Lanny’s July Dividend Stock Watch List

Tough month for Clevelandars with our Finals loss to the Golden State Warriors in June.  It’s okay, another year to plan and strive for the trophy.  Our Cleveland Indians are playing some pretty damn good baseball and the perfect summer weather of low 70s and sun has started to peek through, as we recently had muggy/humid 80 degree weather.  Amazon (AMZ) has purchased Whole Foods Market (WFM) and stocks are showing a few signs or better signs of opportunities based on valuation metrics.  I wanted to share my July dividend stock watch list and to see if they happen to be on yours as well.  Now, onto the stocks!

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What’s the goal here?  To Just Go For It – dividend investing style, of course.  This month’s watch list shows quite a bit of promise and has changed a little from last month, but also nice to have three different industries within here.  Two companies are in my portfolio, but the other one is not.  Let’s take a look at the stocks (which are heavily vetted by our Dividend Diplomat Stock Screener) that are on my watch list!

AT&T (T): Okay, yes this was on my June dividend stock watch list, but guess what – they were at $38.79 at the date I wrote that article and as of June 25th – they are trading at $37.95 or a 2.17% drop.  Did anything really change?  No, no.  But – their yield has sweetened a little bit more to 5.16%, which is “lovely”.  AT&T, as we know, is a massive telecom player here in the states, is a dividend aristocrat by increasing dividends over 25+ years strong and also has the ability to buy the latest technology to stay ahead.  With the price to earnings (P/E) now at 13.04; there could be some potential value here.  It is worth to mention, however, with their over 5% dividend yield, this then has a built in low expectation of dividend growth – which has historically been around 2% each year and I don’t expect that to change.  However, I’d be okay with a surprise this year.

J.M. Smucker Company (SJM): A new name to the list this month and this came from a discussion with Bert, as the stock was hammered post Amazon’s (AMZN) announcement.  Year to date they are down 5.7%, and are down to $120.72 from their 52-week high of $157.31, or 23.26% down.  Based on expected earnings this year of $7.95, this equates to a price to earnings of 15.18 – definitely below the S&P 500 average of 25.79, by a long shot.  Further – who doesn’t live Jif peanut butter, Smucker’s jelly/jams and their other products?  Additionally, they are based in Ohio… no bias, right? haha.  Their yield is hovering around 2.49%, at the moment, with over 15 years (July – expect an increase) of dividend growth and their 5-year average yield is 2.20%; so getting a little more bang for your buck this time around.  Keep an eye out for this one, I know I am and that is why it’s on the watch list.  With a name like Smucker’s, it has to be good : )

Canadian Imperial (CM): Another familiar face, one which I have a 3.85% concentration in my individual taxable account portfolio.  However, with a current price to earnings of less than 10 at 9.94 based on forward expected earnings of $8.11; this stock had to make the watch list, especially with their yield approaching the 5% mark.  These metrics all are far below the S&P 500 average metrics.  Question is – currency power has negatively impacted their dividend to US investors, and the housing market in Toronto + the suburbs outside of Toronto is bubbling up at a fast as heck pace.  Will that last?  Will banks suffer at some point?  This hasn’t occurred yet, due to their regulations somewhat, but I cannot imagine how this can keep going.  I am keeping this big Canadian bank on my watch list for any sudden movements.

The watch list summary & conclusion

What do ya’ll think of the watch list stocks above?  I am sure many of you own these companies.  We have a few industries going on here – consumer-staple with SJM, telecom/technology with T and then banking with CM.  How do you feel about these three industries?  Are you seeing these industries as better plays with the uncertainty going forward in the economy?  I won’t be purchasing right away, but I need to remember to make every dollar count in this situation and press forward in the right way to reach my goals I have set for myself.  Any other stocks you are seeing?  Please share and talk soon!  Happy investing.

-Lanny

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27 thoughts on “Lanny’s July Dividend Stock Watch List

    • Divdude –

      Definitely need to keep that in mind. You have tomorrow & Wednesday to make that decision! I do, obviously, as well. If they continue to slide around $0.50-$1.00; I definitely will be at the edge of the seat.

      -Lanny

  1. Of all the stocks you mentioned, I’m actually only mainly familiar with T, which is already in my portfolio. I add to it every month. I think it’s a great stock for purchase, and absolutely liking the yield right now. Can’t wait to see what stock you decide to purchase next.

    • DP –

      That’s cool that you continual to add to a foundation stock every month. I love the reinvestment, too : ) When you are reinvesting at over 5% – the additional income that gets added is fun!

