Lanny’s July Dividend Stock Watch List

It’s hot, no doubt.  The Cleveland Indians are on a roll this month and we are heading into the All Star Break soon.  Further, we went through a drop on our rollercoaster stock market ride and are riding the hill back up in June!  Similar to what they say as you hop in for the ride, you better buckle up!  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 went up 6% from May 31st through June 26th!  How fast the tables can turn.  Last month of May, we were watching the stock market drop, showing incredible opportunities.  June was the complete opposite.  The surge down was just as fast as the surge up.  Why did this occur?  Well, further trade talks and tweets continued from our President, popping the markets up.  Secondly, the Fed announced a freeze to the fed funds rate.  There is (close to) an 85%-100% probability of a rate cut in July.  This can mean serious headwinds for your investment portfolio AND your Mortgage.

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

Delta Airlines Inc (DAL)

Now, they do not have the most dividend growth history in the books.  However, their dividend increases have been MORE than stellar.  In addition, their payout ratio and growth rate, tied in with their current yield, is incredible.  They currently yield 2.50% with a payout ratio of 21% and a recent dividend growth rate of 15%.  The dividend growth rate is preceded by a plethora of 50% dividend increases, so let’s stay conservative with 15%.

In addition, they did not mess with the Boeing Max 737 Jets.  Their customers flown have been record setting, showing they are having a significant year, on all fronts.  I recently wrote an article on why they are the most well-positioned Airline and these metrics support the statement.  At current prices, their P/E is approximately 8.50.  Talk about undervalued.

See – Another Look At Delta: The Most Well-Positioned Airline

Kroeger Company (KR)

Here is the curveball baby!  I am talking about a big grocery store in Kroeger (KR).  It’s been years since I’ve purchased them and the one time this occurred, they were at $21.00 per share.  The recent price point is $21.43.  Therefore, no real price movement and there have been two dividend increases.  The recent increase was 12% and the year before this, was 4.2%.

The payout ratio is only 26%, which allows me to  believe that the dividend increases will continue for the foreseeable future.  In addition, they currently yield higher than Delta (DAL) above, at 2.61%.  Further, they have been expanding and becoming a “smarter” grocery store in the Northeast/Midwest region.  I would be interested at these levels, especially knowing that a dividend increase could be coming…TODAY.

See – The Power of the Dividend Growth Rate is Real

Leggett & Platt (LEG)

Finally, a dividend aristocrat and they were on my list last month.  They have been paying dividends for over 45+ years and are now yielding over 4.25%, based on price activity during June 26th.  Leggett & Platt (LEG) is in almost every bedding product and they also are in quite a bit of product for the automotive industry.  They’ve been through all economic cycles and one has to like that type of experience for a company.

The forward earnings expectations is $2.47 and their Price to Earnings is at 15.  They are rocking a 4.25% dividend yield and the recent dividend increase was at 5.26%.  However, I believe that dividend growth rate will be the same, if not less, for a few years.  The reason being, the payout ratio is over 60%, which we try to stay away from.

Sticking to my strategy from last month, I would be interested in them in the $35 range.  For a more full analysis, I wrote a piece on them on Seeking Alpha.

See – Leggett & Platt, Inc.: A Dividend Stock To Help You Sleep At Night

Dividend Stock Watch List Conclusion

I currently only own all 3, but these 3 are not sizable positions.  Delta would be the largest position, at barely over $3,000 in my portfolio.  I would be interested in all 3, to say the least.  Further, all companies above pass the Dividend Diplomat Stock Screener Metrics.  Therefore, what’s not to love?  The only “iffy” position is LEG’s payout ratio and that’s based on an forward estimate.

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 3 dividend companies above in Delta, Leggett & Platt, as well as Kroeger, 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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10 thoughts on “Lanny’s July Dividend Stock Watch List

  1. Nice looking list Lanny. I do not own any but used to own LEG before I started consolidating some positions a few years ago. I feel a pretty good market sell-off coming before the end of the year so I’m in no hurry to buy. But I am looking at some of the “unloved” in my portfolio that have already taken a beating and offer high income in exchange. ABBV, PM, IBM come to mind. Stay cool. The winter winds will blow before we know it. Remember the polar vortex? I didn’t go outside for a week! Tom

    • Tom –

      Loving the comment. Would LOVE a sell off. Please, bring that, haha. ABBV Definitely has been beat up and I need more on the debt plan with them.

      And yes – staying cool is key. Man oh man Tom, I’m still locked in on the downturn you are anticipating. Would love/welcome that.

      -Lanny

  2. KR granted you a nice 14% raise today. So congrats! That yield is up near 3% so I might have to take a look at them. I haven’t been a big fan of grocers but maybe KR can change my mind. Most things on my watch list are a bit too high for my liking so I’m likely to hold off for now especially since cash is somewhat limited. But a 5-10% pullback would get me ready to deploy some of that cash.

    • JC –

      I was LOVING the dividend announcement, no doubt, and LOVE the yield at 3%+. Definitely look at them, and I do understand the concern with grocers. Check them out and let me know what you think.

      Pumped to hear what you think and what you find out! Thanks JC.

      -Lanny

  3. Of the 3, LEG is the only name I have been following recently. I’ll have to take a look at KR and DAL. ABBV is certainly back on my radar following news of its acquisition of AGN, not to mention the overreaction from the market.

  4. Nice list, once again. I like to add to ABBV, CVS, DAL, IRM and LEG at these prices. Although I like to add DAL around $50. It has bounced back within a couple of days. So maybe just buying it below $55. JPM and WFC also look very attractive after the buyback and dividend plans presented yesterday.

    New positions I consider are AOS and LMT.

    Thanks for the list. 👍

    • Div Comp –

      Nice selection of 5 that you have. I would love to see DAL at $50 – I’d easily double my position if/when they do.

      You are all over the market and all are great dividend plays. Making moves!

      -Lanny

  5. Love the new Kroger dividend raise it was nice. Also ABBV has an aggressive plan to pay off its debt which is why I think it’s back on the rise I dont expect the big dividend growth for a few years but that’s ok it will return. If Kroger can continue with these .02 cent raise I’m happy with that for a few years.

    Have been looking at Leg but haven’t pulled the trigger yet.

    • Doug –

      No doubt the 14% raise was nice. As with ABBV, I don’t anticipate dividend growth, similar to CVS. However, maybe they will surprise us.

      LEG is an aristocrat and is a “boring” but “effective” move, you know?

      -Lanny

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