Lanny’s February Dividend Stock Watch List

Dividend Stock Watch List

This is not a complete revamp nor are these any new companies that I don’t already have in my portfolio.  Does that matter?  Hell no, as my dividend portfolio is in need of dividend paying and growing companies!  If they are already in my portfolio, even better.   Further, trying a new format, where I’ll discuss a few quick metrics from our screener, in order to efficiently show why they are on my radar.

1.) AT&T (T) – Who else has them on the list?  The big telecom is still making noise but I do feel it’s been a while for me, since I have looked at them.  I know Bert had purchased shares a bit ago and, well, their price just isn’t moving.  Analysts are expected $3.57 earnings per share and their recent earnings release looked solid.  Their dividend per year of $2.04 equates to a payout ratio of 57%, somehow, which is a very solid number for them.  In addition, their yield currently is approaching 6.75% (as of 1/31 close).  They are a dividend aristocrat with a modest 2% dividend growth rate as of the recent few years.

2.) CVS Pharmacy (CVS) – Outside of holding the dividend (and for another potential year or so), it’s hard not to love CVS.  I wrote about the debate between them and Walgreens (WBA) here, and the battle is truly fierce.  In short, they are liquid and make a TON of money, especially after this Aetna acquisition.  Historically, they usually pump out a solid growth rate, but due to new debt taken on for the Aetna deal, they halted growth on the divvy.  That’s okay, as they are trying to manage their balance sheet and cash flow.  Their payout ratio is a modest 26% and this resembles a dividend stock that is locked and cocked for dividend increases in the near future!

3.) AbbVie, Inc. (ABBV) – Who DOESN’T have ABBV on their dividend watch list?  They got pummeled after earnings, though 18 analysts anticipate $8.75 in earnings per share, to which they are trading at $80.29.  This represents a very low 9.2 price to earnings ratio and that means they are sporting a 49% payout ratio, perfect.  I would love to build my position on this one.

Dividend Stock Watch List Conclusion

No new names, no problem.  The one area I have to look out for, though, is that I own a significant amount of shares in AT&T (T), I personally have over 200 shares and that number comes closer to 300 shares, when combining my wife’s portfolio.  Therefore, not sure how much more I’m willing to add there.  I may have recently purchased ABBV last week…if you catch my drift.  However, CVS is a company that I have a very minor position in, at less than 0.50% of my portfolio.  I am wondering if they are a company that I buy, for the opportunity of extremely strong future dividend growth.  However, could someone have said that a few years ago and now they’ve maintained the dividend for the last two years, with plans on, more than likely, doing that again for an additional year?  I don’t think they have another massive deal, like Aetna, in the tank/left in the tank.  Therefore, I would say 2020 through 2025 should be a very pivotal time period for them and potential for dividend investors.

What do you think of the 3 dividend stocks above?  Do you prefer one of the dividend stocks, over the others?  I know that ABBV has been the most-read stock I have seen on watch lists.  I do occasionally see AT&T on watch lists, but the yield is significantly higher than most companies out there (however, that payout ratio allows the dividend to appear safe).  Thank you for the feedback and reviewing my dividend stock watch list!  As always, good luck and happy investing!

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34 thoughts on “Lanny’s February Dividend Stock Watch List

  1. nice list Lanny.

    Like all 3. Got to say its great to see cvs on the list. This is one I keep looking at as its down 10% while my abbvie position is down only 5%. Cvs will be making money hand over fist soon, and like you mentioned should boost that dividend.

    Its hard to ignore the higher yields of the other 2 though!

    look forward to seeing what you do.
    cheers
    Rob

  2. Lanny,
    Solid picks, long T and CVS myself. Of them I like CVS the most – I am really intrigued to see what happens with their acquisition of Aetna – both as a shareholder and a person insured by Aetna.
    – Gremlin

  3. Hi Lanny,

    nice watch list, AbbVie is again in a buying range and I also my add some shares. AT&T is already one of my largest holding so at the moment a no go :). CVS not really on list anymore since the dividend freeze. But let’s see I have to investigate on CVS again.
    Cheers

    • DivInc –

      They took a nice plunge, right? Got to love high yielders who have the longevity of dividend increases. I know, AT&T sometimes is so difficult, since they are such a large position in the portfolio, over here, as well. Take a look at CVS metrics, very, very solid.

