Now that June is over, it’s time to turn the page to July. For some reason, with each new month, I have a feeling that it brings new opportunities. By opportunities, I mean new stocks to have on the watch list, as there usually is never two consecutive watch lists that are the same. I would say that goes to show you how much activity can happen, in such a short period of time. Lebron just left Cleveland, again, and turning to look at stocks helps ease the pain of seeing a fellow-Akron-born native depart. Without further-ado, here are my dividend stocks I am watching for July
Dividend Stock Watch List
Delta (DAL) – Delta Airlines has been on my watch list before, and even in recent months this year. As of June 29th, they were trading at $49.54 and analysts have an expectation of $5.87 earnings per share this year. Their price to earnings ratio is at 8.44, which is staggeringly low. They opened up this year at $55.35. Talk about a steep drop, where they have plummeted 10.5%. The most enticing piece for me, here, is that they have a recent history of stronger than usual dividend growth rates, as the 2017 increase was 50%. Can Delta (DAL) keep that growth rate up? I actually think they can do it, at least, one more time, before going down to the 15-30% growth rate range. I am flying high on this stock, right now.
Starbucks (SBUX) – Ah, yes, a dividend stock watch list wouldn’t be complete with the iconic symbol that we see across the nation. As they continually go through management shake-ups, as well as other news related to their product offerings, including store closures across the United States, I don’t believe this changes much, if anything, for the long-term performance of the ‘bux. In order for them to solidify the shareholder appetite, they boosted their share repurchase program and jacked up the dividend another 20%! This was off-schedule and was well-timed with the negative press going on. What has happened to the stock since? They have dropped over $5 per share and, as of June 29th, were at $48.85 or 14% decline since the start of the year. Further, analysts have a $2.42 earnings per share expectations, to which this equates out to a 20.18 price to earnings ratio. This is still slightly on the higher side, but much less than where they historically trade at. I am a fan of what Starbucks (SBUX) brings to the table and am keen on keeping them on my radar.
Cisco (CSCO) – They are back baby! Cisco is back on my list, as they have started to come back to the ground, quite a bit, falling $2-$3 in recent weeks. However, they are actually up quite a bit, since the start of the year, but they also have a much higher yield, after they announced a 13.79% dividend increase earlier. At a price of $43.03 and earnings per share expectations of $2.59, the price to earnings is 16.61. Therefore, they are in the middle of SBUX and DAL, as well as hold a spot on my dividend stock watch list.
Now, I currently have over $2,000 to deploy out into the market and I want it to be deployed in the best spot imaginable. However, I also know that I must take the emotion out of the decision, use the numbers as fact and invest based on the best decision at that time, with the best information I have at that same time. I currently have a position in 2 of the 3 companies above, with CSCO and DAL. However, my position with DAL is not as significant with only ~30 shares. I could double that position up and still have cash left over. CSCO already has almost $3.5K in my portfolio, based on market value, and DAL is less than half of that. Therefore, DAL would be the better option right now.
Dividend Stock Watch List Conclusion
Therefore, as it relates to my dividend stock watch list above, my order of operations, pending upcoming prices on these stocks, Delta, Starbucks and Cisco would be my order of preference. I’ll be highly targeting my favorite airline and I’ll follow it up with one of my favorite cups of ‘Joe’!
I would anticipate making a purchase within the next 5-8 business days/trading days. Reason for this, I am waiting for a brokerage transfer to go through, as that would cause less speed bumps along the way, given I have current ownership in DAL and CSCO. In addition, my trading cost may either be free, $3.95 or $4.95 – so not a drastic impact, when making this decision. Further, the other niece piece is the timing of the ex dividend dates. In order, from DAL, SBUX and CSCO, the ex dividend dates are August 10 (expectation), August 8 and July 5. Cisco, being at the bottom of my 3, the July 5th ex-dividend date is okay.
What would you pick out of my top 3 dividend stock picks above? Going more towards flying, food or technology? Are you staying away from any of them, pending new information? Any thoughts on my factors above? Thank you everyone for coming by and sharing your thoughts. As always, good luck and happy investing.
Lanny,
Be honest with me brother… did you hack my computer and steal my watch list? Kidding aside, these are some great companies and I love them at these levels.
Adding to SBUX today – DAL soon to follow, especially <50.
Take care!
Tall –
Hahaha, too funny! Also – when you dropped the word “brother” it made me think of Hulk Hogan, loving it.
Also – I think I may be in the same order of operations now, as you, with SBUX first, then DAL second… hmm…
-Lanny
Hey Lanny. Here are my thoughts on these stocks, two of which (SBUX and CSCO) I have also been watching:
I have owned Cisco for many years, and I’ve been very happy with their performance. I think they would be a very solid “buy and hold” investment, but the current valuation is a bit too rich for my tastes. I would wait for a better price.
Starbucks continues to flourish. They went public in 1992, right after I started practicing law. I remember scoffing back then that a company based on overpriced coffee would never make it. That was about 13,000% ago. ????♂️ The company has an established brand, excellent cash flow, and plenty of room to increase the dividend for years to come. The current price could be a very good entry point – the recent controversies have driven the stock price down.
