Lanny’s August Dividend Stock Watch List

July was an interesting month, right?  June soared, but what happened in July?  Pretty much the same, as you will see within the article.  I will be honest and say this.  Finding dividend stocks that are undervalued continues to be a challenge in the summer of 2019.  Though the stock market ride is not controllable, dividends and dividend stock opportunities are there.  It’s 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 is up 3% from end of June through July 26th.  Fed is still set to announce on 7/31, about what they will do with the interest rates.  There’s been better news/talks on the trade/tariff front.  Additionally, the labor/jobs market continues to excel.  In addition, earnings releases have been fairly solid thus far.

The big ticket I am waiting on is the 7/31 Fed release on interest rates.  This could cause the market to either drop quickly or increase quickly.  In addition, the mortgage interest rates should have a nice reaction to what is announced come Wednesday, the 31st.

See – Interest Rate Cuts, YOUR Investment Portfolio & YOUR Mortgage

However, there is always an opportunity.  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.

See – Dividend Diplomat Stock Screener

3M Company (MMM)

Dividend Aristocrat Baby!  Trading at $173.98, 3M is down $45 from their 52 week high, representing a decline of 21%.  The 3M Company primarily produces items related to worker safety, health care, and consumer goods.  They’ve been around for forever, that’s for sure.

They have an approximate 60% payout ratio, with a price to earnings of ~17.5.  Further, their yield is now over 3.30%, which is far higher than where they historically are at.  Their last increase to their dividend stood strong at 5.9% and the prior two raises were 15.7% and 5.9%, respectively.  Therefore, their most recent increase doesn’t deviate from what they’ve done before.  Given their payout ratio is higher, I would anticipate low-to-mid single digit increases going forward.

See – Bert’s 5 Always Buy Stocks

LyondellBasell (LYB)

I have purchased LYB on quite a few occasions, including twice in May.    They continue to hover around that mid-$85 stock price point, which causes their dividend yield to be close to 5%.  Further, their dividend increase this last go around was a solid 5%.  They are in the chemical industry and the competition is obviously Dow Chemical (DOW), as well as Eastman (EMN).

The price to earnings is a little over 8 and the payout ratio is around 40%.  Therefore, they still have room to expand their dividend going forward.  I’ve invested ~$3,500 and I could see myself adding another $1,500 to the position.

See – The Power of the Dividend Growth Rate is Real

Dividend Stock Watch List Conclusion

3M would be a great dividend aristocrat addition to my portfolio.  Then, a full LYB position would be nice, and that dividend train will be adding shares on each DRIP!  Further, both companies above pass the Dividend Diplomat Stock Screener Metrics.  Therefore, what’s not to love?

Here is a point that I’ll make.  Even though the market can surge in a month, there is ALWAYS an opportunity there.  One has to run their metrics that they like and find the undervalued dividend stock in the mix.  The 2 dividend companies above in 3M and LYB, aren’t every day names that you see on watch lists and purchase articles.  Guess what?  That is OK!

Stick to your investment strategy and dividend stocks will be there.  As always, good luck and happy investing everyone!

-Lanny

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18 thoughts on “Lanny’s August Dividend Stock Watch List

  1. Good day to buy, especially 3M. After the Fed’s announcement, it went down 1.64%. LYB dropped .83% as well. Let’s see how much it rebounds tomorrow morning.
    I’ve owned 3M since 4/2016. And so I buy extra post-its here and thee..
    – John

    • CW –

      Nice job with 3M, hoping that they can slide below that $170 mark again. Come on market drop!!!

      Nice job on picking up their product, always fun to give back, ultimately… to yourself? haha

      -Lanny

  2. Hey Lanny!
    Very interested to see what the market does tomorrow. Stocks seemed confused after the initial rate cut announcement. Then during a discussion afterwards, Powell indicated the cut might be a one time deal…which is when the selling began. Short term spikes/sell offs are always welcome by me. I’d pick up some 3M and maybe some banks if the trend continues lower.

    Metrics for LYB are hard to resist aren’t they?

    • Passive Cash –

      Very hard to resist, no doubt!

      Additionally, another sharp drop at the end of the day, based on a tweet from Trump – is that how things are playing out now for us? A comment here, a twee there and the entire markets shake? Man, oh man.

      -Lanny

  3. I picked up some more shares of 3M to start off July right around these prices and would love to add some more if it drops into the mid-$160s or so. Most of the stuff I’m interested in is on the high side of fair value or way expensive. So patience will be key. I’ve been putting a little bit of my cash to work, but nothing is too exciting to get me to invest it all right now. All the best in August and looking forward to seeing what you buy.

  4. Nice list Lanny! 3M was one of the latest purchases I made. I got them at $165 last month. It looks like they are falling for the last few days. Looking forward to see what you end up buying 🙂
    BI

  5. LYB looks interesting to me. In fact, I am also looking at it in August. It would be a new stock in my portfolio. Seems like a fairly valued name with a well covered juicy yield. A DGI dream.

  6. Thanks for the watchlist. MMM and LYB are on my watchlist as well, although I admittedly won’t have much capital to allocate until next year outside of reinvesting dividend income.

  7. Hey Lanny,

    A bit of an opportunity today, eh? S&P 500 now down ~6% from the highs in July. I’m hoping Trump and China keep up their rhetoric and push the markets down even further so we can get some cheap buys at some point.
    As you mention, there’s always value out there… just a matter of recognizing it in the moment.

    Take care,
    Ryan

    • GRB –

      Damn right that just happened. Can you foresee another day like today this week? I sure as hell hope so. Cannot wait to add more income from undervalued dividend stocks.

      Pumped. One word. Pumped.

      -Lanny

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