Okay, so if Bert wants to roll out an article on his stocks that he’s watching, then I am going to have to waive my hands in there and say, “Hey – I am looking at stocks too”! Therefore, I will present my stocks that have been under my keen eye for the last few weeks, especially post-the-election. Come and check out the dividend stocks on my watch list!
The Watch List stocks
I know we are all slowly coming off the roller-coaster we had post-election, but now that some of the dust is settling, which opportunities am I seeing? I will use the metrics from our Dividend Diplomat Stock Screener to find out the bad boys I’m checking out! Line up the stocks and let’s see what’s caught my eye for the watch list this November!
1.) Unilever (UL) – This for sure has been a hot stock in the market place. However, the brand listing is what stuck out to me and why it is on the watch list. The brands are Dove (yes, we literally just went to Target (TGT) and used quite a few coupons and other sources to grab a few amazing deals on their shampoo, body wash and body bars + deodorant), Magnum Ice cream, Lipton tea, and I think my relatives still use Axe deodorant; you cannot go wrong here. This is a picture perfect consumer stock for the household. Bert had also included this company on his watch list and from also talking with the Lady – she is really interested in this stock too. Well, that makes three of us, because after their drop of $10/share from their 52 week high, the stock is very enticing. The yield is at approximately 3.60% and Bert has the other details without boring you with them again. I also do not own them, as of right now.
2.) AT&T (T) – Yes, it’s back baby! Mr. “Re-thinking possible” has been thinking of monopolizing the entire industry with their Time Warner (TWC) offer. We’ll see how the approvals go for this, however, the stock has taken quite a few dollar hits lately. The quick metrics are a dividend yield of 5.22%, forward P/E of about 13.13, payout ratio under 70% (where they typically are) and they had another dividend increase of a whopper 2%. (also very consistent). This is a top 5 recommended foundation dividend stocks for your portfolio. Though they already take up a dash over 6% of my forward income, I could add a little bit more. However, I’d like them in the lower $36 to upper $35 range to really consider making a move. Sorry Bert, you took Verizon (VZ), and I’m swinging with AT&T (T) for my watch list pick.
3.) The J.M. Smucker Company (SJM) – This damn stock has always been hard to gauge the price on where the value may be. Let’s just say – their 52 week high was at $157.31 and they are now trading at $124.85 or a solid 20.63% drop from there, which was just a few months ago – sounds very similar to Unilever (UL). Damn. Haha. With their forward earnings projected to be $7.69 rom 16 analysts, this makes the forward P/E a solid 16.23. Not bad at all for these guys. Their yield is at 2.40% with $3.00 per year coming to shareholders. The payout ratio is well under the threshold of 60% and is around the sweet-spot of 40%. They have over 6 years now of dividend growth and their most recent was a whopper at 12%! I love it. Also – let’s talk about their brands – Smuckers Jelly, Jif peanutbutter, Folgers coffee, Dunkin Donuts (DD) in-store coffee, the list can go on. I use these products quite a bit and love that my bias comes in, as they are an Ohio-based company! Would love to add a nice consumer staple that’s in my cupboards, into my portfolio.
Watch List Summary & Conclusion
To summarize, $1,000 invested in each of those companies, in order, would provide $36, $52 and $24 in forward income, respectively. I only own one of the companies listed above and wouldn’t mind to own more of a product that is used quite regularly. The growth rate of the dividend is also in order from lowest yield to highest; with Smuckers (SJM) at the highest and AT&T (T) at the lowest, which would be expected. I love the drop in both Smuckers and Unilever, but I believe it comes down to – which brand/company gets me more excited? I may be leaning towards Unilever (UL) at this point in time.
What are you seeing in the market? Are there other stocks that are floating beneath the radar? What are those hidden gems? Have you made purchases recently? Definitely let us know, pumped to hear your thoughts and what you are seeing out there! As always, thank you for stopping by, talk soon and happy investing!
-Lanny
Some great picks for the watch-list. Personally, I picked up some UL in the past week and may add some more very soon. While the market is through the roof, some opportunities remain to take advantage of, with UL being high on that list. I’ve been wanting to add T forever to my portfolio but was adding to VZ first. Also, one that I’ve been following closely is ABBV, as it’s a sector I need to add to diversify my portfolio and looks decently valued.
Agent D –
Nice pick up – you must be already feeling some appreciation!
I have seen more and more Verizon (VZ) being added to watch lists and on purchases. ABBV has also had some activity.
Keep us posted, always a time to find a diamond in the rough! Congrats on your UL.
-Lanny
Yeah for Unilever! haha
Love the company as well and bought some share only recently. And it’s Dutch, so always a plus for me 🙂
Haven’t heard of Smuckers before though, sounds very interesting as well. Probably more US oriented?
