Lanny's June Dividend Stock Watch List

Includes: DAL, JNJ, PEP, PFE
by: Dividend Diplomats

The weather is heating up and it's time to put on the spectacles for the dividend stock watch list. I feel like I have been on the side lines for such a long time, not having purchased a stock in weeks. Over Memorial Day Weekend, I was able to take time aside and really focus on the quality of stocks that are out there. As others know, I came to find out that there are many opportunities out there for us and it is such a hard decision when it comes to which one to add to the dividend portfolio. Bert comes out with his expected dividend increase articles, others are buying stocks on the daily, it seems, and you know what, it's time for me to see what I should set my sights on. Without further ado, here are my dividend stocks I am watching for June!

Dividend stock watch list

Johnson & Johnson (NYSE:JNJ): As of May 25th, the ending stock price is $121.47. Analysts are expecting $8.13 in earnings per share this year, representing a 14.94 price to earnings (P/E) ratio. JNJ has suffered a decline of 12% year-to-date (YTD) to their share price. Guess what? They are on our top 5 foundation dividend stock list, having increased their dividend for OVER 55 years. Further, in April, JNJ increased their dividend 7.14%, which was truly their historical growth rate, as us investors have been used to. I own just over 43 shares in my portfolio and it could never hurt to add more. They currently yield 2.96%, which is under my taxable yield in total of 3.27%. Seeing JNJ dip below $120 would cause the eyebrows to raise even more, as their yield will start to show at over 3%. Sadly, the ex-dividend date was at 5/25, so the next dividend won't arrive until September, if any immediate purchase is made.

Pfizer (NYSE:PFE): Another position that I own and another pharmaceutical. I have 96 shares in my possession and they are becoming quite a dividend stock for a portfolio, as they are on the verge of 8 years in a row of dividend increases. They currently are trading at $35.68 with a yield of 3.81%, well over my yield on the total portfolio. Analysts are expecting $2.95, therefore, the P/E ratio is a dismal 12.09, very undervalued here. Their dividend growth rate is usually at the 7% mark, give or take a few basis points. Traditionally, it's been a 2 cent per year increase to the quarterly dividend, and if they do that again, it would be a 6% dividend increase. I'd like to see them in the $34 range.

Delta Air Lines (NYSE:DAL): This damn airline was looking SO nice about a week ago and then they had to have their stock price go from $52.95, on May 18th, to $55.87, May 25th. That's a solid 5.5% jump since then, but I am still hopeful that there can be a drop some time soon. With analysts' expectations of $6.13, the stock's P/E ratio is only 9.11 and they are yielding just 2.18%. However, the yield is low, that dividend growth rate MORE than makes up for it. In fact, I did a thorough analysis of DAL earlier, and they can continue to churn out 50% growth rates to the dividend for a while to come. I'll have to be stubborn again and would like to see them in the $50-$52 range. Come on Delta!!

PepsiCo (NYSE:PEP): Yes, Bert purchased Pepsi this past month and I even picked up more shares, as it was the first time I bought them since my first trade 7 years ago! This stock is hard not to keep on your radar. They are now trading at $100.31, yielding 3.70% (which is above their 5-year dividend yield average of 2.80%) and well above my total yield portfolio as well. Pepsi is in that illustrious group of the dividend aristocrats, having increased their dividend for over 46 years straight and they show no signs of slowing that streak down, at least not in this lifetime. Further, their product array always is distorted, as investors and individuals seem to forget that they own Frito-Lay as well, giving them the extensive snack line that holds their beverage products together. Analysts expect $5.70 per year, which equates to a 17.60 P/E ratio. Having bought them a couple bucks cheaper a few weeks ago, I would like them back in that $96-$98 range and will be patient for that.

Dividend stock watch list conclusion

Big decisions here, as these are all amazing stocks to have in your portfolio. Given that interest rates are rising right now, I may place Delta on the bottom of the list until the yield creeps up just a little bit more. I know we are out of earnings season, for the most part, and it may be time for other events to break out.

I love me some JNJ and PFE, always, especially because they are pharmaceutical behemoths. Further, I always wished my position in either of the two were larger than where it currently is. However, I can't leave my boys at PepsiCo behind, my position is bigger with my last purchase, but it isn't big enough!

What are you seeing this June? I have seen quite a few names, and am curious if you are more preferred in other areas. Areas such as Gilead Sciences (NASDAQ:GILD), Iron Mountain (NYSE:IRM), the list can go on. I would love your feedback and comments, please share them below. As always, appreciate the stop by, best of luck and happy investing!