As we watch the market rise and fall, sometimes we see a big drop – the perfect opportunity to push some capital into the market and make some dividend growing investments. However, when this happens, many will watch and become lost in the vast amount of opportunities and potential investments. Which one is the best fit? Which one has the greatest expected dividend growth? These exact queries are the reason it’s so incredibly useful to make or follow a stock watch list every month, so when opportunities present themselves in abundance you know where to put your money.
Following are my picks for the month of May; these stocks are in no way recommendations; they are simply the stocks that I watch throughout the month and am hopeful to allocate capital to if given the chance and opportunity.
My stock watch list follows a simple formula; of which the details can be read below. Things I like are coded in green, while things I dislike are coded in red. Companies which add up to 3 or more points (things I like – things I dislike) have their name coded in green, and are generally considered high-quality assets by me.
Things I like are:
- P/E below 10
- Yield above 4.00%
- Payout ratio below 50%
- 5-Year Yield Growth above 10%
- 10-Year Dividend Growth Streak
Things I dislike are:
- P/E above 20
- Payout Ratio above 80%
Stock Watch List
Our three attractive, high-quality assets this month are:
- Magna International
- High Arctic Energy Services
Again we have some existing positions in the portfolio with Exchange Income Corp., TransAlta Renewables Inc., and Telus.
I have a pretty large position in Telus already built up, but I really like the telecommunications sector. I decided to pit it up against Bell this month and it’s pretty obvious who has the stronger dividend, but Telus’ share price has been stagnating. Regardless, I’m interested in a little bit more.
Magna International continues to garner my interest, but I can’t bring myself to invest in this auto stock. The dividend is low compared to all the other stocks in my immediate radar, but the P/E is so low and reasonable, and the dividend growth is the best out of all the stocks in this list.
You may not have heard of High Arctic Energy Services, but it’s a surprisingly robust energy services company which pays a 5% monthly dividend with an impressive payout ratio of 32%. They’ve raised their dividend every year since their IPO and things are looking great. Unfortunately, it’s a small-cap company so the safety of it is a little bit questionable. Within the energy sector, though, it’s a stellar pick.
If you find comfort in holding a stock watch list through each month, I implore you to subscribe to The Dividend Beginner newsletter, and you will receive my monthly stock watch lists directly in your e-mail inbox at the time of posting.
How do my fellow investors’ watch lists look like? What are you thinking of buying this month? Why?