May 2019 - Stock Watch List

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Includes: BCE, CDUAF, ENB, IPPLF, MMM, NTR, T
by: PassiveCanadianIncome
Summary

The Trump effect strikes again and the market has been seeing quite a bit of red again.

As always though, I don't believe in Market timing or setting target prices on certain stocks.

Throw money into some great dividend growth stocks and watch that portfolio compound, while the dividend income grows.

Hey everyone.

First off, I'd like to apologize for no posts last week. This was the first time in over 2 years that I didn't do a weekly post. Life has been crazy busy. Also, a book that I rented from the library was due and I couldn't renew it, so I was forced to focus on finishing it off.

The Compound Effect - by Darren Hardy was a fantastic read and shows you the power of your habits and how we should all start to take control of both the good and bad habits we have to improve our life.

Anyways, it's raining yet again! So much rain here in Ontario this spring. So, I have some time to catch up on the website, stocks, and random house errands.

The Market

The Trump effect strikes again and the market has been seeing quite a bit of red again. A 25% tariff is a big deal and these trade wars aren't good for anyone. Well, they are good for us buyers! Prices are starting to slip down but aren't screaming buys.

Facebook (NASDAQ:FB) groups I'm part of generally seem really bearish, people tend to be hoarding cash. Reminds me a bit of December last year and we aren't even close to those levels. Things can continue to drop in price or China and the US can create a new trade deal and the market will flourish…

As always though, I don't believe in Market timing or setting target prices on certain stocks. (I have been burned before just hoping a stock would drop 2 bucks to hit my "target" only for it to shoot right up before hitting that price).

Like every other month, its steady eddy. Throw money into some great dividend growth stocks and watch that portfolio compound, while the dividend income grows.

My Current Sector Weighting

This is a snapshot of our current portfolio allocation. When I look at others, generally Utilities and Financials aren't the 2 highest sectors. I got a bunch of utility stocks when they pulled back on rising interest rates. I thought they were a great buy and figured the economy couldn't support rising interest rates (especially in Canada). So, they have done very well for me as the tide changed to slow things down.

Financials - Well, I just love these Canadian Banks and wanted to get both BNS and TD dripping for me.

A while ago, I mentioned I wanted to get back to what I used to do. Focus on our 4 lowest sectors. That 0% basic materials kinda bugs me a bit… Although I do own a bit of physical precious metals.

My communication sector got destroyed on the sale of Shaw, so most likely that's where I'll be deploying some money, but who knows until that money is in the account and ready to be put to work.

I would like to contribute to our kids RESP account this month. It currently holds CNR, Canadian Utilities (OTCPK:CDUAF), Enbridge (NYSE:ENB) and Inter Pipeline (OTCPK:IPPLF) so a phone company or even Nutrien (NYSE:NTR) would be a nice fit.

Then again, 3M (NYSE:MMM) keeps dropping in price and I'd love to increase that holding, so maybe the money will go into the rrsp.

Stocks

So, I basically mentioned which stocks I'm interested in buying at the moment. Bell, Telus, Nutrien, or 3M.

BELL (NYSE:BCE)

This stock seems to be a staple for most Canadian Dividend Investors, but yet it's one that I have no position in. I personally use Virgin for my cellphone and they are pretty good. So they are already getting a pay cheque from me every month, I might as well start getting paid from them. They currently offer a dividend yield of 5.3% which is pretty huge. Their 5-year average dividend yield is 4.83%. They have a P/E ratio of 18.8x and are not too far off their 52-week high of $60.99 though…

The metrics don't scream out buy me, but they are a solid blue chip company and one that would fit very nicely into our kids RESP account. Our kids won't need the money for another 12-18 years and Bell should continue to do well in the future.

TELUS (NYSE:T)

I currently hold Telus and its now our sole position in this sector. It currently makes up 3.7% of our total portfolio, so I can throw some money into them but I try to keep positions under 5%. My wife's phone is Telus and they are great to her. They are known for their customer service. Last quarter they added 99k new subscribers and raised their dividend %3.21. (They tend to raise their dividend twice a year and target a 7-10% increase until 2022) They currently offer a dividend yield of 4.58% which is lower than Bell's but they tend to grow it faster than Bell's 5%. Telus has a P/E ratio of 18.2 times and is pretty close to their 52-week high as well.

I personally think this is Canada's best Teleco to own and love the addition of their health segment as well, but it would be nice having more than 1 teleco in the portfolio.

NUTRIEN (NTR)

I sold this one when we needed to buy our first new car at just over 70$. This is a great company with a tonne of potential, especially if potash prices increase. They are the world's largest crop nutrient provider.

The stock currently trades at $67.84 and has been falling since they missed analysts' expectations last quarter. I really hope it continues to fall as I'd love to get back into this one. Morning star has this valued at $79.31 and a really strong buy at the moment. In this market, it's nice to see that. They currently have a P/E of 11.54 and sport a dividend of 3.3% that gets paid out in US dollars. While this is not a proven dividend growth stock, I have a feeling they may just turn out to be one.

3M (MMM)

I figure I'll include 3M in here as well, although it's not as likely to be purchased as one of these other 3. One of my goals this year was to start or increase a position in either 3M, PepsiCo (NASDAQ:PEP), and JNJ. I bought some 3M last month and the stock has continued to drop. This is one of the best dividend growth stocks on the market and currently offers a yield of 3.28% and a P/E of 18.8x

It seems to be getting dragged through the dirt as some people are even comparing it to GE. I bought at 190 and some members were saying I bought too early and they may buy at 165. I thought that was crazy but here we are at 173 and it's still in bearish territory. Good call from them!

Their last couple of quarters haven't been the greatest but this is a solid brand and I think they will continue to do well moving forward.

Time to Make Some Money

Well, there we have it. Our May 2019 - Stock Watch list

4 Stocks that are on my radar to purchase sometime this month. Bell and Nutrien would be new positions for us, while the other 2 would be just beefing up their positions.

I'm curious to hear your thoughts. Especially on the telecoms. Would you be a buyer of either of them at these prices, if so which one? How low do you think 3M can go?

Have a great day.

Cheers!

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.