Bert’s March Dividend Stock Watch List

The final month of the quarter is flying by.  Where has time gone?  With just under half of the month left, I wanted to follow Lanny’s lead and prepare a March Dividend Stock watch list myself.  Fresh off of my recent portfolio review, I am ready to continue pushing forward and grow our portfolio.  This listing will have three stocks on it.  Let’s dive into my March dividend stock watch list.

I mentioned in a Tweet how this market is making it difficult to find a potentially undervalued dividend stock.  March is yet another month of insane stock price appreciation.   Luckily, with the help of a few Twitter followers, I was able to identify three stocks to keep an eye on.  For each of the companies, we will use the following sources for information while running them through the infamous Dividend Diplomats Dividend Stock Screener:  Share Price as of 3/20/19 close, Average EPS per Yahoo!Finance, and the annual dividend per dividendinvestor.com.

Dividend Stock #1: CVS Corporation (CVS) – CVS has received a lot of coverage on our website recently.  In fact, it was Lanny’s recent purchase and I may have already added a small mount to my position this month.  The stock price at the time of Lanny’s last purchase was $58.33/share.  Now, the company’s price is in the mid-$50s/share.  CVS’s stock price continues to fall subsequent to the close of the CVS/Aetna merger.   The company’s current P/E ratio is  8.15X ( $56.16/$6.89), the dividend payout is 29% ($2.00/$6.89), and the company’s current dividend yield is 3.56% ($2.00/$56.16).

Sure, it may be a few years before the dividend increases again due to the acquisition and the acquired debt.  The prudent thing for management to do is to reduce their debt.  In the meantime, we will collect a nice dividend at an above market yield.  It is nice to see that the dividend payout ratio is only 29% as well. I would be much more concerned with the debt load if the dividend payout ratio was close to 100% and a sudden drop to earnings could result in a dividend cut.  But that is a very, very solid cushion.  I currently own 36.312 shares and would love to increase this amount to at least 50.

Dividend Stock #2:  Westrock Company (WRK) – WRK is a company that was new to my portfolio in 2018.  I initiated a position in the packaging giant during Q3 and continued adding in Q4.  Now, I own 46.132 shares of the company.  Despite my efforts to add when the price fell and lower my cost basis, I am staring an unrealized loss in the face.    The company’s current metrics continue to look great and may be calling for me to continue lowering my cost basis.   WRK’s P/E Ratio is  8.90X ($37.65/$4.23), their dividend payout ratio is 43% ($1.82/$4.23), and the company has increased their dividend annually since 2015.   With a dividend yield of 4.83% ($1.82/$37.65), the company’s yield continues to climb higher and higher.  The company’s yield is much higher than my Yield on Cost (3.65%).

Dividend Stock #3: Home Depot (HD)  – This is the least likely contender on my list and the price would need to fall more before buying.  But with a dividend yield of 2.92% ( $5.44/$186.10) and a recent 32% dividend increase, Home Depot caught my attention.  The company’s P/E Ratio is 18.40  ($186.10/$10.11) and their dividend payout ratio is only 49.5% ($5.44/$10.11).  Home Depot performs well in our stock screener and has room to continue growing their dividend.  Although I doubt that HD would continue announcing 32% dividend increases!  If the yield crosses 3.25%, I would be much more likely to jump the gun and add a position to my portfolio.   With these metrics, HD earned a firm spot on my watch list.

On a different HD note.  It is my home improvement store of choice and I selected them as my company for the Home Improvement category in the Bumped app (See our review of Bumped here).  So now I will start receiving cash back in the form of stock from Bumped at least!  It is likely I will continue shopping here over Lowes, so it would be nice to own a company that I shop at regularly.  Thanks Eric Landis for bringing HD to my attention at their current price.

What do you think of the three companies on my watch list?  Do you have any other companies you are watching?  Are you having a hard time finding stocks to add to your watch list as well?  How are you approaching this bull market?

Bert

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9 thoughts on “Bert’s March Dividend Stock Watch List

  1. hey Bert

    No questions the market has made it hard to find something.

    nice list cvs looks tempting for sure. This week I plan on topping up my position in Bns. Hopefully the market cools off a bit before next months purchase.

    Cheers man!

  2. I like the approach of choosing the company as the real business. If you shop at HD instead of Lowes, chances are other people shop at HD too. I also shop at Home Depot in Canada over other department stores.

  3. Nice list Bert. I initiated a position in CVS a couple of weeks ago. I couldn’t resist their price at $53 when I purchased them and it was really hard to find deals elsewhere. The debt levels are worrying but I took the risk and hope that it will pay off in the long term.
    It will be interesting to see what you end up buying!
    BI

    • Thanks Broke Investor. That is a heck of a price. If it dips to that again, I’ll run to the store to buy haha Sure, the debt is high. BUt I like the plan to pay down the debt and pause the DG for a little to take care of it. I’m glad I put the watch list together before today. There is a lot of red out there!

      Bert

  4. Bert,
    Despite CVS’ DG slowdown, it is on my radar. I already have some, but the opportunity is unique enough that it merits a close eye.
    Also since you keep talking WRK (which I now watch thanks to you all), I suggest you look at EMN. Same general industry, different sub-industry.
    – Gremlin

    • Gremlin,

      CVS should definitely be watched at these levels. Between CVS and WRK, I have my hands full! I’ll take a deeper dive into EMN this weekend. Their dividend growth has been solid over the last five years (11%) and they have a nice yield (3.1%). The payout and P/E meet our metrics as well. All in all, definitely worth a deeper dive!

      Bert

  5. Bert,
    I am a fan of CVS’s integrated business model, which will be hard to beat once they free up more cash to invest in their Minute Clinic offerings. As you noted, there will be plenty of room for dividend growth once the debt is under control. I will likely add to my position in the near future.

    Wayne

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