During times as volatile as November it's hard not to be dragged along with the craze and go outside of normal investment behaviour. With many investments just sky rocketing in value it's quite tempting to cash in some of them to turbo boost our portfolios - and I couldn't resist a couple of those opportunities - but it's equally important to have somewhere better to invest those funds. With the overall increase in prices it's even harder to find really good dividend growth candidates, but we'll go over the main choices right now according to The Flip rankings.
Based on the fundamentals of the company, the value from owning it and the price (see the overview over the screening method), these are our top investment ideas for a dividend growth passive income portfolio for November 2016:
Target Corp. (NYSE:TGT)
Ameriprise Financial Inc. (NYSE:AMP)
Qualcomm Inc. (NASDAQ:QCOM)
Yum! Brands Inc. (NYSE:YUM)
Of these, Target is a Dividend Champion with more than 25 years of uninterrupted dividend increases (it has 45 years). The rest has between somewhat more modest dividend growth streaks but looks solid with good prospects for future increases. Qualcomm and Yum! haven't been part of the post election rally since November 8th.
Target and Ameriprise has been at the top of the ranking list for quite some time now and it seems as if Target finally has been able to put some if it's problems and controversy behind to be able to continue building its core business. Unfortunately this means that other people also have taken notice of the stock, although I still believe it's undervalued and provides a nice dividend at around $78. It's not often you find dividend aristocrats that give more than 3% in yield.
From all objective statistics and expectations Ameriprise is an exceptional investment candidate, but without having any exposure to the services of the company I don't know how viable they'll be in the future. I don't think they'll implode anytime soon and could very well prosper for another 100 years, but the financial advising and planning market seems ripe for a major change based on individualism and technology and I don't know right now well positioned they are. On the other hand, I believe that the business itself is quite sticky with a high threshold to leave for many of the customers. With decades left for many who retire with a classic nest egg they won't go out of business soon. We keep a small position to diversify our own portfolio but have sold off some after the post election price hike.
Qualcomm is one of the stronger technology companies, exceptionally well positioned for the mobile age and the transition to 5G. I'm impressed with their continuing innovation in all aspects of mobile, vr and radio networks, solidifying their position as the dominant player. The only question is if they are becoming too dominant with even more scrutiny from authorities around the world. With 14 years of dividend growth, more than 3% dividend and a payout ratio of 56% they look attractive as a company with the numbers to back it up.
Finally, Yum! is the dark horse. The spin-off containing Taco Bell, KFC and Pizza Hut is well diversified geographically and seems fine numerically but the market is not especially impressed right now. Could be worth a closer look if you feel that semi-fast food brand name restaurants still have a place in the future (I do, it's just that I rather go somewhere else to eat myself if I can).
Use these ideas as a start for deciding on what investments to do this month, depending on your portfolio and your view of the future of these companies. Even with the increased stock prices there are several good options to choose from for adding to a passive income stock portfolio, and it's never too late to start. It will be exciting to see how the stock market and economy develops going forward, and what opportunities arise to add to our passive income stream.
Disclosure: I am/we are long TGT, AMP, QCOM, YUM.
Additional disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Conduct your own due diligence before investing.