Lanny's February Dividend Stock Watch List
- I do occasionally see AT&T on watch lists, but the yield is significantly higher than most companies out there (however, that payout ratio allows the dividend to appear safe).
- Outside of holding the dividend (and for another potential year or so), it's hard not to love CVS.
- Who DOESN'T have ABBV on their dividend watch list?
Dividend Stock Watch List
This is not a complete revamp nor are these any new companies that I don't already have in my portfolio. Does that matter? Hell no, as my dividend portfolio is in need of dividend paying and growing companies! If they are already in my portfolio, even better. Further, trying a new format where I'll discuss a few quick metrics from our screener, in order to efficiently show why they are on my radar.
1.) AT&T (T) - Who else has them on their list? The big telecom is still making noise, but I do feel it's been a while for me since I have looked at them. I know Bert had purchased shares a bit ago and, well, their price just isn't moving. Analysts are expecting $3.57 earnings per share and their recent earnings release looked solid. Their dividend per year of $2.04 equates to a payout ratio of 57%, somehow, which is a very solid number for them. In addition, their yield currently is approaching 6.75% (as of 1/31 close). They are a dividend aristocrat with a modest 2% dividend growth rate as of the recent few years.
2.) CVS Health (CVS) - Outside of holding the dividend (and for another potential year or so), it's hard not to love CVS. I wrote about the debate between them and Walgreens (WBA) here, and the battle is truly fierce. In short, they are liquid and make a TON of money, especially after this Aetna acquisition. Historically, they usually pump out a solid growth rate, but due to new debt taken on for the Aetna deal, they halted growth on the divvy. That's okay, as they are trying to manage their balance sheet and cash flow. Their payout ratio is a modest 26% and this resembles a dividend stock that is locked and cocked for dividend increases in the near future!
3.) AbbVie, Inc. (ABBV) - Who DOESN'T have ABBV on their dividend watch list? They got pummeled after earnings, though 18 analysts anticipate $8.75 in earnings per share, to which they are trading at $80.29. This represents a very low 9.2 price to earnings ratio and that means they are sporting a 49% payout ratio, perfect. I would love to build my position on this one.
Dividend Stock Watch List Conclusion
No new names, no problem. The one area I have to look out for, though, is that I own a significant amount of shares in AT&T. I personally have over 200 shares and that number comes closer to 300 shares, when combining my wife's portfolio. Therefore, not sure how much more I'm willing to add there. I may have recently purchased ABBV last week… if you catch my drift. However, CVS is a company that I have a very minor position in, at less than 0.50% of my portfolio. I am wondering if they are a company that I can buy for the opportunity of extremely strong future dividend growth. However, could someone have said that a few years ago? Now they've maintained the dividend for the last two years with plans on, more than likely, doing that again for an additional year. I don't think they have another massive deal, like Aetna, in the tank/left in the tank. Therefore, I would say 2020 through 2025 should be a very pivotal time period for them and potential for dividend investors.
What do you think of the 3 dividend stocks above? Do you prefer one of the dividend stocks over the others? I know that ABBV has been the most-read stock I have seen on watch lists. I do occasionally see AT&T on watch lists, but the yield is significantly higher than most companies out there (however, that payout ratio allows the dividend to appear safe). Thank you for the feedback and reviewing my dividend stock watch list! As always, good luck and happy investing!
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