Weather is heating up and it’s time to put on the spectacles for the dividend stock watch list. I feel like I have been on the side lines for such a long time, not having purchased a stock in weeks. Over Memorial Day Weekend, I was able to take time aside and really focus on the quality of stocks that are out there. As others know, I came to find out that there are many opportunities out there for us and it is such a hard decision when it comes to which one to add, to the dividend portfolio. Bert comes out with his expected dividend increase articles, others are buying stocks on the daily, it seems, and you know what, it’s time for me to see what sights I should be set on. Without further-ado, here are my dividend stocks I am watching for June!
Dividend stock watch list
Johnson & Johnson (JNJ): As of May 25th, the ending stock price is $121.47. Analysts are expecting $8.13 in earnings per share this year, representing a 14.94 price to earnings (P/E) ratio. JNJ has suffered a decline of 12% year-to-date (YTD) to their share price. Guess what? They are on our top 5 foundation dividend stock list, having increased their dividend for OVER 55 years. Further, in April, JNJ increased their dividend 7.14%, which was truly their historical growth rate, as us investors have been used to. I own just over 43 shares in my portfolio and it could never hurt to add more. They currently yield 2.96%, which is under my taxable yield in total of 3.27%. Seeing JNJ dip below $120 would cause the eyebrows to raise even more, as their yield will start to show at over 3%. Sadly, the ex-dividend date was at 5/25, so the next dividend won’t arrive until September, if any immediate purchase is made.
Pfizer (PFE): Another position that I own and another pharmaceutical. I have 96 shares in my possession and they are becoming quite a dividend stock for a portfolio, as they are on the verge of 8 years in a row of dividend increases. They currently are trading at $35.68 with a yield of 3.81%, well over my yield on the total portfolio. Analysts are expecting $2.95, therefore, the p/e ratio is a dismal 12.09, very undervalued here. Their dividend growth rate is usually at the 7% mark, give or take a few basis points. Traditionally, it’s been a 2 cent per year increase to the quarterly dividend, and if they do that again, it would be a 6% dividend increase. I’d like to see them in the $34 range.
Delta Airlines (DAL): This damn airline was looking SO nice about a week ago and then they had to have their stock price go from $52.95, on May 18th, to $55.87, May 25th. That’s a solid 5.5% jump since then, but I am still hopefully that there can be a drop sometime soon. With analysts expectations of $6.13, the stock’s P/E ratio is only 9.11 and they are yielding just 2.18%. However, the the yield is low, that dividend growth rate MORE than makes up for it. In fact, I did a thorough analysis of DAL earlier, and they can continue to churn out 50% growth rates to the dividend for a while to come. I’ll have to be stubborn again and would like to see them in the $50-$52 range. Come on Delta!!
PepsiCo (PEP): Yes, Bert purchased Pepsi this past month and I even picked up more shares, as it was the first time I bought them since my first trade 7 years ago! This stock is hard not to keep on your radar. They are now trading at $100.31, yielding 3.70% (which is above their 5-year dividend yield average of 2.80%) and well above my total yield portfolio as well. Pepsi is in that illustrious group of the dividend aristocrats, having increased their dividend for over 46 years straight and they show no signs of slowing that streak down, at least not in this lifetime. Further, their product array always is distorted, as investors and individuals seem to forget that they own Frito-lay as well, giving them the extensive snack line that holds their beverage products together. Analysts expect $5.70 per year, which equates to a 17.60 p/e ratio. Having bought them a couple bucks cheaper a few weeks ago, I would like them back in that $96-$98 range and will be patient for that.
dividend stock watch list conclusion
Big decisions here. As these are all amazing stocks to have in your portfolio. Given that interest rates are rising right now, I may place Delta (DAL) on the bottom of the list, until the yield creeps up just a little bit more. I know we are out of earnings season, for the most part, and it may be time for other events to break out.
I love me some JNJ and PFE, always, especially because they are pharmaceutical behemoths. Further, I always wished my position in either of the two were larger than where it currently is. However, I can’t leave my boys at PepsiCo (PEP) behind, my position is bigger with my last purchase, but it isn’t big enough!
What are you seeing this June? I have seen quite a few names, and am curious if you are more preferred in other areas. Areas such as Gilead Sciences (GILD), Iron Mountain (IRM), the list can go on. I would love your feedback and comments, please share them below. As always, appreciate the stop by, best of luck and happy investing!
-Lanny
Lanny,
I’ve been eyeing a few of these JNJ and PEP. These names have continued to reward shareholders for decades.
I feel like your love for PFE is like mine for ABBV.
Airlines still kind of scare me so for now I’ve been staying away.
I’ve been buying some shares of PM and MO on the way down. PM seems to be really low right now. Almost a 5.5% yield and maybe a dividend increase coming up in September??
