A Dividend Growth Investor Looks At Earning Season - Part Two

by: Bob Wells

<< Return to Part 1

I'm a dividend growth investor, and I love earning season. Here's why. It was last earning season. It was 9:30 am., the market had just opened and a great dividend growth stock, Smucker's (NYSE:SJM), was down if I remember correctly more than 4%. Wow what had happened? It had missed earnings by a cent or two. It had disappointed the analysts. Around noon when I looked again that loss had started to reverse. By the end of the day SJM had made back a significant amount of its earlier loss. I watched this pattern repeat itself a number of times that season.

We couldn't benefit from this last season because we had no available cash to invest. This year is different.

I have downloaded the list of stocks with a history of paying and growing dividends commonly referred to as the CCCs. Every Dividend Growth investor needs to download these lists available to all at no cost courtesy of SA Contributor David Fish. They are available in Excel and PDF form.

We have developed our own portfolio business plan that spells out our objectives and the criteria we will use in determining whether a stock is fairly valued. In our case, we have a number of options. Option one: purchase more shares of the stocks that are already in our portfolio generating monthly income through the dividends they pay. Option two - buy from our watch list of dividend growth stocks that are again included in the CCCs.

If you've followed us you know our portfolio contains 2% positions in 50 dividend growth stocks. We have an additional 40 stocks from the CCC lists that match our objectives in a watch list so they are easy to monitor. We use a portfolio set up on Sig Fig to monitor the active movement of stocks in our portfolio and on our watch list.

Here are just some of the companies reporting this week that are of interest to Dividend Growth investors:


Coke - (NYSE:KO)


Johnson and Johnson - (NYSE:JNJ)

Mattel - (NASDAQ:MAT)


Abbott - (NYSE:ABT)

Honeywell - (NYSE:HON)


Kinder Morgan Partners - (NYSE:KMP)

Stanly Black and Decker - (NYSE:SWK)

Yum Brands - (NYSE:YUM)


Genuine Parts - (NYSE:GPC)

Microsoft - (NASDAQ:MSFT)

Nucor - (NYSE:NUE)

Pittsburgh Plate Glass - (NYSE:PPG)

Verizon - (NYSE:VZ)

VF Corporation - (NYSE:VFC)


Altria Group - (NYSE:MO)

General Electric - (NYSE:GE)

Johnson Controls - (NYSE:JCI)

Kinder Morgan Investments - (NYSE:KMI)

Phillip Morris - (NYSE:PM)

What I plan to do each morning of earning season at 9:30 is watch to see what happens to the 90 stocks we either have or are watching. I am not trying to time the bottom, just hoping to buy a few of the stocks we want at a discount. Remember in our case we're looking only at stocks that have proven they can supply steady reliable retirement income from the growing dividends they produce.

In Part One many of you shared earning season stories and strategies we can all learn from. It is always great to hear from other DG Investors with dry powder about what's on your shopping list this earning season. May your earning season experience prove successful.

Disclosure: I am long KO, JNJ, INTC, ABT, KMP, VZ, MO, PM.

Disclaimer: I am not a professional investment advisor or financial analyst. You need to do your own research and due diligence before you decide to trade any securities or other products.