Sunday, November 3, 2013

7 Dividend Growth Candidates for November, 2013

Every month, I score stocks in my watch list of dividend growth stocks based on my selection criteria. I assign a star rating to each candidate out of a maximum of 7 stars and compile a dashboard of candidates, sorted by star rating.

This month, the top ten stocks are CHL, NTT, CVX, TGH, COP, RCI, INTC, MSFT, PG, and XOM. I already own shares in the highlighted stocks. CHL, NTT, and CVX are 7-star stocks. The others all earned 6 stars.

Because I'm still expanding the number of holdings in DivGro rather than adding to existing holdings, I look for 7 stocks in my dashboard that I don't own yet, for further analysis. The 7 candidates for November are:

Rogers Communications Inc. (RCI): (*******) Telecommunications
Procter & Gamble Co. (PG): (*******) Consumer Staples
ACE Limited. (ACE): (*******) Financials
International Business Machines (IBM): (*******) Information Tech
Murphy Oil Corp. (MUR): (*******) Energy
Navios Maritime Partners LP (NMM): (*******) Industrials
Shaw Communications Inc. (SJR): (*******) Consumer Discretionary

Below is the November dashboard with some of the data used in scoring the candidates:
With the markets near all time highs, it is getting harder to find good value.

RCI trades at about fair value, but has a very high Debt to Equity ratio. It has a superb dividend growth rate, though.

PG makes another repeat appearance in my dashboard. It is trading at about fair value, though its P/E ratio is a little high. I would like to see it drop about 10% to be really interested.

ACE, IBM and MUR have yields below my preferred level of 2.75. They offer strong dividend growth rates, though. ACE is discounted almost 30% to fair value, so it may be worth a look.

NMM is a master limited partnership (MLP). It doesn't have a long history as a dividend payer, so it has a poor confidence score. Dividend yield is excellent, but dividend growth seems to lag behind.

SJR would be more interesting if its price dropped by 10%. Its Debt to Equity ratio is rather high.

I currently have enough cash for only one purchase. Looking at these candidates, I'm not particularly thrilled by any of them. I'd probably look at PG and SJR for reasons of diversification, since I don't own any stocks in the Consumer Staples or Consumer Discretionary sectors. And perhaps, I'll look at ACE, too.

Full Disclosure: Long CHL, NTT, CVX, TGH, COP, INTC, MSFT and XOM

4 comments :

  1. Base on F.A.S.T. graph mur and IBM has the best growth potential.

    ReplyDelete
    Replies
    1. Thanks, FFdividend! I'll take that into account when looking at those candidates.

      Delete
  2. I believe Warren buffet purchased shares of IBM at a higher price than it is currently. Rare thing to say :) Even though things in the tech industry are constantly changing, no one gets fired for picking big blue.

    ReplyDelete
    Replies
    1. Rare indeed. You're not suggesting he made a mistake, right? Just kidding -- I think as IBM goes down, its getting more attractive!

      Delete

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