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 Parcel Service, Inc. (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!