I even initiated a position in CM the other day after the Italy freak out to give myself some financial exposure. Hopefully, I’ll have a write up on this soon.
Take Care
-MH
MH –
I couldn’t agree more on the PEP and JNJ comment. Just incredible legacy companies. Hilarious on the PFE and ABBV similarities.
PM’s dividend growth rate has been frustrating, as of late, because of how low it’s been. I would love to see a breakout from them. I do like MO better than PM, even though I own PM and not MO… haha.
Congrats on CM – I’ve owned them for quite some time and could not complain one bit, they’ve been great, with consistent div increases along the way. Enjoy them and write it up!
-Lanny
Funny enough that apart from all the large names in your list I’m also looking at IRM! I believe their business pretty unique and combining their physical storage with virtual storage gives them a large moat.
On my blog I’ve had a interesting discussion with Mr. ATM on IRM as well.
Curious as to your thoughts on IRM?
Robot –
Iron Mountain is awesome. Their business is smart, is relevant and def. necessary going forward. I’ll have to check out your article, then. I like IRM, and I had my eyes on them in the $31-$32 range and never pulled the trigger. What’s your price point?
-Lanny
No official price point actually, I just found out the company even existed but was immediately intrigued.Was researching and now price has gone up to $34. Maybe I’ll initiated anyway currently looking into it.
Hi Lanny,
PEP is definitely again on top of my watch list for June. I bought it a few times already in the previous months, but at these price levels I most likely buy some more. Also eyeing for more CLX, KMB in my SEP…
-StepsToFI
Steps –
Uh oh there we go, I love it. They are very good and that growth rate this year, is hard to compare to any one else’s. Honestly, you cannot fricken go wrong and that’s how awesome this is!!
-Lanny
Hi Lanny,
That is a great list! I’m watching CVS, PEP, and SIEGY. Already have an initial position in JNJ, which I picked up when it was under $100 back in 2016.
Looking forward to seeing how these look in June.
Dividend Niche
Adam –
CVS has been on the eye, as well, given their downtrend in stock price. The thing I have to keep in mind is when they’ll reinstate dividend growth, as they already said they won’t do it until after the acquisition of Aetna is over. You know? Need some growth with that 3% yield.
-Lanny
Nice stock picks, don’t know to much about Delta myself but JNJ would be one of my top picks too this month!
DI
Dutch –
If JNJ drops below or at $119, going to be hard not to pull the trigger for me. Keep those eyes peeled this month!
-Lanny
Nice watch list Lanny. I have PEP and PFE already in the bag with JNJ hot on my watch list. T is the other stock I am watching very carefully this month. Thanks for sharing! 🙂
MDD –
JNJ seems very hot to the touch! I did pick up shares of AT&T for my older brother, when I took over his roll-over account. I hope he enjoys the > 6% yield!!! So crazy.
-Lanny
Love all these ideas Lanny – although I can’t bring myself to ever buy into an airline business. Our big Australian airline Qantas has had an amazing run these past 5 years (after a terrible 10 years or so prior), but just not an industry I can get comfortable with – way too much intense competition and capital expenditure required. I’ll certainly be having a closer look at the other three on your list…
Cheers, Gary
Gary –
Thanks for the comment. Airline industry has received SO much headlines, too, as of late – with emergency landings, blow-ups, almost-near-crashes; it’s been VERY interesting. The emergency landings have been the most constant news piece, which I wonder how much now is revering to being extra careful, now. It def. is capital intensive, no doubt. Appreciate the comment, as always, Gary!
-Lanny
nice list you got there.
all great companies. jnj would be my go to at the moment.
cheers
PCI –
Nice and I would love to see JNJ squeak and stay over that 3% yield threshold. I know I’m annoying and stubborn!! Just a little drop in price would be nice. We’ll see what happens come Monday.
-Lanny
That’s a nice list!
I’d love to buy more PEP stocks. My position in this wonderful company is stil small. JNJ is on my wishlist for quite some years now. KHC is also looking very attractive at this price level.
I already own a nice position in Delta, but would certainly buy me more in the price range as you mentioned.
If prices of REIT stocks would decline 10% I could also add to my positions of SKT and O. Man, are we spoilt these days? ☺️
Glenn –
Appreciate the comment. I do like KHC and wrote a seeking alpha article on them, as well. Man… Glenn you are hitting all of the stocks that I want more of – Delta, JNJ, PEP and O… come on market, just drop, for just a little? hahah! Loving it.
-Lanny
Lanny, Like PEP below $100 and JNJ below $120. Have not looked at PFE in a while, but do hold a position. Never have invested in airlines. On the surface, a bit capital intensive and economically sensitive for my taste, but I will admit to never having really analyzed the industry or the stock in detail. Tom
Tom –
I could not agree more on your price points on PEP and JNJ. I want JNJ more than PEP, simply because I just made a purchase into PEP, but if they drop in that $96-$98 range… well, it would be hard not to.
