Lanny’s October Dividend Stock Watch List

Hop back on the roller coaster ride baby!  Let me tell you, this one is a screamer!  What goes up, must go down and what goes down, must go up!  That is exactly what the market has been doing.  Even though the market does it’s thing, we know we can’t predict or time the market, but we can do is analyze stocks to find the diamond out there.  There is always an undervalued dividend stock to be found and that is exactly what I do, each and every month – try to find the diamond in the rough.  Tune in for Lanny’s Dividend Stock Watch List – October Edition.

Dividend stock watch list

Here is what the market did in the last 30 days, from the screen shot below:

The market is up 5.6% from August 15th through September 15th.  How interesting is that?  Each 30 month period has been something different the last few months.  Last month’s watch list article, the 30 day review period had the market declining.  Now, the market is right back at it?  What changed?  A few tweets, of course.  (Amazing that with each message, the markets react instantly!)

See – Why I Don’t Time or Predict The Market

So interesting.  The markets are now back to firing on all cylinders.  Philip Morris (PM) and Altria (MO) are in discussions for a mega-merger and interest rates are… back up as it relates to mortgage loans?  Early September, there was a 90% plus probabiltiy for a rate cut of another 0.25%.  Now… that has been reduced to mid-upper 70% probability.  Let’s just say, the swings are real.  What you can do, though, is… SAVE YOUR MONEY.  Right now, it’s crucial to work on your expenses and use those savings for additional investments.  There are so many ways to save and we are here to help YOU!

See – 5 Ways to Save $500… TODAY

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

AbbVie, inc. (abbv)

AbbVie (ABBV) is the 6th largest pharmaceutical and was a spin-off from Abbott (ABT) back in 2013.  Their most prolific drug is Humira, which I know we have all seen/heard at least ONE commercial.  Humira is the primary source of revenue for AbbVie and the patent is set to expire in 2023.  It’s a good thing they are spending $5B+ in Research and Development this year (Source: Form 10-Q Second Quarter).

Trading at $70.51, they are trading far from their 52 week high of $96.60.  That’s a whopping 27% from their high!  AbbVie currently yields 6.07% and this is significantly higher than their 5 year average yield of 3.78%, showing there’s potential slight undervaluation.

In addition, the analyst expected earnings are $8.87, the average from 13 analysts.  The annual dividend is $4.28.  The dividend payout ratio is a solid 48% baby!  Right in the sweet spot between 40% and 60%.  This demonstrates AbbVie likes to reward shareholders and retain funds to continue to develop and grow their business.  Speaking of, their dividend growth rate this past year was over 11% and I anticipate mid-to-upper single digits this November.

Knowing the expected $8.87 earnings, with a stock price of $70.51, the price to earnings (p/e) ratio for AbbVie is a low 7.95… crazy low and far below the S&P 500 on average and other pharmaceutical companies.

Lastly, they are set to acquire Allergan (AGN) to create a monster pharmaceutical company.  This has potential to create a $150B+ market cap company.  I currently own almost $3k or 37+ shared and would like to see a position of 50 shares.

See – Dividend Diplomat Portfolios

Dividend Stock Watch List Conclusion

That’s all folks!  Just one company, right now, that’s on my radar.  Why so minimal, you may ask?  Well, it’s a combination of the market surging and nothing looking really appetizing right now.  In addition, we don’t own that much healthcare, so that industry sticks out to us, as an area to invest more funds into.

Further, their ex-dividend is not until 10/11/2019.  Therefore, by purchasing AbbVie, you are able to capture the end of year dividend that is paid in November.  The dividend metrics all mesh up to point to buy, at the moment.  

As you have noticed, I have trickled many articles on this page, to hopefully educate new dividend investors out there, or to sharpen the terminology for current dividend investors.  As always, stick to your investment strategy and dividend stocks will be there.  Thank you, good luck and happy investing everyone!

-Lanny

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19 thoughts on “Lanny’s October Dividend Stock Watch List

  1. I’m surprised that ABBV is the only one on your list for October. Of course, things can change and a lot of opportunity can open up with just 140 characters from a certain someone. There’s not much on my list right now either that I’m just ready to pounce on. CMI still looks pretty good though but the big question is whether now is closer to the top or the bottom of their cycle. I’d venture to guess closer to the top. MO keeps calling my name and its siren song just might win out. Many of the companies are in the okay-ish area so I’m not quite ready since capital is pretty light.

  2. Good time to buy ABBV Lanny.
    I just got DAL and more RTN today, among others. I just hit an ex-div with 3 REITs that recently cut dividend’s so I did some shuffling around. I just posted about it to explain my moves.
    https://www.chicken-wizard.com/2019/09/big-shake-up-in-my-portfolio.html
    I’d love to hear your opinion.
    I’ll be getting a good chunk of $ this month, so I will be looking around for a good deal. I’d like to get Target before it goes too far up, but Im not sure..
    Cheers,
    John

    • CW –

      Nice job, really liking ABBV and DAL, as well.

      Pumped to read more on your moves being made. Let’s keep progressing towards the goals, time to let up. Also, was able to grab MMM today, as well.

      -Lanny

  3. Nice! Seems everyone in the PF space owns or wants to own ABBV & O

    Just curious, I was looking at your guys portfolios (and excuse my ignorance on all the differnet US stock symbols), but are your portfolios 100% US allocated, or are there some stocks from other countries/funds that cover global exposure?

  4. Love ABBV picked up some recently.
    Merger talks ended last week
    Looks like you guys are gonna get free trades soon but talks of TD Ameritrade buying etrade.
    The race to commission free trades is wild right now.

  5. Yeah 2 articles I read mentioned it was a good possibility which would make TD Ameritrade the second largest brokerage behind Schwab.
    Gotta love free trades.

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