Dividend investing is BACK baby! Talk about undervaluation finally coming out of the wood work! So pumped up to add to my dividend stock portfolio, as the stock market is down almost 300 points in the S&P 500 to start off 2022.
In addition, dividend increases have been a plenty. I have a strong feeling and indication that 2022 will be another fantastic year for dividend investors.
Therefore, as I do every month, here is the Dividend Stock Watch List for February 2022!
Dividend stock watch list
Another dividend stock watch list! The stock market has been more volatile than ever since the pandemic of 2020. What does that mean? New undervalued dividend stocks are coming to light baby! It’s all about buying dividend income producing stocks – the best source of passive income source on your journey to financial freedom!
The stock market, specifically the S&P 500, shad touched 4,300 briefly, but has since sprouted back up to over 4,500. Still, far from the highs of 4,800 (for now). Chart is below:
Interest rates are significantly low on your savings, including high yield savings, accounts, as well as money market accounts & funds. In fact, Ally Savings reduced my interest rate to 0.60% back in September 0.50% in mid-December of 2020. Luckily, I can still say that I am earning 0.50% on my savings account as of February 2022. Will that stay, though? I am taking matters in my own hands… HOW you ask?
I keep MORE savings in my Yotta Savings Account, that has earned consistently over 1.50% APY and earned over 1.90% in January 2022. The account is FDIC-insured, of course. Definitely sign up if you want to have fun and earn more yield on your savings account!
Related: Sign Up For Yotta Savings
What else has been going on? I have been investing more and more into Fundrise, as of late – finally crossing over $10,000+ invested there. See my Q3-2021 review. In addition, I have been LOVING the SoFi financial app and platform. In fact, check this article out, as I showcase how SoFi has helped me build wealth this year. You can earn bonus money for opening an account, as well as free stock! Definitely check it out.
As a dividend stock investor, it’s been harder and harder to find an undervalued dividend stock.
See – Why I Don’t Time or Predict The Market
In addition, given the uncertainty, I continue to make smaller, weekly investments into Vanguard Exchange Traded Funds (ETFs). The specific ETF my wife and I have been loading up on is Vanguard High Dividend Yield (VYM). We are investing $400-500 per week into Vanguard (pending the VYM stock price), to stay invested in the market, during the uncertain times.
Related: Why I’m Investing $500 Weekly with Vanguard ETFs
Therefore, on the road to financial freedom, acquiring assets that produce cash flow or income is the goal! Like I always say, there is always a diamond in the rough. How do I find an undervalued dividend stock? Time to introduce our beloved Dividend Diplomat Stock Screener!
Dividend Diplomat Stock Screener
If you don’t know already, we keep the stock screener metrics to THREE SIMPLE items. They are:
- Price to Earnings Ratio – We look for a price to earnings ratio < than the overall Stock Market.
- Payout Ratio – We aim for a payout ratio between of less than 60%.
- Dividend Growth – We like to see history of dividend growth in a company.
See the video below, for further details and explanation. If you don’t like to watch videos – see our Dividend Diplomat Stock Screener page!
Time to find the answer to… how did the dividend stocks on my watch list grade on the stock screener?
Dividend stock watch list
Here is the list of dividend stocks that are on my radar going into the month of February 2022. I typically like to keep it at 3 dividend stocks, keeping the focus locked in. Finding dividend stocks isn’t easy, but there are also other factors, such as composition of my portfolio by industry (such as – am I overweight/underweight in an industry), as well as exposure to one stock and the concentration there.
There, the dividend stocks on my list cater to those other facets when building a dividend stock portfolio. This is a fairly defensive, consumer-goods intensive, dividend stock watch list!
T. Rowe Price (TROW)
This dividend aristocrat is BACK on my dividend stock watch list. T. Rowe Price (TROW) is one of the largest asset management firms in the world.
First, however, we MUST run them through the Dividend Diplomats Stock Screener, which is focused on these 3 metrics.
- Price to Earnings Ratio: T. Rowe’s analyst expectations are $12.92 in forward earnings per share. Based on the latest stock price as of February 1st of $155.75, that equates to a price to earnings ratio of 12.05. Decent sign of undervaluation here.
- Payout Ratio: The dividend aristocrat here pays a quarterly dividend of $1.08 or $4.32 per year. The dividend payout ratio at the time of this article is 33%.