-Lanny
Hi Lanny, thanks for posting these lists as it definitely gives some exposure to the companies we never hear about here in UK, such as Delta. I personally have a steady position in JNJ and KO (It just tastes better 🙂 ).
Would be interesting to see what company you’ll pick in the end.
Freedom
Freedom –
The comment on KO is too funny! I wish Delta would dip towards the $50… but they keep rising and I want to see JNJ over that 3% yield, so bad. I did end up making a purchase… question is… who? Haha, you’ll see soon!
-Lanny
An excellent list, Lanny. I like JNJ and PEP from your group the most, but I could be biased since I own these two :-). Since I recently added to PEP, JNJ is the one I might be inclined to add to. MMM is one I’m watching and would like to initiate a position in, but I will need the price to come down more. Take care.
Engineering –
OKay to be biased, no rules against that here : )
THe market is INSANE as of late; every day there are different stocks popping up and then down. Let’s just say – it sways you one way versus the other. Craziness.
-Lanny
Nice list of names, Lanny. These are also on my watch list for our 2nd potential individual name.
Also, congrats on the Seeking Alpha article – I actually came across the post there before seeing it here today.
Thanks again! – Mke
Mike –
Nice! Pumped that you are watching some great stocks. With Seeking Alpha, it’s always funny seeing when articles of ours receive their crawl and get pulled. As long as individuals can read what we are seeing, that’s all that matters and pumped you came across both avenues : )
-Lanny
Hi Lanny,
I like your thoughts on these portfolio staples.
I have yet to add PFE and JNJ to my portfolio, though. Got to say it’s funny to see you mention IRM right before you wrapped up the post. I pulled the trigger on IRM last week 😀
Regards,
– LD
LD –
Nice job with the IRM purchase! I wish JNJ would have gone down… not up. I had to pick up PG shares instead!!
-Lanny
Hi Lanny,
Thanks for a nice list. I purchased some PFE last week but would love to have all of the companies that you mentioned. Those are names that will stay in the business for a long time, so I don’t think that you would make a mistake by purchasing any one of them. Perhaps the DAL would be on the bottom of my list as well, though, as it may be at the top of the business cycle at the moment 🙂
BI
BI –
Nice job with PFE, such a strong pharm company. I wish DAL came in around $50-$52, so I can add more to the position. Agh!!
-Lanny
Great list Lanny.
Good picks.
For myself I am looking at : Pep – JNJ – IBM – LEG – T.
Lets see If I can pick up some of these big names
Regards
WIllem
Willem –
NICE list, I would move up LEG in front of IBM, but that’s just me : ) Also, T’s yield is looking real nice!
-Lanny
Whew, I like this list Lanny. There are some good ones on here. I actually have a position in PFE, and am watching PEP, JNJ and DAL. I also would love to own some KMB. They have had a nice increasing dividend over the years. I have seen some above me talking about T, which is a stock I love. I also have a small position in CTL, which pays outrageous dividends for a $17 stock. It is definitely on my riskier side, but is nice as a small investment returns some nice dividends. Maybe if possible, I would like to see your opinions on CTL, but for me, it has been a nice little bump in my forward dividends. Until next time, keep pushing towards FI.
Jake
Lanny,
I like the list. I have PEP and JNJ on my shortlist as well and would like to pick up some shares of JNJ if it were to drop just a bit more. PEP looks good in the low to mid $90s. I have a very small position in PFE and would love to build it but have been busy allocating capital in the consumer staple space. Lastly, the DAL valuation metrics you’ve referenced seem very attractive. I’ve seen some headlines in the finance realm regarding the rise in oil causing some heartburn among the regional carriers and perhaps even the large ones like DAL so perhaps this is the reason for the seemingly cheap price to earnings multiples; I wouldn’t be surprised if you see the valuation bounce back and forth and retreat a bit your price point sooner than later.
PIV
I would like Pfizer and PepsiCo a lot more if they weren’t carrying so much leverage on their balance sheets.
And as I think you already know, LUV is my airline of choice both in terms of travel and stock investment.
It’s been very rare over the last few years for JNJ to breach much higher than a 3% yield. I took a big position last month at $122 for better or for worse. We’ll see what happens.
All in all I’d say this is a pretty darn good watch list. Thanks for putting it out there, and keep up the good work.
I wish I had invested in Delta a few years ago. Despite living near a major Delta hub (Minneapolis), I would be a little leery investing in Delta at this point. With gas prices rising, I’m a little worry about near term stock performance. I’ve heard that some airline companies have begun raising prices to make up for the increased fuel costs. I wonder how much price increase consumers can tolerate before deciding on using a cheaper competitor or forgoing flying altogether.
JNJ is one that I’d be happy putting money into at nearly any price.
Scott