      -Lanny

  4. Lanny,
    Nice list! I really like T and CVS. ABBV is a great one too, but CVS (especially as they bought Aetna) looks promising. I could see them continuing they’re upward movement. T is another of my favorites, as I don’t see cell phones/cell service disappearing anytime soon.
    Coincidentally, I was looking at some stocks that pay in Feb, May, Aug, and Nov, as my dividends are weakest those months. So these three give me some great ideas. I am excited to see what you snatch up in February!
    -New2Dividends

  5. Great list Lanny! Already have T and ABBV and I am looking to add more should all the stars align right for me (especially ABBV). CVS is another great company on my watchlist. We will see what happens. Thanks for sharing! 🙂

  6. I own all three of these, too. 🙂 I am interested in expanding ABBV, and I like T… but, like you (and others), I already have a significant position in it, so it’s not my highest priority.

    I’m on the fence about CVS. I’m pretty strict about seeing *some* dividend growth each year. Your thoughts on their acquisition are interesting though. We’ll see!

  7. Our family loves AT&T, we hope to ride those dividends well into retirement and beyond! In fact, we have AT&T in three separate accounts. But how can one ignore that juicy 6.76% dividend! We’ve owned AT&T for over a decade now and know that we can always count on those dividends, in a up or down market!

    Thanks for sharing your watch list. Best wishes and continued success my friend. AFFJ

  8. My favorite from you list of 3 is AT&T. It’s valuation is beaten down and the yield is big. There are risks ($180 billion in debt) but the cash flow continues to be solid. I have no doubt AT&T shares will be much higher in 10+ years.

  9. It look’s like a really good time to invest in all of them!
    I’ve been adding to T and ABBV in the past weeks. But CVS looks promising as well. Man, too many tempting options at the moment:)

  10. Hey Lanny,

    I added 24 shares to my ABBV position at $80.00. I had initiated a position in November at just over $87 and so I figured this was a great chance to just average down.
    I work in the healthcare field and one of the biggest things that stands out for me is how our society is hooked on drugs, legal and otherwise. Many ailments that could be cured with a good brisk walk every day and a healthier diet wind up getting treated with a handful of prescription drugs. This isn’t going to change any time soon, so having a high quality biopharmaceutical in the portfolio makes sense.

    Take care,
    Ryan

    • GRB –

      Couldn’t agree more on your statements about the society and what has happened relating to drugs/legal field. And yes – averaging down, I find to be, a very smart move on your part. Pumped!

      -Lanny

  11. I need to look more into ABBV because they’ve been popping up a lot lately among several DG bloggers. I added MO and T last month as well as initiated a position in HON, I consider it fairly valued but high quality. I’m hoping to see the markets take another turn lower so I can start putting more of my cash to work but I’m pretty stoked to see some of that capital already get cycled back into the mix and of course seeing those forward dividends climb higher. Looking forward to seeing what you pick up.

    • JC –

      Nice work and hell yeah to the dividends climbing higher. You grabbed some killer yield with AT&T and MO, that’s for sure. ABBV has been VERY popular amongst the DGI community, it’s quite fascinating, right?

      -Lanny

  12. Absolutely long all three. Given that I’m still in the early stages of DGI, any one of T, CVS, or ABBV could warrant future investment in my case. In terms of both yield and growth, ABBV is certainly my favorite. Who could turn down a 5%+ dividend with annual double digit dividend growth potential over the long-term? If there is anyone that could, I’d love to meet them because they must have access to an investment strategy we never heard of. On a more serious note, it’s also difficult to turn down that 7% yield from T so long as it isn’t a full position. The 3%+ from CVS and double digit dividend growth over the long-term is also hard to resist.

  13. Also long all three… kind of kicking myself now over CVS.. got my order in too late Friday morning when it was at 62.88 and it jumped back up to over 65 again…

  14. Nice list Lanny, I own two of the three (CVS is the exception) and have one on my watch list (T). Because I’m currently happy with the size of my position with T, I am waiting in the wings in case they drop down below $28/share again. If ABBV was not one of my top two holdings right now, I would be looking to add them too.

    For CVS, I do like their numbers but I have them on my back-burner given the dividend freeze and waiting to see how the Aetna purchase shakes out. I have two companies I am holding that froze their dividend, and while that isn’t necessarily a bad thing, it requires a closer watch and that also plays into my not wanting to add them now.

    Look forward to seeing what you end up adding!

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