In the airline sector I own LUV and am happy with that exposure for now. Airlines are a lot like financials to me – uneven performance over the years, and subject to externalities they can not control (regulations, competition, fuel prices, etc). But Delta’s current price offers lots of upside, and their management is very strong.
So for me the buy would be SBUX, with Delta coming in a close second. I would watch for a good price to add to your Cisco position. Excellent analysis as always Lanny!
FIREman –
I like the analysis. Further, CSCO is a much bigger position than Delta is in my portfolio, with me not having any SBUX (outside of my fiance, whom has them). THerefore, I would say – your order could be the order I decide to go. Time will tell and it can be sooner than you think! Appreciate the comment.
-Lanny
Based on current price i would SBUX,which is what i did on tuesday.
Desi –
Nice job stacking up on the SBUX! I may have pulled a trigger today on a company..
-Lanny
Lanny, I like having some of the mature tech companies in my DG portfolio for the growth and diversification they provide so I would go with Cisco. Mature tech is generating so much cash it’s crazy. I have owned Cisco for quite a few years. And was really happy with this years dividend increase. Tom
Tom –
CSCO is a very strong, great moat and experts in the industry, plus – they can acquire whatever they needed, just in case. Great div growth, great yield out of the 3, they are on the list : )
-Lanny
Lanny, you’ve identified 3 good companies. As you may know, I have SBUX and CSCO in my portfolio already. Not that keen into Delta, although I prefer to use them when I fly. I would recommend SBUX for no other reason than I am more familiar with that company since I’m addicted to their frappuccinos and get it virtually every day. Not the way to go about investing, but that’s the one I would choose first. Hey, you asked!
DP –
SBUX is amazing and I love coffee, aka I may have purchased them today, or… did I purchase someone else… hmm.. haha
-Lanny
Lanny,
Loving that SBUX deal right too. I am looking at them, TD, AFL, GLW, HSY, LEG, SJM, and UPS are all being watched very closely. Right now a few of those are sitting at 3% yields or above – so those are getting the most looks.
– Gremlin
Gremlin –
They are too damn good, not to pick up! I love UPS and wish I owned them, could be another on my radar. Loving it.
-Lanny
I just added SBUX on Monday small share count but every little purchase will add up over a while
Doug – you are damn right it does, it all adds up.
-Lanny
Hey Lanny – good list.
I also like having a few tech names on the list. SBUX is also still on my radar because of the recent decline the last few weeks. I’m close to making investment #2 toward my individual security holdings. The problem is I kept adding to T and Fundrise (not a problem really – just that I chose to deploy available capital elsewhere).
Thanks for the recap. – Mike
MBD –
I may have picked up a stock today… to be written about soon : ) And nice job with T, huge yield. Having nice success with FundRise?
-Lanny
Can’t wait to hear about your potential next pick-up!
And, yes! Fundrise is going well. Slowly adding to our holdings. – Mike
I own Alaska Airlines (ALK). DAL might tilt my portfolio towards airlines. Not a good place to be 🙂 I see two factors working against DAL 1) They fly outside the US, not sure how that will workout given the geopolitical situation 2) Rising oil prices. I use Alaska a lot more for my travel. CSCO looks exciting 🙂
Geek –
Thanks for bringing up ALK, I’ll have to look into them now. I wish I could use Alaska airlines more, they are great!
-Lanny
I think we’ll be seeing SBUX on many lists of our fellow DGI peers. It made my July potential buy list. I never really considered DAL before. I wonder if you looked at ALK in the space too. Thanks for sharing.
DivHut –
I agree. I have now started to look at ALK, not too bad – great budget airline company, Delta with a slightly higher/current yield. Hmm… love the options.
-Lanny
ahhh personally id stay away from airlines. they are to cylical and with higher gas prices that will hurt.
sbux is on everyones list and a goood buy.
i own cisco and it has done very well for me. look forward to seeing what you decide.
cheers
PCI –
Respect your decision there my man!
I do love SBUX… ah… the coffee..
You’ll see an article, very soon!
-Lanny
Nice names, SBUX offers some great value now. CSCO is an awesome company but for me personally they’ll have to come down a bit further. But you can never go wrong with these names!
DI
Dutch –
SBUX is a great company, and actually – just was with someone who came over and had a nice starbucks coffee in their hand. I think they bring/brought a culture to US, that we didn’t have before. Love it.
-Lanny
Good list. It seems like the market still wants Starbucks to be a growth company and is ignoring the value and dividend growth. I sold my shares around $59 but below $50, seems like a great value to buy back in.
I started buying Dominion Energy on July 1, it has come up a bit but still looks like a great value to me.
Hey Lanny
Interesting list with solid businesses. I definitively have an eye on Starbucks too. Consumer staples are my favorite and some businesses are looking increasingly exciting. I’ve some exposure in the coffee sector in my portfolio owning stocks of Nestlé, JM Smucker and to some extent through PepsiCo, Coca Cola and Unilever.
I love investing in coffee, chocolate, beer, soft drinks. There are also some interesting small companies in these sectors like British soft dring makers Britvic, Nichols or Italian Massimo Zanetti Beverage Group (with its iconic Segafredo coffee brand) etc. I think stocks of these smaller companies might be worth a look.
Cheers