Bert’s February Watch List

I’m getting an itch to invest.  Even after purchasing Pfizer a few weeks ago I still have some capital that I am trying to deploy.  This is eerily starting to remind me of when Lanny ran into the same problem (at the same time as a matter of fact!) of having capital to deploy but  no where to put it.    Despite the fact that the market wasn’t cooperating this week, I have my eyes on a few stocks that are getting very close to my “buy” zone.   If the prices fall next week, I may not be able to resist buying.  Time to check out my February Watch List!

Watch List

Stock #1:  T.Rowe Price (TROW) –  Well, does this really shock anyone out there?  Earlier in the week Lanny wrote a stock analysis about this asset management company and it left me motivate/excited to buy in to the company.   The only problem is that the price took off at the end of the week.  With plenty of time till the ex-dividend date, I am not running to purchase this stock and will wait and see what the market gives us over the next few weeks.  But man am I liking what I am seeing with TROW.  The company has a five-year weighted average growth rate of 14.05% (pre-announcement this week), a dividend yield over 3%, and a payout ratio just south of 50%.  Further, T.Rowe just announced a 4% increase in their quarterly dividend this week.  It sucks that this amount is lower than the impressive growth rate announced above; however, I’m excited there was an increase in an era that continues to see lower dividend increases from large companies or even dividend cuts.   Seems more like a product of the current environment to me.

Stock #2:  Target (TGT) –  My eyes were on Target last month and I almost initiated a position in the retail giant.   They are one of my “Always Buy” stocks for reason after all.  The company is yielding just over 3% and has a 3 and 5 year dividend growth rates of 17% and 19%, respectively.   I love the brand and are household are frequent visitors of this store for EVERYTHING in our household, whether we purchased clothes, food, healthcare items, or you name it!   The metrics are there and if the price decides to pull back I may decide to initiated a massive stake in the company.  The wild card here is the recent Walmart news that they are slashing their sales outlook for the year and the subsequent drop in stock price.  Is this a grim outlook for the industry this year and a sign of things to come for Target investors?  What will come of Target’s next earnings release?  Will they slash their outlook as well?  Selfishly, hopefully so because that would create a nice buying opportunity for me as I plan on holding the stock for a long…..long time.   Plus, owning a stock of a company that our household always visit would make each visit and swipe of our Red Card that much more exciting and memorable!

Stock #3: Abbot Laboratories (ABT) – Wait?  Didn’t I just purchase shares of Pfizer this month?  Wouldn’t purchasing a second healthcare stock be redundant?  My response is WHO CARES!   I am all about adding quality dividend stocks to my portfolio and will take advantage of any great opportunity that presents itself.  Plus, as I began researching the brands of the two companies, their isn’t as much product overlap as I thought as I began writing this article.  PFE has some impressive drug brands in their portfolio that are second to none, such as Advil and Viagra.   ABT’s products cover a different sector, with brands such as Similac, Pediasure, EAS Nutrition, and Ensure.  What has drawn me to Abbott Laboratories is the rough start the company has had to the year (down 13% YTD), the company’s status as a Dividend Aristocrat, their recent dividend growth rate of ~8% annually, their low debt levels that helped the company appear on this Top 5 Stock List, and the strong brands in their portfolio.   Plus, one of my 2016 goals is to invest in five new Divided Aristocrats, so adding shares of ABT would be a huge step in the right direction for me as I seek to add some quality dividend stocks to my portfolio!

Stock #4:  Norwood Financial (NWFL) – The little engine that could.  Lanny and I have had our eye on and continue to our stake in this community bank.   I’ll spare the detailed metrics of this stock because we have discussed it several times recently in our purchase articles (Bert’s purchase here and Lanny’s purchase here).   The price continues to fall and we may be forced to continue to add to our stake and increase our stake in this bank in PA.  It is a strong ROA and rewards its shareholders with a healthy dividend yield over 4%.  Plus, the company is set to increase their dividend in the next cycle.  This stock isn’t the highest priority company on my list, but I’ll look to add if a the price falls and the perfect opportunity presents itself.

That concludes my watch list for the next few weeks ahead.  I would be ecstatic to purchase any of the four stocks on this list.   My focus this year, after losing over $300 in dividend income due to dividend cuts in 2015, is building a reliable and growing dividend income stream by purchasing some quality dividend stocks.   In my opinion, adding one of these stocks would help me achieve my goal.  In the spirit of Lanny’s recent desire to purchase stocks in multiples of $3,000+, my cash on the sidelines will allow me to make quite the splash and add a three digit dividend income figure to annual amount.  I just have to keep preaching patience in these times and be ready to strike!

What are your thoughts on my watch list?  Are you watching any of the same stocks?  With Walmart’s recent slash in sales outlook, are you staying away from retail all together?   Would you purchase ABT and PFE in the same month or is that too much overlap for you?  What other stocks should I be watching as the second month of the year comes to a close?

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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13 thoughts on “Bert’s February Watch List

  1. Nice list! I was thinking of adding to my small position in PFE or start a new one in ABBV. The uncertainty with the election year and bad press drug companies is making me pause though.
    Have a great weekend,

    JT

    • Thanks JT!1 I’m loving PFE at its current prices. I would just make sure you focus on finding drug companies that have been through these cycles before and have strong products that you think can survive over the long-run. PFE checked that box for me, which is why I had no problem jumping on the opportunity.

      Have a great weekend as well and enjoy this warm weather.

      Bert

  2. Good list Bert. I, like you guys, buy a lot of our household stuff from TGT and the one near us has a Starbucks. Win win. Both are companies I will be adding to our portfolio once we start adding to it again. Best of luck on your choice.

    • What’s nuts is TGT will soon also have CVS pharmacy’s inside the store. It is an interesting strategy how they are aligning themselves with these powerhouse brands. Just another reson to get shoppers in the door every day. Plus, with the deals that are offered with the Market Pantry Brand and Cartwheel, how can you hate that store haha

      Hopefully the stock moves where I need it to so I can initiate a position. Take care and thanks for stopping by!

      Bert

  3. That’s quite a dividend yield on NWFL to go along with a long history of dividend increases. There’s so many good regional bank dividend payers out there. You just never hear about them because they’re not Bank Of America and such.

    • Captain,

      The small/community bank industry has some gems. Not too many open the lid on this sector, but I think you would be pleasantly surprised with the quality banks that offer high yields and great buyout potential. We are fortunate to know a lot about the industry so we have a good pulse on how to dissect some of these companies.

      Thanks for stopping by and enjoy this amazing Sunday!

      Bert

  4. Divhut brought my attention to Medical Device stocks and you have put NWFL on my list. If TROW had increased their dividend a bit more, I would look to add capital there. For now, I think I am okay. Thanks for the list, good look to you guys!

  5. ABT is a great company, but with ABT trading at around 22 times earnings I think GILD at less than 8 times earnings is a better bet. A lot of political uncertainty is priced into GILD, but I can’t think of a worst-case scenario where the company isn’t worth it’s current price.

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