      -Lanny

  2. I’ve got CM on my list to add some more.as well. With the closing of the merger (PVTB) last week rumor is they’ll be trolling for US targets to flesh out their new US infrastructure. Like maybe banks in cities where PVTB had wealth management offices? Not sure if they’re like other Canadian companies (check your broker) – if so, buy in your IRA to avoid CAD withholding

    • Charlie –

      Yep, you’re hitting on a few targets there. Definitely don’t want to get hit with the withholding tax (which obviously you get back come tax time). I believe that the US markets are a way to spread location risk, and yes – if wealth management needs to be bolstered – not a bad way to do it – just buy it, haha.

      -Lanny

  3. I’m pretty heavily weighted towards food stocks (you have to eat, right?), so $SJM is on my watch list. I’m also partial to Northeast Ohio-based companies, because I want to support the area where I grew up.

    • Stefan –

      Aghhhh!!!! Really?? Damn public accounting, that absolutely sucks man, I’m sorry. Luckily, our accounting firm that we work for isn’t a big-4, so the SEC clients we have – are typically those that aren’t massive, so we get lucky on that front.

      -Lanny

  4. Not a bad list of companies to consider in July. CM has been on my watch list for a long, long time. With TD, BNS and RY I think I’m content, for now, with the Canadian banks in my portfolio but I’m still looking at CM and BMO too. SJM is one of those solid consumer staple plays that is not in my portfolio but could deserve a spot. Thanks for sharing some of your potential picks.

    • DH –

      Yep, you do have quite the Canadian bank punch. SJM is a stock that is so interesting, because in all my years I could never find the right price to swoop them up. They are finally getting back into the right target zone. We shall see!

      -Lanny

  5. Hi Lanny,

    that are some great stocks to have in the crosshairs for July. I really like AT&T after the price drop. They are no hidden gem, but sometimes it’s the plain and easy stuff that works. I added to my existing position a few days ago:
    https://dividendsolutions.wordpress.com/2017/06/29/recent-buy-neuer-kauf/

    Usually i don’t like banks that much, but the Canadians like Bank of Nova Scotia and some others are good, and i could kick myself that i missed buying BNS when they traded a lot lower…

    Keep it up!
    Cheers,
    DividendSolutions

    • DS –

      Nice work scooping up the easy ot understand stocks that produce cash flow and share most of that cash flow with their investors : )

      And yes – depending on your tolerance for banks that would helps sway you one way or another. I benefit from being an auditor in that industry, so analyzing figures/trends becomes a little easier for me. Their markets and activities are quite interesting, that’s for sure.

      -Lanny

  6. I agree that this is a good time to look at food companies. I just don’t think Amazon’s purchase of Whole Foods affects the big food companies very much. I’m thinking about adding to my position in McCormick now that it has dipped below $100.

    I own 100 shares of AT&T, but won’t be adding to that position until they start giving us more than a 1 cent per year raise. I would be wary of Canadian banks because of the questions you mentioned about the Toronto housing market. There are a lot of people with 12-month subprime loans that they renew every year, so I think even a single YOY decline in values could pop that bubble.

  7. Great list! I like $T a lot too – it was actually one of my recent buys. 5% dividend yield plus some pretty exciting growth plays with Time Warner, the Connected Car etc…And at a good price at the moment.

    • TI –

      Yep, I am curious if the government let’s this deal pass, though, as it would start shifting more towards that “monopoly” like feature. But I can see a way where it could pass, as there are still quite a few smaller players out there, as well. Nice job on your purchase and appreciate the comment. Love that I have enough income from AT&T that it does cover my internet bill more than full each month!

      -Lanny

  8. Hi DD,
    The stocks you mention seem very solid to me. None of them are on my watchlist but I think I might add AT&T since I have no telecom stock in my portfolio.
    At the moment I slowed down with buying stocks in order to rebuild my cashpile a bit.

    Cheers,
    Greedy dwarf

    • G-Dwarf –

      Excellent, if you don’t have telecom – they are not a bad one to look at, that’s for sure, especially if they end up buying Time Warner. They are a dividend aristocrat, with a higher yield (over 5%) and usually raise it about 2% each year. A foundation stock in my mind.

      Good luck building the cashpile and move when the time is right for YOU.

      -Lanny

  9. I really like SJM and might look into it closer if it keeps dropping. My girlfriend is a big fan of their peanut butter and won’t eat any other and I always like to look to her for investing ideas!

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