It feels good to step off the sidelines and buy a stock considering the market has been on a tear for the last few months. Slowly and surely, I was stashing cash aside waiting for the right opportunity to strike. On this day, I received a message from Lanny in the morning that was short and to the point. “Target…may be time to buy.” I had just woke up at this time (I was in a timezone two hours behind), but I knew that message meant that something big happened with Target’s stock that caused the price to drop. When I read the text, I didn’t realize it, but Target was falling after their most recent earnings release. The time was right, so let’s see I decided to purchase additional shares of Target this week.
This week, I felt like taking a different approach to finding hidden gem dividend growth stocks. Typically, as I did with my watch list last week, I run the Dividend Diplomats Stock Screener and try to identify a sample of stocks that fit my metrics that I can buy at that moment in time. And if that doesn’t work, Lanny or I will run a different screener and create a “Top 5” stock list of some sorts and identify a certain type of dividend stock we are targeting. For example, we have run screeners for low dividend yield, high dividend growth rate stocks and dividend growth stocks with low debt to equity ratios in the past. This time, my approach was to identify an industry that is not represented in my portfolio and check out a few dividend stocks in the sector and see what I’m missing. Maybe they will fit, maybe they won’t….but there is only one way to find out. For today, I wanted to check out some grocery store stocks that pay a dividend.
Recently, we saw the ugly side of debt. As we all watched Kinder Morgan’s stock fall and wait for the final, inevitable sword of a dividend increase, there was one thing that became evident…KMI’s debt level was too high and the results were unsustainable in the current market environment (See Lanny’s awesome write up/analysis about KMI from earlier in the week). The pressures mounted and management plus the Board of Directors decided to slash their dividend to preserve cash flow for capital expenditures and cover interest/dividend payments. While debt isn’t a bad thing, I don’t want you leaving this intro thinking that’s my conclusion, runaway/uncontrolled debt can present many problems. The name of our game on this website is investing in stocks with a growing dividend income stream, so we try to avoid companies and stocks that take us off of this course. Which is very ironic considering that Lanny and I purchased shares in KMI just under a month ago (here and here) With the wound from KMI still fresh, I wanted to run a stock screener and identify several Dividend Aristocrats with low debt levels. Check out our newest installment of our Top 5 list series (foundation stocks and low dividend yield/high dividend growth rate stocks)….the Top 5 Dividend Aristocrats with Low Debt to Equity Levels.
It’s already mid-August and us Diplomats haven’t came out with our watch list yet. The market has been a rollercoaster ride, to which I hope everyone this summer has had some sort of an amusement happen, gone to a theme park, taken a day or so off to take it all in. Well, we were back to the lab and doing research on finding what stocks we are looking at. Enough with it – lets see what is on our August watch list!
As it turns out I was not able to sit on the sidelines too long after my purchase of Emerson Electric last week. On Friday I was paid, which means I had $400 readily available to invest since I have a portion of my paycheck automatically deposited into the checking account linked to Sharebuilder. I have been watching a lot of stocks over the last month or so as a result of the Greece turmoil and the general pullback in the market that recently occurred, which has caused a lot of great dividend growth stocks to become discounted. I purchased one of the stocks on these watch lists, the question is…which stock was it?
Share buybacks. At first glance – it’s just a headline we read or a financial statement disclosure or event that a company/entity goes through. As an investor, some of us may not even know what that means, what the transaction entails or why companies even perform such a program – buying back shares, what? As of late, the Dividend Diplomats have discussed share buy backs in the IBM purchase, the November stock watch list, as well as DOW Chemical unleashing dividend value. I am going to make this post a very informative and illustrative piece for all of us. Let’s share the buyback event.