Lanny’s March Dividend Stock Watch List

Time to warm up the month of March with my dividend stock watch list!  As everyone is drinking their Green Beer today, for good old Saint Patrick’s Day, I am in my upstairs room, researching and cranking out this article.  Why?  Well, busy season is winding down and I have never been more motivated to invest into dividend stocks, in order to keep stepping forward on the journal of financial freedom.  Please, go grab that hot cup of coffee and sit back to read my dividend stock watch list for the month of March!

Dividend stock watch list

Since I really am anxious to share the three dividend stocks on my watch list, I’m going to jump right on into them.  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 March 16th and will be based on the most recently financial data released.  Enough of boring you – check the three below!

1.) Dominion (D)  – Talk about another free fall they are on.  I purchased them two weeks or so ago at $73.2929 and they finished for the weekend at $70.61.  That is a steep 3.66% drop.  They now yield 4.73% and that is looking more enticing.  A very large dividend player in the utility space, which has been beaten down in 2018, but you have to love the fact that people use them each and every day.  Further, they are continuing to grow their reach in the country and I don’t see them going anywhere.  I am looking forward to owning more of my natural gas supplier!  Especially because this winter has been utterly cold, agh!

2.) Procter & Gamble (PG) – Another Ohio based player here!  The last time I purchased them, they were in the low $80’s.  They now trade at $78.97, yielding 3.49% (lovely) and I believe their dividend growth rate is being “corrected”.  What do I mean by that?  Their dividend increase was 3% in 2017, not great but this did get better from the prior period.  I expect that their dividend growth will be at least that, if not into the 5% territory, which was where Johnson & Johnson (JNJ) were at in 2017.  Earnings are expected to be $4.21 for 2018, based on 23 analyst estimates.  This equates to a price to earnings ratio of 18.76, which is not bad for them and is actually less than the overall market.  As we all know, they are a foundation stock for any dividend portfolio and they wear their Dividend Aristocrat emblem on the sleeve.  Their products are incredible for every family and you can surely bet each person has something in their cupboard or bathroom cupboard from PG.

3.) Aqua America (WTR) – They are back on the list baby!  Back on my January dividend stock watch list, they were trading over $35 per share.  Going into this St. Patty’s day weekend, they are are at $33.91.  Using the 2018 estimate of $1.44, this equates to a price to earnings ratio of 23.5.  This is high, yes, but it’s damn near difficult to pick up a water utility at a discount.  Year-to-date they are down 13.56% and are now yielding 2.41%.  The dividend growth is typically in that 7% range, which is a sweet spot for where they are yielding.  If you thought that the utilities stop at gas, electricity – think again, as water is more critical than all of the above.

I love all three companies above and do own Dominion & PG.  Aqua is the most expensive, but you can bet some money they will have a consistent dividend growth rate.  Dividend stock investing isn’t supposed to be that easy, but have to love the options here.  I obviously want to make every dollar count on using my capital, this is a big decision.

Dividend Stock Watch List Conclusion

I love these 3 dividend stock options above.  I am actually not sure which one to purchase right now.  This is very difficult.  Three dividend stock potentials above, all that have long-term dividend growth rates, as even Aqua America (WTR) has almost 20 years of consecutive dividend increases, barring this year.   They even have a longer track record than Dominion (D), but obviously can’t touch Procter (PG)!

What dividend stock do you like?  What is your favorite above?  Do you go with the utility company or do you go to the consumer staple?  Decisions, decisions.  This is what dividend income investing is all about.  Would love to hear your feedback, questions and comments!  Thank you for stopping by, appreciate the love as always and talk soon!

Lanny

 

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29 thoughts on “Lanny’s March Dividend Stock Watch List

  1. Nice list guys. I’m going to write my watchlist pretty soon, but Dominion is my second pick right behind Enbrigde. Then I think Welltower is showing lot’s of value trading at 5-year low, and KMB is also very attractive. I also think HRL is a great place to add money now that they still sturgle with short-term supply and demand on the turkey pipeline. HRL is one of the few companies that didn’t get the share price boost as a result of tax reduction. Just finnished reading the transcript, and CFO clearly states that they are very positively affected.

    • Stockles –

      Thanks for the comment. Enbridge and Hormel have been some big names thrown around recently. This is very interesting. I wish SO bad we had deeper pockets over here to invest, agh, so many big dividend names here!!

      -Lanny

    • PCI –

      Love the perspective you have, as it’s a “hey – if I had capital this is where I’d put it” Type of statement. This is tough!! I’d like to have something in the pipe this week.

      -Lanny

  2. Nice buys, I would hold off on D for the 5% yield which will be available soon enough.

    I have the following on my list:
    PFG
    DIS (15x earnings!!!)
    UPS
    QCOM
    D
    KHC

    Good luck to everyone 🍀, i hope you all have plenty of dry powder as lots of value all around!

