dividend stocks will be there.  What do you think of these stocks above?  Thank you, good luck and happy investing everyone!

-Lanny

14 thoughts on “Dividend Stock Watch List: Lanny’s April 2020 Edition

  1. nice list Lanny

    3 great companies. After this latest rebound I’m debating adding to our 3m position since they haven’t bounced back like some others.

    T is gaining some of my interest as telcos should continue to do well in this environment. That debt load still scares me though.

    Take it easy Lanny. Look 4ward to seeing which one you decide
    cheers

    • PCI –

      An interesting market out there. I do like AT&T during this time period, as their services will continue to be used!

      Looking forward to dividend increases, hopefully, this month – on top of dividend stock purchases!

      -Lanny

  2. Like all three name of course these days I can produce a list of 20 stocks I’d like to buy. I recently started a new GD position. I might want to spread my portfolio out more in April with a buy in MSFT or AAPL or CSCO. We’ll see. Thanks for sharing.

    • CW –

      Love it, $T will continue to be used throughout this Pandemic and they could be even more important than ever. Curious what entertainment/movies/film will be testing/trying out.

      -Lanny

Leave a Reply

Your email address will not be published. Required fields are marked *