Lanny’s February Dividend Stock Watch List

The stock market really has slid, as of late, which is beautiful to a dividend investor.  Not only are companies announcing larger dividend increases, due to the savings from the “Tax Act”, but they are also starting to go “on-sale”.  Due to these events, I wanted to write my dividend stock watch list for the month of February.  I am entering the grocery store here with an empty cart, seeing what stocks are ripe enough to go through the check-out line with me.  Time to get to the stocks, so grab a cup of coffee and come read.

Dividend Stock Watch List

Hope you grabbed that fresh cup and are settled in to read who is on my dividend watch list.  There has been very exciting news, as of late.  Part of these exciting events have been journalized in my latest dividend income post, where 3 companies announced very large and unexpected dividend increases (Visa (V), Aflac (AFL) & Intel (INTC).  I’m going to describe why each dividend stock is on my watch list, talk about what’s impacting them, as well as using our metrics via the DIvidend Diplomat Stock Screener.  The stock prices I am using will be from February 2nd and will be based on the most recently financial data released.  Enough of boring you – check the three below!

1.) Procter Gamble (PG) – One of the top 5 foundation stocks is back on my dividend stock watch list!  Year-to-date the stock price has dropped from $91.88 to $84.25, an 8.3% decline.  The analyst expectations for 2018 for earnings per share are $4.21, on average.  The price to earnings is 20, with the stock currently yielding $2.7584/share or 3.31%.  The payout ratio is solid at 66% and I expect this to continually go down with the momentum PG has.  The dividend growth streak is over 60+ years and I expect an above average dividend increase this year (last year was 3%), given what other companies have done, thus far.  I would prefer them in the $82-$83 range and they are not too far from that point.

2.) Archer Daniels MIdland (ADM) – Another dividend aristocrat on my dividend stock watch list.  This has been one of Bert’s favorite stocks, as of late, and I can see why.  Similarly, their price is up, actually, 3.37% this year.  However, the last 12 months, the price has dropped 5.82%.  The analyst expectations for 2018 for earnings per share are $2.71, on average.  The price to earnings, then, is 15.29 at the share price of $41.43.   The dividend yield is currently at 3.09%, with expectations of a dividend increase this month, as Bert’s article relayed on (If they do increase and it’s not discussed here, it’s because this article was written before that announcement).  The dividend growth streak is 41+ years and there is no end there, for now.  The payout ratio is 47.23%, with the dividend currently at $1.28/share per year.  This gives me reason to believe there is plenty of room to grow and, similarly to PG above, I could see an above average dividend increase this year as well.  Bring it on ADM!

3.) Pfizer (PFE) – I am assuming this one is out of left field for the readers.  Bert and I both bought Pfizer last year, which was my second purchase of them, since I purchased them WAY back in 2010 (I think).  Here are a few reasons why the big pharmaceutical looks appealing: Analysts, on average, are expecting earnings per share to come in at $2.91 for the year.  At a price point of $36.61, this equates to a price to earnings ratio of 12.58, the lowest P/E ratio on my list and is fairly low when compared to the industry/stock market on average.  They had a 6% dividend increase announced in December last year, which represents $1.36 per share per year.  Therefore, the payout ratio calculates out to be 47%, plenty of room to grow their dividend come this December (A long ways away, I know).  This year, the stock price has also increased 1%, but in the last 12 months when the market has grown 20%+, Pfizer has grown around 14%, lagging the market.  They have been increasing their dividend 2 cents per share for quite a few years and, though I am no fortune teller, believe they could do an increase of 3 cents this year (an 8.8% increase).  Time will tell, but this big pharm is on my dividend stock watch list!

dividend stock watch list conclusion

Out of the three stocks above, for sake of timing I like ADM.  PFE, though, is currently in second place due to their higher yield and recent history of stronger dividend growth.  PG, though not a bad spot, is in third.  I am okay with the price points of ADM and PFE, but would prefer a slight pull back on all of them of course!  I will be keeping my eye on all three dividend income stocks this upcoming week, to see if it’s time to make a purchase.  I currently have the largest position in ADM out of the three listed above, with PG coming in last.  I wouldn’t mind building up the PG and PFE positions more.  Agh, the struggles of a dividend income investor are real.

I digress, as I know how fortunate and lucky I am to be able to talk about which stock to potentially invest in.  I obviously want to make every dollar count on using my capital, this is a big decision.  What do you think?  What is YOUR top stock here?  Any preference on one over the other?  Which would you put money into, today, regardless if you have capital or not?  I would love to hear from you!  Thank you again for reading the article, I appreciate it, as always!  Keep on saving, good luck and happy investing!

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

  1. I like your picks here Lanny. I currently hold 2 out of the 3 and I would love to strengthen those positions if I had some free capital right now. I will be interested to see which company you decide on. Thanks for sharing.

  2. Nice list.

    Im really watching jnj and pg…. i looked at pfizer. arent they selling off the consumer brands? I like that they currently have advil would suck if they sold that. Thats a big thing i like about pg tylenol is solid! People generally dont cheap out on that.
    Its tylenol or advil.

    Gonna watch how the market acts and deploy some funds. Look forward to your moves.

    Check…

  3. I look at PG also. Their price dip is very apealing. Now trades for only 81$ 🙂 PFE also looks like a very good buy. Its a real selloff now. Wonder if it will go any further 🙂

  4. It is crazy how quickly the market went from overbought to oversold. I am adding to my position in WTR at the open today. If prices decline further, I may add to are CME, HD, and/or MMM later this week.

  5. I addod to my position in ADM recently but today I doubled my position in O. So I’m pretty happy about that.

    I am also looking at PFE en JNJ but decided they would come later this year.

  6. I picked up some PG in January. I just don’t see why the big sell off. With the companies I like growing and raising dividends seems like buy buy buy to me. Guess we will never understand the other guys. lol
    DFG

  7. I got in on PFE a few years back and upped my position since then. A few times I thought about selling it, but am glad I didn’t. No doubt the divided is attractive and it’s the type of company and sector that will continue to prosper….hopefully!

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