Now that June is over, it's time to turn the page to July. For some reason, with each new month, I have a feeling that it brings new opportunities. By opportunities, I mean new stocks to have on the watch list, as there are usually never two consecutive watch lists that are the same. I would say that goes to show you how much activity can happen in such a short period of time. Lebron just left Cleveland again, and turning to look at stocks helps ease the pain of seeing a fellow Akron-born native depart. Without further ado, here are the dividend stocks I am watching for July.
Dividend Stock Watch List
Delta (NYSE:DAL) - Delta Air Lines has been on my watch list before, and even in recent months this year. As of June 29th, it was trading at $49.54, and analysts have an expectation of $5.87 earnings per share this year. Its price-to-earnings ratio is at 8.44, which is staggeringly low. The company opened up this year at $55.35. Talk about a steep drop, where it has plummeted 10.5%. The most enticing piece for me here is that the company has a recent history of stronger-than-usual dividend growth rates, as the 2017 increase was 50%. Can Delta keep that growth rate up? I actually think it can do that, at least one more time, before going down to the 15-30% growth rate range. I am flying high on this stock right now.
Starbucks (NASDAQ:SBUX) - Ah yes, a dividend stock watch list wouldn't be complete with the iconic symbol that we see across the nation. As the company continually goes through management shake-ups, as well as other news related to its product offerings, including store closures across the United States, I don't believe this changes much, if anything, for the long-term performance of the 'bux. In order for it to solidify shareholder appetite, the company boosted its share repurchase program and jacked up the dividend another 20%! This was off-schedule, and was well-timed with the negative press going on. What has happened to the stock since? It has dropped over $5 per share, and as of June 29th, was at $48.85, or a 14% decline since the start of the year. Further, analysts have a $2.42 earnings per share expectation, which equates to a 20.18 price-to-earnings ratio. This is still slightly on the higher side, but much less than where shares historically trade at. I am a fan of what Starbucks brings to the table and am keen on keeping the stock on my radar.
Cisco (NASDAQ:CSCO) - It's back, baby! Cisco is back on my list, as the stock has started to come back to the ground by quite a bit, falling $2-3 in recent weeks. However, it is actually up quite a bit since the start of the year, but the company also has a much higher yield, after it announced a 13.79% dividend increase earlier. At a price of $43.03 and earnings per share expectation of $2.59, the price-to-earnings is 16.61. Therefore, CSCO is in the middle of SBUX and DAL, as well as holds a spot on my dividend stock watch list.
Now, I currently have over $2,000 to deploy out into the market, and I want it to be deployed in the best spot imaginable. However, I also know that I must take the emotion out of the decision, use the numbers as fact and invest based on the best decision at that time, with the best information I have at that same time. I currently have a position in 2 of the 3 companies above, with CSCO and DAL. However, my position with DAL is not as significant, at only ~30 shares. I could double that position up and still have cash left over. CSCO already has almost $3.5K in my portfolio, based on market value, and DAL is less than half of that. Therefore, DAL would be the better option right now.
Dividend Stock Watch List Conclusion
Therefore, as it relates to my dividend stock watch list above, my order of operations, pending upcoming prices on these stocks, DAL, SBUX and CSCO would be my order of preference. I'll be highly targeting my favorite airline, and I'll follow it up with one of my favorite cups of "Joe"!
I would anticipate making a purchase within the next 5-8 business/trading days. The reason for this is, I am waiting for a brokerage transfer to go through, as that would cause less speed bumps along the way, given I have current ownership in DAL and CSCO. In addition, my trading cost may either be free, $3.95 or $4.95 - so not a drastic impact - when making this decision. Further, the other nice piece is the timing of the ex dividend dates. In order, from DAL, SBUX and CSCO, the ex dividend dates are August 10 (expectation), August 8 and July 5. Cisco, being at the bottom of my 3, the July 5th ex dividend date is okay.
What would you pick out of my top 3 dividend stock picks above? Going more towards flying, food or technology? Are you staying away from any of them, pending new information? Any thoughts on my factors above? Thank you everyone for coming by and sharing your thoughts. As always, good luck and happy investing.