Lanny’s September Dividend Stock Watch List

What has happened in the last 30 days?  Interest rate cut of 0.25, trade tariffs and Target showing the stock market and dividend community that retail is not dead.  As we all know, the market can be a very, very volatile ride and each month brings potentially new opportunities.  Industries are hot or cold, depending on the place and time of the year, or an earnings beat here or there.  Time for us to dive in and see what I’m cooking for my September Dividend Stock Watch List!

Dividend stock watch list

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

The market is down 1.75% from July 21st through August 21st.  Fed did it!  They announced the 0.25% rate cut, this sent the marks up, but then the trade-war tariff talk picked up with China, which has caused the roller coaster that you see throughout the last 3 weeks in August.  Talk about not being able to ever predict the future!

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

Since the rates dropped, this has sent the markets shuddering downward, and I have seen the 30 year mortgage rate at 3.35% and the 15 year at 2.85%.  This is one of the BEST times for you to re-finance your mortgage!  If you aren’t at least analyzing, talking to a mortgage banking or your financial institution, you are not providing a service to yourself or your family.  I recommend exploring the option, as it can save you money per month with a lower mortgage rate, which would equal a lower payment (typically).  This can save you thousands of dollars in the long run, as well.

See – Interest Rate Cuts, YOUR Investment Portfolio & YOUR Mortgage

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

Cummins Inc. (CMI)

Who is Cummins (CMI)?  Well, linked below, is my purchase on this classically boring, dividend income stock.  They have a 10 year and going dividend growth streak, with the latest clocking in at 15%.

They have an approximate 35% payout ratio, with a price to earnings of ~9.37.  Further, their yield is now over 3.55%, which is far higher than where they are at historically.  In addition, their price point of $147.76 represents an approximate $19 price drop or 11.11% lower than my initial purchase.  I just may have purchased them a time or two during august ; )

See – Lanny’s July Dividend Stock Purchase Summary 

LyondellBasell (LYB)

I have purchased LYB on quite a few occasions, including twice in May and AGAIN in July, only $10 too high, based on today’s price of $73.13.   They continue to hover around that $73 stock price point, which causes their dividend yield to be closer to 6%.  Further, their dividend increase this last go around was a solid 5%.  They are in the chemical industry and the competition is obviously Dow Chemical (DOW), as well as Eastman (EMN).

The price to earnings is a little over 7 and the payout ratio is around 40%.  Therefore, they still have room to expand their dividend going forward.  I’ve invested ~$5,000 and I could see myself adding another $1,000 to the position, to average down.

See – The Power of the Dividend Growth Rate is Real

Archer Daniels Midland (ADM)

ADMlogo2

The dividend aristocrat is back on the list!  Hard to keep them off, to be honest.  If you haven’t read on the blog yet about them, ADM is an American global food processing and commodities trading corporation.  They help fuel the food that we eat on an every day basis.

They are currently trading at $37.93, which is barely $1 away from their 52-week low.  Archer’s last dividend increase was ~4.5%, which is a little on the lighter side. Now that ADM has slid into the $37 range, however, their yield has juiced up to 3.71%, based on their forward dividend of $1.40 per share.

Analysts still are expected $2.83 in earnings this year, equating to a price to earnings ratio of 13.40, so not the lowest, but definitely FAR below the market, on average.  In addition, I believe the trade tariff discussion are hurting them quite a bit.

Needless to say, this is an undervalued dividend aristocrat that is approaching the 4% range.  If they drop below $36.00 per share, I think I’ll be adding to my position.

Dividend Stock Watch List Conclusion

The tri-fecta, you betcha!  These are three solid dividend growth stocks listed above.  Now, they aren’t he most popular names in the world, but they have sound balance sheets, safe payout ratios and are starting to really be hard to not make a move.  The move I am referring to is buying shares in these fundamentally sound companies.

Out of all three, I believe I would be more interested to invest within Cummins (CMI), based on where my current position stands.  Then, I’d love to average down on LyondellBasell (LYB), as long as prices stay down.  Lastly, but definitely not lease, Archer Daniels Midland (ADM) will bring up the rear for me.

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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14 thoughts on “Lanny’s September Dividend Stock Watch List

  1. Lots of great companies. I owned CMI before, but then sold and just might get back in. I’m still looking to add more shares of ADM but it keeps just barely missing my limit order. I’d love to get a 4% starting yield on that one, but in all honesty I’ll be buying more shares before then. In August I’ve already added MMM, CSCO and MO and MO just gave that 5% dividend raise last night. I’m pretty stoked that we should start making at least one small purchase each month going forward to get the dividends moving higher again.

    • Also, thanks to you I decided to check out a possible refi for our house. Using the calculators over at Bankrate it looks like we could possibly save anywhere from $125-$175 per month just using some rough estimates. I just might have to start researching that a bit more!

    • JC –

      Thank you for your comment. Interesting – any reason why you sold? Was it the big price jump?

      ADM is high on my lest, and LEG is looking bright right now, as well. I could see myself owning more MMM, CMI and LYB… tough, tough call!

      We should all be making purchases during these opportunistic times. LETS GO!

      -Lanny

  2. Nice list Lanny, thanks for the ideas! I would probably be most interested in LYB, as I don’t have any materials company in my portfolio yet. And they seem to be undervalued at the moment, so now would be a nice time to add to them. Unless the downturn continues, but you never know.
    I also posted my watchlist today with 4 companies in it – CAT, EMN, ALB & WRK.
    P.S. I really loved that TGT pop this month. They are up ~50% since I purchased them in January!

    • BI –

      I appreciate the comment. I’m going to have to sneak a peak at your article, I own CAT and WRK, love EMN, though, as well.

      TGT pop was insane. Curious as to the real driver behind there and would like to review their O/S shares..

      -Lanny

  3. Thanks for the list of excellent companies to follow. It’s always great for one’s perspective to see what others have on their watchlist. I personally have the likes of PRU, MO, and GEO on my watchlist.

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