Lanny’s May Dividend Stock Watch List

Exciting times everyone.  The stock market was up in April with a plethora of Dividend Stock Increases.  However, the month of May has showed promise for undervalued dividend stocks, as always.  The weather in Ohio cannot make up it’s mind.  I literally have seen a notification say something on my phone, that baffles me.  One evening, the weather notification stated, “It will be 33 degrees warmer tomorrow”.  I’ll take the heat, but hate the swings!  Sounds like the rollercoaster of the stock market, right?  Time to check out my dividend stock watch list.

Dividend stock watch list

Here is what the market did in the last 30 days, from the screen shot below:

The market went up another 2.7%+ during the month of April!  Happy to see May 1st took a slight at the end, but this has been nothing but up.  Though the market has been on a tear, that doesn’t mean there aren’t hidden gems.  Therefore, you have to be up to the challenge.  What does it take?

It takes patience.  It also takes sticking to your strategy.  Further, using our Dividend Diplomat Stock Screener, helps identify those opportunities.  It also scopes out those that aren’t undervalued.

1.) Occidental Petroleum (OXY) – OXY remains on my dividend stock watch list.  Here are my reasons on why they are on my watch list.  First, there is a bidding war with Chevron (CVX) on acquiring Anadarko (APC).  This has sent the price downward, as in acquisitions (usually), someone overpays.  Further, Warren Buffet wants to commit $10 billion to this event, ultimately to OXY.

What has the stock price done in the first days of May?  The stock has dropped an additional 2.5%, within 2 days.  They currently are yielding over 5.40%, which is well above their 5-year dividend yield average.  Price to earnings for 2019 has dropped to the 15 range.  Dividend payout ratio is supported, at 82%, but is definitely on the higher side.

2.) United Postal Service (UPS) – What happened to UPS over the last 30 or so days? They are down 5.6% from the end of March through May 2nd.  They slid primarily due to missing earnings estimates during their first quarter.  However, even with the earnings miss, they still have a guidance around $7.50 for the year.  What is the price to earnings ratio there?  Well, that equates out to 14.1, on a share price of $105.51 everyone.  They sport a dividend yield of 3.6%.  Seems like a stock that sits nicely on a dividend watch list!

3.) LyondellBasell Industries (LYB) – A stock that I wish I had more of already!  I first purchased LYB back on March 18, 2019 at $87.45.  They are now down to $85.96 or have declined 1.7% since then.  Not too drastic, but a decline, nonetheless.  They yield a heavy 4.65%, have a price to earnings of 8.2 and are in an industry (chemicals/basic materials) that I do not have too much exposure to.

Further, they are one of the biggest chemical companies in the world.  My initial investment was close to $1,500 and I wouldn’t mind doubling down on them.  I usually like to do so, though, after a 5% drop.  That would put them in the $83 range.  That may be too greedy/hopeful, I may have to adjust that approach.  Either which way, they are on my dividend stock watch list and would love to own more!

Dividend Stock Watch List Conclusion

Interesting, right?  I have 3 solid companies in three completely different industries.  Further, their dividend yield has a solid glide along the spectrum.  I say this, because from a dividend yield perspective; UPS has 3.6%, LYB at 4.65% and then OXY over 5.4%.  Further, all three stocks are in my dividend portfolio.  Out of all three stocks, my smallest stock position is currently LYB and they just happen to be in the sweet spot on the dividend yield spectrum.  I’d love to make a move by the end of next week or May 10th.

What is your favorite of the 3?  Do you go for longevity and with the consumer shopping spree and load up on UPS for being on the road?  Do you go for high yield and big oil with OXY?  Or, do you simply stick it boring and big with LYB?  All three have dividend investment metrics I like.  I believe UPS and LYB have more dividend stock metrics I like, compared to OXY.  Decisions, decisions.  What do you do?  iAs always, good luck and happy investing everyone!

-Lanny

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20 thoughts on “Lanny’s May Dividend Stock Watch List

  1. Lanny,
    Of those three I am watching UPS closest, but I think I like FDX more. Ideally, I could just get a large bonus at work and buy both… Either way, if you mine the CCC list hard enough you can find a bunch of hidden gems.
    Good hunting,
    – Gremlin

    • Gremlin –

      Thank you and glad I’m not the only one. Which metrics do you like better with FDX? Would love to hear it.

      Of course, you can put the hat on, get the shovel and dig to find those beauties, right?!

      -Lanny

  2. UPS is on my watchlist. I will have to look closer at the other two (but I tend to stay away from oil stocks). Always like reading about potential buys. Thanks for the post Lanny! 🙂

    • PCI –

      Let’s build that capital and get ready to unload it! Market has been a roller coaster, but there are gems. LYB may just be one of them. Can’t wait to update to see if they are still looking promising after today.

      -Lanny

  3. Interesting watch list. UPS is certainly on my watch list and LYB is one I’ve been interested in too. I have virtually no exposure to basic materials and I’d certainly like to change that.

  4. Of your short list the only one I considered was LYB. Of course, I still haven’t pulled the trigger on it yet but the figures do look compelling. Seems like a good DGI pick yet you don’t see it in many DGI portfolios.

  5. I’d be curious on y’alls take on MMM is with their recent earnings disappointment. The stock is down ~18% since release 2 weeks ago from ~218 to 178 off a 5% miss. Seems like a steep drop. Current P/E is less than 19 which beats the broad market. Finally, current yield is now over 3% on a ~55% payout ratio on a 60 year dividend aristocrat.

  6. Thanks for the ideas Lanny! I am most familiar with UPS and heard about OXY from your watchlist before. If I had to choose now, I would go with UPS, but then again, I am not very familiar with the other two companies 🙂
    It will be interesting to see what you decide to purchase from those three 🙂
    BI

    • BI –

      I did end up making.. one purchase. It def. was one of the three above. I wish I had more capital, as today was another steep down day, UPS is looking very nice right now!!

      -Lanny

  7. OXY payout ratio is a bit high, same goes for XOM. It’s very tempting though when a stock gets hammered this hard. MMM is a similar story. I think CVX is the best of the bunch and has rightfully outperformed the others over the last few years. CVX is on my list, but I need a pullback.

    Amazon scared me out of UPS last year. I think others were too.

    I own LYB and have considered adding more, but my lack of portfolio diversity has me looking in other sectors. LYB has good DGI stats though for sure.

    I’m sure whichever you added will add great yield to your portfolio

    • Hi,

      In regards to your comment on MMMs payout ratio. Is 55-60% really that high? I’m frankly quite surprised around the big concern of a potential dividend cut. I don’t see MMM cutting their dividend in the long -or near future at all. However, I could ofc be wrong.

      /Matteo

  8. Matteo, sorry misunderstanding. What I meant was MMM stock has been hammered like OXY. MMM payout ratio is fine in my opinion too. I also agree, I think it’s a little early to cry dividend cut for MMM. Their earnings would have to continue to suffer in the future. There last earnings report was definitely concerning to me. All eyes will be on MMM next earning call.
    Sorry for confusion.

    • Thanks guys –

      Agree with both of you. MMM payout is solid/safe for the most part, but I anticipate slow div growth ahead, which is why you are getting more yield – now. Make sense?

      However, OXY does need to watch out, as earning expectations continue to decline. Staying put for now.

      -Lanny

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