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Lanny's November 2017 Dividend Stock Watch List

Nov. 03, 2017 4:00 AM ETT, CAH, CVS9 Comments
Dividend Diplomats profile picture
Dividend Diplomats

It's getting colder here in Cleveland, currently 38 degrees as I'm typing this. As the weather has gotten colder, the stock market has chilled down a bit and has created a few opportunities for us dividend investors. I have not been as active the last few months as I'd like to be (as it relates to dividend stock purchases), but patience is a virtue in this game, that's for damn sure! Sitting here on the cold Saturday morning, sipping my warm coffee, I wanted to write my thoughts on three dividend stocks that I am considering for a future purchase. Let's grab another cup and check out the stocks!

Dividend stock watch list

AT&T (T) - Makes me excited when I see one of the Top 5 Foundation Stocks on sale! It's no question as to why this is on my list. The last month, the telecom stock was down 12.38% and currently is priced at $33.97 (10/27). I will go through this dividend aristocrat's stock metrics in short fashion. Their forward dividend is $1.96 (set to increase in November), which equates to an astounding 5.77% dividend yield (MUCH higher than my portfolio yield). Now, their five-year growth rate is 2.18%, given their high yield - this makes sense. Analyst final expectation for this year is $2.92. Therefore, the payout ratio is 67% with a price-to-earnings ratio of 11.63. Damn those are two great metrics there for a high yielder in a typically high payout ratio-centered industry. I currently have about 165 shares of this company, but wouldn't mind rounding that out to 200 shares!

Cardinal Health (CAH) - Another dividend aristocrat steeply discounted? Are you serious? This is an interesting company in a publicized industry. Amazon (AMZN) effect is taking place here, given their thought process on

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Two guys who love Investing, Dividends, Frugality, Passive Income & attempting to Reinvest Our Dividends to one day achieve Financial Freedom! Follow us on your journey towards a work-free life! We share EVERY ASPECT of our journey on our blog, social media, and YouTube Channel. Make sure to follow us so you don't miss an update. Updates include the stocks we are watching, buying, selling, and our overall thoughts about the the marketBlog: http://www.dividenddiplomats.comYouTube Channel: www.youtube.com/dividenddiplomatsTwitter: https://twitter.com/DvdndDiplomats

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Comments (9)

Daniel.Cluley profile picture
ENB, CHD, MKC, and GPC right now. T and CVS/WAB would be on there, but bought last month and are approaching too much of my portfolio. Diversifying some more this month.
Pro_Larsen profile picture
CAH shows good results, but there is also Regeneron Pharmaceuticals Inc. REGN. They reported positive results from their phase 3 trial investigating the use of co-developed drug dupilumab as a steroid-dependent asthma treatment.
ValueVole profile picture
Recently added to T. Will add more to CVS if it gets down to 68.00 again. I prefer MCK over CAH. CVS has the best risk/reward proposition in my opinion.
I’m liking CHD a lot right now
kauba profile picture
I've added both T and CAH in the last few weeks.
T is my top holding, and I recently added more at $33.52. Next increase in January puts the current yield at 6%, and I believe T is a player that will be here for generations to come.

I have traded in and out of CAH, but at the current price I am ready to jump back in for a long-term position. I think the AMZN effect has provided us with a great opportunity to pick-up an aristocrat on sale.

Best of luck.
BeatingTheJoneses profile picture
T is a value trap with too much debt. It is going to take some serious capital to update their infrastructure with 5G. Also I don’t understand them buying Time Warner. Granted I do like them better than Verizon but TMUS is better than both if for some reason you have to have a telecom company.

CVS and CAH are both excellent. Truthfully you can’t go wrong with either one. Initially I was in both and then rotated out of CAH and into CVS. Really the decision came down to CVS having more diversity, runway for growth and perceived better value. I think their management is top notch in making forward thinking moves unlike WBA that just keeps doing more of the same thing. CVS with their PBM, Minute Clinics, and rumored purchase of health insurer they have an extremely large moat to protect against the perceived Amazon threat. Personally I think the Amazon worries are overblown similar to video and music streaming. The same will be said for grocery. Amazon has been less about dominating an industry but more as a value added to Prime members.

CAH controls like 70% of the market which creates a large moat. My wife is a hospital executive and she says they are top notch. I don’t see much improvement AMZN can bring here besides cost-cutting from better logistics. The logistic advantages of AMZN to CAH, if there is any, is something I know nothing about. CAH in the meantime is subject to price weakness in generics and I don’t see them getting into any other line of business even though they should since they control so much of their current market. At their current prices, yield and dividend growth you definitely could buy now and do extremely well as that plays out.

I’m long CVS. It makes up 5% of my portfolio. My top conviction stock right now.

Good luck!
BeatingTheJoneses profile picture
Sorry CAH is getting into medical devices which I think is a great addition for them. I just don’t think it’s revolutionary when comparing to CVS. Granted bolt-on acquisitions with conservative balance sheet is a plus just not as much total return as I can buy with CVS at the moment.
38 degrees! Where are you writing this from the bottom of Lake Erie? Lol. Good article.I have been adding T all the way down and plan to keep adding more during the sale. I like your top 5 but plan on waiting until McDonald’s and J&J pull back.
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