September 2019 - Stock Watch List

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Includes: BCE, DIS, JNJ, LYB, SU
by: PassiveCanadianIncome
Summary

I stick to my monthly budget for investments and continue to buy something each month.

Stocks I'm really interested at the moment: three U.S. stocks and two Canadian.

With the lack of interest-bearing options out there for investors, dividends seem to be all the rage now.

Hey, everyone.

Another day another dollar. The market keeps doing its thing. Up and downs. Meanwhile the dividends continue to pour in.

Some people say the market is overvalued, but there is a ton of cheap stocks out there. Unfortunately, I don't keep much cash on hand for pullbacks as I prefer to be fully invested. I stick to my monthly budget for investments and continue to buy something each month.

These are the stocks I'm really interested at the moment. Three U.S. stocks and two Canadian.

I'm From Canada, Eh?

Got to love the Canadian stocks. Great for our RESP account and TFSA account. Also, no currency conversion!

BCE - Bell Canada

First on the list is good ole Bell Canada. Earlier this year, we started a position with it in our kids' RESP account. Currently we have 40 shares and would need 80 to enable the stock to drip… That's truly what it's all about, getting that stock to invest in itself. We still need to contribute $2,335 to both our kids' RESP to max this account for the year.

Unfortunately BCE has had a nice run and keeps setting new 52-week highs. Of course, this is a drawback with the rest of the watch list at great values. On the plus side, the government recently tossed us 200 bucks as part of the 20% match.

  • P/E - 19.48 x
  • 52 Week High 63.53 - Current Price 63.30 - 23 cents off 52-week high
  • Div Yield - 5.01%
  • Div Streak - 10 years
  • 5 yr Div Growth Rate - 5.3
  • Moat - Narrow

With the communications sector being my second smallest sector, the government match and end of the year approaching, this may be my next buy. I'd love to get this one to drip for us.

SU - Suncor

If there is one sector that is beaten down right now, the energy sector would be it. While I'm a huge believer in renewable energy and electric cars, I think there is still a place for oil, and the transition away from it will take a while. Let's be honest, these governments are exactly pushing us away from traditional energy.

Suncor is kind of a double-edged sword for me. On one hand, I hate the oil sands. From an environmentalist point of view, they are horrible. I have invested quite a bit into renewables for this reason, but on the other side of the coin is the fact that Suncor takes a lot of money from me.

Me and my wife commute to work about 20-40 minutes a day each, and then run around for kids' activities, etc. So we tend to fill up once or twice a week. Considering we live by "the cheap" gas stations, Petro Canada is the closest, and with that linked RBC card deal, it's a no-brainer.

P/E - 10.89 x

  • 52-Week High $52.92 - Current Price - $39.10 - $13.82 off 52-week high
  • Div Yield - 4.38%
  • Div Streak - 16 years
  • 5 yr Div Growth Rate - 14.6
  • Moat - None

I love to buy stocks that I do a lot of business with, and other than the house, Suncor may be the runner up for regular expenses.

U.S. Stocks

Time to grab that passport and cross the border. Just like black Friday, there are some deals to be had there.

JNJ - Johnson & Johnson

A stock that needs no introduction. Everyone has heard of it! This is a core position for so many of you, and one I have wanted to get into for a long time. You know what? The price is right; Billy Madison was wrong.

Under $130 for JNJ gets me a little excited… Sure it got some pending lawsuits and that's why the stock is at these levels. JNJ has some great lawyers though. They fight the courts, get a judgment to pay pennies, and then say that's too much still.

  • P/E - 21.36x, but I think the forward P/E is like 15x
  • 52-Week High $148.99 - Current Price - $128.86 - $20.13 off 52-week high
  • Div Yield - 2.96%
  • Div Streak - 56 years
  • 5 yr Div Growth Rate - 6.40
  • Moat - Wide

Sometimes you get a fever even more cowbell can't fix. Tylenol may though...

LYB - LyondellBasell Industries NV

This was a company I didn't know much about, but started hearing more and more about it from the finance community in general. LyondellBasell is the world's eighth-largest chemical producer by chemical sales. Pretty impressive! It's also in the basic materials sector in which I lack completely… Its stock price is beaten and its yield is juicy.

  • P/E - 8.15
  • 52-Week High $113.24 - Current Price - $77.60 - $‭35.64‬ off 52-week high
  • Div Yield - 5.43
  • Div Streak - 7 years
  • 5 yr Div Growth Rate - 5.91
  • Moat --

Someone on the Facebook Dividend Growth Investing Group posted a copy of the insider and larger shareholder purchases of more than 500k since August 28th and some guy named Al bought over $56 million in shares of LYB in the last week. Crazy, but clearly Al thinks it's a deal at these prices. Ha, ha.

In case you are wondering (I was) $56 million in LYB would generate 3,040,799.99 dollars in dividends each year...

Close my site now, find Al and copy what that guy is doing. Man is he ever killing it! =)

#WhoIsAl?

DIS - Disney

Disney, Disney, Disney!

Should I even write more? Disney's stream is coming November 12th and it's gonna be massive. No question, we are getting it. Give me its movies and access to sports through ESPN. Only question is will we keep Netflix (NASDAQ:NFLX), too? My wife wants to and I like its documentaries, but if Disney busts out, see ya Netflix!

There is going to be some big costs as it implements this and this may drive down the price, but if the subscriber numbers are fantastic (as I think they will be), Disney is going to run and run. Kids exposed to all their shows will improve park attendance more, and merchandise will fly off the shelves. Reminds me of paw patrol; man, my kids can be spoiled sometimes…

Sure, its dividend is low, and it will probably boost its dividend slightly the next couple years as it integrates this, but then bammmm! Obviously, this is more of a growth play. We currently own 20 shares and would like to pump this up.

  • P/E - 17.88
  • 52-Week High $147.15 - Current Price - $137.89 - $9.26 off 52-week high
  • Div Yield - 1.28
  • Div Streak - 2 years
  • 5 yr Div Growth Rate - 21 but they did cut their dividend by 22.04% in 2016
  • Moat - Wide

September 2019 - Stock Watch list

Well, that is our watch list for this month. Don't let all the noise deter you from investing. There are still quite a few deals out there. Also, with the lack of interest-bearing options out there for investors, dividends seem to be all the rage now.

Which one out of these five would you pick? Chase the yield? Go for the moats? Or you're going for something special that I don't know about? Let me know.

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