Bert’s August Dividend Stock Watch List

It has been a few months since I have purchased my last stock and man oh man am I starting to get an itch.   Times have been interesting for me recently. I am arms deep in working through project after project in our new house and have been hoarding my cash lately in the event we stumble on an unexpected “surprise.”  But I am extremely motivated to purchase some stock after seeing my cash balance increase, Lanny make some moves by purchasing Cisco, and reading through so many great dividend income summaries in our monthly dividend income summary from the blogging community.  It is getting harder and harder to resist.  So now, I thought I would put together a watch list to prepare for when the right moment strikes.

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My August Watch List

So yes, I’m getting the itch to invest.  But I’m not expecting my next investment purchase to be significant.  I’m thinking it will fall somewhere between $500 and $1,000 based on the timing of the purchase.   Since this purchase won’t make too large of a splash, I am thinking I am going to focus on adding to  a position in my portfolio rather than start a new position and use this capital to continue building the foundation I have laid down in a few different stocks.  Cisco is a great company with awesome metrics, but this would knock them out of the equation for now.  But watch out at a later time!   Here are the three companies that I am watching closely.

Stock #1 – Cardinal Health (CAH) –  After their last earnings release, this one is jumping off of the table at me.  CAH’s stock price has fallen ~13% in the last month and their dividend yield is now over 2.75%.  Much higher than the initial dividend yield when I purchased the stocks.  Further, their current and forward P/E ratios are around 16X and 13X, respectively, depending on the source for analyst estimates that you use.    Their ex-dividend date is not until the end of September though, so I’m not exactly in a hurry to make a move here.   I think this is a great opportunity to add to one of the largest healthcare companies out there despite some of the noise in the broader industry.

Stock #2  – CVS Healthcare (CVS) –  I first purchased CVS back in April when the company was trading at $77.83.  Why?  It was simple.  The company passed our stock screener with flying colors by trading at a multiple well below the market, having a low payout ratio, and a strong dividend growth rate.  As I write this article, CVS is trading at $79.41 at $79.41 and there has not been a change in the company’s forward outlook.  Aka, nothing significant has changed since I started a position.  Right now, I only own ~14 shares of the company and received my first quarterly dividend check of $7.54 from the company.  I would LOVE to increase my position and the dividend check that I am receiving from them on a regular basis.

Stock #3 – Realty Income (O) –  Ah ha.  This company has not been on my watch list for a long, long time.  But let me tell you, I have loved receiving the monthly dividend checks from Realty income, that’s for sure.   Similar to CVS, I purchased 40 shares of Realty Income at the end of 2016 when the company was trading at $57.61.  While my position is showing a net gain based on the dividend re-investment that occurs each month, the current price of $56.48 is actually lower than my initial purchase price.  At the time of my purchase, Realty Income’s Price/FFO was ~20X.  Using the most recent 10-Q, their Price/FFO is ~18.5X, indicating the valuation has decreased slightly since my initial purchase The company and environment for the organization has not changed significantly since my initial purchase and I still love the company, their increasing dividends, and the diversity of tenants compared to others in the industry.  They are also the highest yielding company on this watch list, so this would get me the largest bang for my buck in terms of dividend income.

There it is, a short and sweet dividend stock watch list here for the coming month.  Hopefully the market will present a nice opportunity over the next few weeks to continue building a position in my portfolio.   Soon, when the dust settles for my move, I cannot wait to dive back into investing full-blown and really jolt my portfolio going forward.  Each small investment adds a small amount to my income, which as we all know, helps further increase my future income stream and brings me that much closer to FIRE and early retirement.  We all know that EVERY DOLLAR COUNTS, so it is time to make a move or two and keep the ball moving forward!

What do you think of my watch list?  What companies do you have your eye on over the next few weeks?  Any on this list?  If not, why are you excluding them?  What investment moves have you made over the last few weeks?

-Bert

DISCLOSURE: I DO NOT RECOMMEND ANY DECISION TO THE READER OR ANY USER, PLEASE CONSULT YOUR OWN RESEARCH. THIS IS ACTUAL DATA, ANALYSIS, HOWEVER I BASE NO INVESTOR RECOMMENDATION.  THANK YOU FOR YOUR UNDERSTANDING.
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28 thoughts on “Bert’s August Dividend Stock Watch List

  1. My favourite from the list is definitely CVS. It has been off my radar recently, but it looks like a great buy for me.
    I woult also love the monthly dividends from Realty Income, but I have the feeling we will see REITs at bit better prices during next year. I was also bit reluctant adding more position to HCP for the same reason.
    In the next few months I won’t have chance to add a lot of dividend stocks to my holdings; I envy you guys! 🙂

    • I love CVS, both as a stock and shopping. My wife and I were shopping there the other day as a matter of fact. Are you thinking of adding a position if it is hitting all of your metrics? Interesting point about Realty Income. The price hasn’t moved since my purchase and perhaps you are right. I just know I would love to see a bigger dividend check each month.

