Saturday, April 18, 2015

Watchlist - End of April

April is almost over! I have a preference for picking stocks that will go ex-dividend soon to get in for the dividend payment. However, I will always buy a stock that is of a good deal that has a later paying dividend date. My requirements for picking stocks is relatively straight forward and are as follows:

  • BBB+ Credit rating or higher. A- or higher is preferred.
  • Dividend streak of 25 years+ preferred. 15 years+ is ok but a higher margin of safety in price is required.
  • Yield + 5yr Average Div Growth = 12%, this will be 8% for utilities
  • Earnings consistency, if the business is cyclical there needs to be a higher margin of safety in price
  • PE is at or below fair value (indicated by FastGraphs)
  • Price is below fair value as indicated by Morningstar and S&P, buying stocks of fair value or slightly above fair value are ok for core positions.
Below are stocks that I am eyeballing at the moment. I have taken price guidance figures from M* and S&P.

Ticker Price Morningstar S&P Jefferson Valuation
WMT $79 $83 $78 Low Risk
XOM $87 $98 $95 Low Risk
CVX $110 $114 $120 Low Risk
V $65 $69 $67 Med Risk
MA $89 $104 $107 Med Risk
PEP $96 $95 $84 Least Risk
UTX $117 $116 $128 Least Risk
GWW $242 $272 $235 Low Risk
ROST $103 $109 $111 Low Risk
TJX $66 $72 $68 Least Risk
MCD $95 $98 $84 Low Risk
BDX $142 $165 $155 Least Risk
KMI $44 $43 $45 Most Risk

The yellow indicate 12 month targets since S&P does not have a fair value estimate. In the coming weeks I will be planning to add to the following companies. I prefer sprinkling my contributions over several companies of fair value instead of dumping it all in one stock. Sharebuilder allows me 12 automatic investments every month.

Visa - a bit expensive but I believe in Visa's growth prospects.
Mastercard - Healthy discount according to sources above
UTX - add to existing position, moderate yield and it's of fair value I think.
TJX - add a small amount to my position
ROST - add a small amount to my position
BDX - initiate a position in this consistent dividend champion.
KMI - I will most likely add to this at the end of the month to get some more before the ex-dividend
WMT - add a small amount. Their dividend growth was very small this year but I still consider this a core position in my portfolio.

I do not feel like adding more to my oil major stocks at the moment.

I was going to add to PM last week but the stock shot up 9% after an earnings beat. I probably will sit out until next quarter to pick some more up if it falls. My existing holdings in PM and MO are quite a large percentage of my portfolio already.

2 comments:

  1. PM's jump caught me by surprise, too, as I was looking to add more shares. Oh, well... fortunately I have some skin in the game.

    Take care!

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  2. Excellent watch list and strategy. I added my second round of PM in March - mostly to average down on a good company. I wasn't expecting them to jump quickly either.

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