  3. I would go for PG and actualy did 🙂 Thinking of doing again since the price went bellow 80$ and keeps thete. D i dont like due to their very high leverage. NetDebt/EBITDA is over 8. Come on this is lots even for utility. This is why you have high yield. It made on debts. WTR look more or less fine from balance perspective, but as utility it looks overvalued with P/E >20 and div yield <3%. There are lots of utilities with above of these two figures. Utility is a borring low growth sector so you should not overpay for it 😉

    • 2035 –

      Love the straight forwardness in the comment. Do love PG and dammit – can’t water just squeak down a little lower on the valuation standpoint? Agh, don’t think I’ve ever seen one in the teens for price to earnings in quite a long time. Appreciate the comment.

      -Lanny

  4. I think D has a compelling combination of current yield and growth. I added to my position on Friday. I have also owned PG for a long time. I have always struggled and have rarely owned water stocks for some of the reasons you mention: high valuation and low yields. Tom

  5. The only one on your list I used to own is PG. I actually sold them a while ago, which was good because now they are like 15% cheaper so I might just buy them right back 🙂

    Martin

    • Wombat –

      Very good and hopefully, if you conclude they are undervalued, then you pounce on them! The dividend life can be a fun one and the learning that happens along the way is amazing.

      -Lanny

  6. I just added to my PG position last week and I’ll be adding more towards my D next paycheck I get. I’m really loving D at these levels and I want to double my current position. Great watch list, I hope you make some good buys.

    • Diligent –

      Nice job! Wow, you are killing it over there, and you are stacking on current positions of undervalued companies that have paid an increasing dividend for a long time. The math is very easy once that’s buttoned down : )

      -Lanny

  7. D and PG are two names that are looking attractive to me as well. Not sure is you ever looked at PPL as another potential utility play. No question we have many choices these days with names like GIS, every REIT, utilities and even names like PEP or KMB coming into the mix as good buys for the long haul. I know PG doesn’t have many fans these days but that’s why I like them. Bottom line, I think D and PG could be good plays.

    • Hut –

      Don’t you love them? Also.. GIS was looking really enticing today. D dropped quite a bit this morning and I just may have bought more…

      You love dividend investing and love that you are into it as much as we are. LETS GO HUT COME ON!!!!

      -Lanny

  8. Lanny,
    3 good choices. There are a lot of great options right now. Those 3 on my list, plus the Canadian Banks, GIS, LEG, SON, UPS, and KMB to name a few. The Market is bending itself in many weird directions; driving by politics, larger economic trends, interest rates, technology, and other issues. I see this creating opportunities for people like us who are in it for the long term, and not so hamstrung by the need to make a mint daily.
    – Gremlin

    • Gremlin –

      Are things really going on sale? I feel like it’s been certain industries – Utilities, REITs, some consumer staples. It’s been a toss up. However, we need to know our price points, valuations and strategies, turn off the noise and “ACT” on what we need to do. LETS GO!

      -Lanny

  9. Good choices! I just picked up some more D on Thursday. Missed the mark though as they went even lower afterward. But still a good long term hold. PG is on my list as well for a new position. We will see when more free cash opens up.

    • Daze –

      Make any moves today? I hear ya on having more cash, gosh – it’s okay, though. You own a company that’s been around for a long time with a consistent dividend streak and metrics that show they can continue that streak. Be happy with making an action, be aggressive on finding more cash and let’s stay after it.

      -Lanny

  10. Lanny,

    Dominion is starting to look good to me, especially if it hits the 5% yield range. In addition, I like PG (<$80), KMB (<$111), KHC (<$62), IBM (<$160), KIM (<$15), VTR (<$52), WPC (<$60), NGG (<$54), DIS (<$100), SO (<$44), and XOM (<$75) just to name a few ;).

    I would be inclined to include GIS at it recent price of $50, but I can't say I am convinced that GIS made a smart decision to pay ~$8.0B for a company who's recent annuals earnings were ~$0.25B (will recent sales growth continue?). I fear the principle of institutional imperative was at work there in that decision process.

    If I recall correctly, DIS faces some share dilution due to the impending acquisition of FOXA assets that has likely weighed on what otherwise would be a very attractive share price.

    Also, looks like the market is expecting the Fed to raise rates this week and perhaps even signal it will increase rates 4 times this year rather than the previously provided guidance of 3 times in 2018. As far as I am concerned, this is all short-term noise and many of the REITs and Utilities seem appropriately priced in regards to these expectations. Should be an interesting week.

    Regards,

    PIV

    • PIV –

      Interest rates are going to continue to rise, no doubt about it. What’s funny, though, is you hope that the utilities and REITs were in as long and as fixed as possible with their debt loads. However, they are smart people, right, making decisions about the financial stability of the company; or… at least they should be.

      You are right about Disney, however, I thought they were going to do a massive buyback to note dilute the shares, as much, right? Maybe they aren’t anymore? However, seeing them at a solid/to low $90’s would be preferred right now. Thoughts?

      Thanks for the comment!

      -Lanny

      • Lanny,

        Yes, there is a $10B share buyback that intended to offset about a 1/5th of the purchase price. The $52B valuation placed on the FOXA assets to be acquired is about 1/3rd of DIS current market CAP (press release states the ~515 million shares to be issued represent a “25% stake in Disney on a pro forma basis”). I agree, low $90s would be even better to add to DIS.

        PIV

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