- Dividend Growth: T. Rowe Price (TROW) has been increasing the dividend for 35+ years. In addition, they occasionally shell out a special dividend to shareholders every few years. The 5 year average dividend growth rate is 15%.
The yield is almost 3% and I already own over $13,000+ within my dividend stock portfolio. Given I own so much T. Rowe Price, I will wait for the stock price to possibly hit $140 before I buy more shares. I did buy 1 share at $160 and at $150. Would love to see another stock price drop!
anthem (antm)
Staying on my dividend stock watch list is Anthem (ANTM). Who is Anthem? Anthem is a fortune 500 company and is one of the largest health insurance companies in the United States.
In fact, we recently showcased a YouTube Video about this High Dividend Growth stock! Definitely worth checking out at this video from last month.
This could be a great stock to buy, as we go through the metrics, as they could add a steady stream of passive income with a high growth rate to that passive income source. Anthem stock crushed 2021, well beating the S&P 500 return of 28%. However, this dividend beast is now down $26 per share, year-to-date and is down almost $30 since the last month article.
How could this almost $500 stock be on my dividend stock watch list? Let’s run them through the Dividend Diplomats Stock Screener to find out!
- Price to Earnings Ratio: Anthem is trading at $438.90 at the moment. Now that analysts project $32.27, this equates to a very nice price to earnings ratio of only 13.60. Now do you see why they are on the list?
- Payout Ratio: Earnings are projected to be $32.27 and the dividend is now $1.28 per share, per quarter or $5.12 for the year. The payout ratio is insanely low based on the expectations the company has. The payout ratio is 16%. Bottom-line, extreme safety in the dividend with this payout ratio. Also – I expect high dividend growth from Anthem, see the next metric.
- Dividend Growth: Anthem has been increasing their dividend around 11 years. In addition, the 5 year dividend growth rate stands at 12%. The most recently increase was over 13% a week ago! Therefore, Anthem gracefully passes this dividend stock metric.
I was able to pick up and buy 1 share of Anthem (ANTM) stock a week ago at $430 per share. It’s coming back down and wouldn’t mind grabbing another share, to build up a 4-5 share position soon.
Starbucks (SBUX)
Whoa.. Starbucks (SBUX) is BACK on the dividend stock watch list. Why? They FINALLY are back below $100 per share, that’s why. This icon, the green goddess or the “double tailed” mermaid, finally is back on my radar.
Starbucks is a culture. They bring happiness, joy and people together. I whole-hardheartedly believe they are a “good” soul based company. Very happy that their stock price has slid almost $18 year-to date or 15%!
Therefore, time to see how Starbucks looks through the fundamental stock metrics. Here we go.
- Price to Earnings Ratio: Analysts are currently expecting $3.99 on a share price of $98.76 for Starbucks (SBUX). This calculates out to a price to earnings ratio of 24.75. A little on the higher side from a P/E Ratio standpoint, but slightly lower than the S&P 500, as well as other food competitors right now.
- Payout Ratio: Starbucks (SBUX) pays a $0.49 per share, per quarter. The total dividend paid is $1.96. This equates to a current dividend payout ratio of 49%.
- Dividend Growth: Going on 11 years of dividend increases, Starbucks isn’t shy when rewarding shareholders. The 5 year dividend growth rate is almost 17%. The last few dividends are between 8% and 9%. Curious if that dividend growth trend continues going forward. Still at 8%+, I am still completely fine with that.
I only own 26 shares in my dividend stock portfolio. Wouldn’t mind to continue to add 4-5 shares, but would like it just slightly lower in share price. Is $90 too much to ask for, relating to Starbucks?
Dividend Stock Watch List Conclusion
Dividend investing is real and is happening! Here is our video covering the Dividend Stock Watch List for the month!
Of course, prior to making any purchase, I definitely will make sure to run them through the Dividend Diplomat Stock Screener once more.
Talk about great, every day dividend growth stocks. My order, right now, would be Starbucks (SBUX), Anthem (ANTM) and T. Rowe (TROW). How about you?
Related: 5 Reasons Dividend Income is the Easiest Passive Income Source
As you have noticed, I have trickled many articles on this page. The goal is to educate new dividend investors out there, or to sharpen the terminology for current dividend investors. As always, stick to your investment strategy and dividend stocks will be there. What do you think of these stocks above? Thank you, good luck and happy investing everyone!
-Lanny