      Bert

  2. I have been watching CAH for a while. Opened a position with them a few months ago. And now I can finally lower my cost basis! But sadly, I don’t have any available cash. All big payments are hitting this month so I need to make sure I can cover them first before buying more stock. What do you like best of the three choices?

    • Understandable with the cash flow item. Luckily you have a little bit of time before the ex-dividend date, so you may be able to eek out a few shares after your payments are behind you. If I had to pick right now…I would select CAH. The metrics are great and the yield is approaching 3%. Great company and I would love to build on my position. A hidden benefit is that they are also an “off dividend” payment month, so it will beef up a non March/June/Sept./Dec. month.

      Thanks,

      Bert

  3. Bert, I don’t have any of the stocks you mention on my watch list, although I already own Realty Income. So, my vote goes for O. Haha. But, if I were you, I would definitely scratch that itch and make the small investment, even if it’s between just the $500 to $1000 you mentioned.

    • haha fair enough choice in selecting O. Appreciate the advice and I’ll most likely be scratching next week haha What companies are on your watch list here? Any others that I should be considering?

      Bert

  4. Don’t know too much about CAH, but I know CVS is good stock to own. O is on my watch list, but at the moment I am not looking to purchase any more REIT’s in general as I am trying to diversity my portfolio better outside REIT’s. But we will see how it goods. Thanks for sharing!

    • MDD,
      All three of them are great companies. What is your allocation to REITs? That makes sense that you want to diversify away from that sector if you are very overweight. What’s funny is that I did that with oil stocks just a few years ago. Now, my oil allocation is middle of the pack compared to other industries. It is funny how you different sectors become over and then under weighted throughout the life cycle of your portfolio.

      Bert

  5. CAH is continuing its slide and is my pick from the names you mention above. With that yield moving closer to 3% it’s becoming more and more attractive to me. We’ll see if I buy or not this month. As you said, there’s no rush because of the ex-date. Thanks for sharing.

  6. Nice watch list. Interesting to see Realty Income on that list. I’ve been a long time owner of them as well but have only been purchasing them with dividend reinvestment since my initial purchase. I own them in my Roth IRA so will have to wait until January if I want to purchase any more. I bought it for $41.63/share back in April 2014. It is always hard for me to buy more of a company when I’m up 35% in it already, but good companies will do that to you. If it stays near the current levels, I likely will add a bit more to my position come the new year. Personal Capital tells me that I’m underinvested in REITs so that might be my opportunity.

    Scott

    • I thought about purchasing O at the same time in 2014, but for some reason held off and looked elsewhere. It is funny how you are mentally hesitant to purchase companies that have appreciated. However, that’s why I trust the metrics at that moment in time. If the metrics say buy, then that weighs more in my mind than the appreciation that has occurred. Thanks for stopping by!

      Bert

  7. I own all 3 stocks, Bert, so I like your choices. Of the 3, I think CAH is offering the best entry point. There’s some uncertainty surrounding the stock at this point, so that may lead to the best opportunity from a price perspective. Looking forward to see if you end up purchasing any of these….

    • Thanks Engineering! I may be adding some shares of CAH this week, so I agree they have the best entrance point. Long term, they will be able to weather the uncertainty that may arise.

      Take care,

      Bert

  8. Hey Bert,

    really like the stocks on your list, especially CVS and Realty Income. In my opinion you can’t be wrong with O at this valuation. Maybe the price falls a little more, but who knows…and the dividend history is rock solid. With a yield over 4% it is an income machine. I own 170 shares of O and plan on adding.

    Cheers,
    DividendSolutions

    • Dividend Solutions,

      Thanks. I feel like O is just one of those classic companies that you can buy at any time, even if it is at a slight premium. If I wait for it to trade at a heavy discount, I feel like I will be waiting forever. I can only imagine how nice it would be to own 170 shares of that powerhouse haha

      Bert

    • Thanks – What’s funny is that I just caught onto ADM this week as well. They are another company that should been on this list but I left it off. They have a great yield right now and I would love to add to my position. It has been a long, long time since I considered them, so it may be time to bring them back into the mix. Do you think you are going to be buying??

      Bert

  9. Hey Bert,

    I bought O a few month ago for a higher price so I might average down on that. CAH is on my watchlist for a while, among many other companies unfortunately. I’m going to need way more money to work that list off, thankfully I just pulled a Sunday night shift, that helps 🙂

    Cheers
    DividendWombat

    • DividendWombat,

      Wouldn’t it be nice if we all had enough money to add every stock on our watch lists? I wish the decision was a simple as “Hey I’m adding money into all three” haha That is AWESOME that you are pulling in a few extra shifts to increase your cash flow. Freaking awesome!

      Take care,

      Bert

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