Curious what the next buy will be. And thanks for the nice list!
Divnomics –
Congrats to you too, another all over UL!
Smuckers makes our favorite Jelly brand and Peanutbutter. They also have ownership of Folgers coffee and the shelf/in-store Dunkin Donuts coffee. Quite a great company and they have strong consumer staples that most US families have in their cupboard. Do you have a favorite spread on a sandwich or bread?
-Lanny
Love reading your articles! Can I ask why ATT? I’m just starting my dividend journey but it seems like they only pay dividends and have virtually no stock appreciation, is that a factor you consider? Thanks guys!
Allen –
No real consideration – as it means more their P/E multiple, their payout and their yield. At 5%+ and a dividend aristocrat – always a solid purchase, especially in an industry that has: Internet, Phones, Cable and other one-off items. They are the big guy and if you use their service, why not? Not real keen on price movement, more on P/E multiples, does that make sense? Any other questions I could help you out with?
-Lanny
Thanks for the response! I’ve been learninging a lot from your guys’ blog! Yes the yield and stability of T are top tier, the tough thing to balance for me is yield and dividend growth because it often seems like you can only get one or the other.
To jump on the consumer staples train, I’ve been looking recently at Fidelity’s consumer staples ETF, FSTA.
What do you think about ETF’s? I like them because I can trade many of them commission-free, which is a huge deal when your buying in relatively small quantities, as I do.
FSTA is down about 3% since the election and the expense ratio is tiny and it yields a respectable 2.4%. I’ve been thinking about this as a diversification and dividend play in case this recent rally reverses.
What do you think?
Thank you!
DivNewbie
AT&T just made it onto my watch list for the first time. You mention many of the reasons I like it. The only thing stopping me from buying it tomorrow is a 19,000 DOW. Scary
Divi –
Definitely freaking scary! JNJ came down quite a bit, as well, UL is hanging in there tight – an up day and a down day, almost at my price points, but not quite. It’ll be nice to have a day off from the market, to recover from the rollercoaster ride!
-Lanny
I like BUD quite a bit right now near 52-week lows. The main downside is that U.S. investors are taxed on dividends by Belgium and by the U.S., but I still like the name because of the company’s dividend growth rate, dominance of the beer market, defensive nature, and potential cost savings once SABMiller is fully integrated. I think the price has gone down based more on fear of any emerging market exposure rather than on real threats to the company’s business. I own BUD through Loyal3 (no trading fees) so I have been adding a little bit to my position every day.
I agree that T is worth watching/buying right now, but will not be adding there since it is already my 2nd largest position.
Brian –
Have to like BUD’s market hold in the US, that’s for sure. Never a bad business to invest in – I own Diageo (DEO) and it has a wide variety of alcoholic beverages, should check them out.
Yes… sadly T has had some price increases lately, but it’s okay. And yes – it’s also one of my larger holdings as well, I’m there with you! Happy Thanksgiving and thanks for sharing your comment.
-Lanny
It seemed to me all of them are great long term holds with huge moats. Buffett style works like a charm.
BSR –
Buffet-style never hurts ; ) Great div yielders, great track record and yes – staples in most households! Not a bad business to invest in, at all.
-Lanny
I bought more T last month, and UL is on the top of my watchlist. I’m greedy I guess; still waiting for it to drop a few more dollars. Thanks for sharing your list.
IH –
Nice pick up, hands down, great yield. Don’t worry – patience holds some weight : ) Happy Thanksgiving and thanks for your comment!
-Lanny
Hi Lanny,
I like the diversity in your selection. I like T over VZ but I also like PG over UL for the long-term. They’re all stable companies though and good for consideration.
Best wishes,
– DL
I bought AT&T, then sold while I was raising money for the rental, but I’ve added back some since then. Whenever the interest rate to increase, I expect AT&T to fall some more, as utilities will be hurt buy the increased interest rate, but the Donald’s effect has been making the stock to go up, along with Thanksgiving euphoria.
The dollars has gone up, which traditionally would drive down the cost, but companies like Apple, MSFT get one-time tax cut to bring the money home, which they would use to buyback stocks.
– This in couple with companies are looking to make products here in the US so, on the surface, American middle class will get rebuilt, so more money going around. So, optimism is at the all time high right now.
The Brexit threat seems to ease also, as the memo or some hacking shows that the current administration has no working action to make the plan to move forward with trading negotiation among the Euro nation.
No one has to worry about Trump’s TPP policy. We’d buy excellent made-in-america via amazon.com from Japan – no matter how the negotiation ends.
Basically, all we have to do is to respect the WTO’s MFN standard, first and foremost. In that sence, Trump is totally right – we don’t need TPP at all.
God bless you and the US!!!