Tuesday, April 14, 2015

10 Dividend Growth Stocks For April 2015

Includes: ADM • CAH • CMI • CMP • CNP • CNQ • GPS • HOG • IBM • LAZ • MGA • MSFT • QCOM • VZ 

Every month, I use David Fish's CCC list and the accompanying spreadsheet to rank a selection of dividend growth stocks with the goal of identifying a small number of stocks for further analysis. The CCC list, which is updated monthly, contains all U.S.-listed stocks that have raised their dividends for at least 5 consecutive years. The latest list (dated 3/31/15) contains 690 stocks.

I apply a series of filters to trim the CCC list to a more manageable number. Because I have an ongoing goal to balance my DivGro portfolio across all 10 GICS (Global Industry Classification Standard) sectors, I'm careful to retain a minimum number of stocks per sector.

After ranking 66 stocks last month, I'm back to ranking 'only' 50 stocks. For each sector, I find 5 stocks with the lowest PEG ratio and 5 stocks with the lowest TTM P/E. To select the final 5 sector candidates, I use another heuristic, such as dividend yield.

This month, I used a different heuristic to select the final 5 sector candidates. To learn about the heuristic I used and to see the top 10 stocks by rank, please read my article at Seeking Alpha.

10 comments :

  1. You've got a lot of good companies on the list.. I would have never expected to see GAP at the top of the list. Thanks for doing this

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    1. Thanks ADD -- the approach I'm using is selecting good stocks that are, in my view, worthy of further analysis. I usually buy 1 and sometimes 2 stocks from these monthly lists. You can see my "Recent Buy" article about GPS here: http://divgro.blogspot.com/2015/04/recent-buy-gap-inc.html

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  2. I use a similar approach, but not the CCC list. I usually pick the stocks from other investors on their blogs, what they invest in and what they have to say about their stocks and then put those stocks into my watch list where I have a screener which selects the most undervalued stocks. I base that on current earnings, PEG, P/E, EPS expectation and future P/E. Each stock gets a rank and the lowest the rank the most undervalued it is compared to its earnings and future earnings. This month the winner was COP. It took me some time to create the screener and now I am basically testing it to see how that will work in the future.
    So as of now, my portfolio is slowly becoming heavy with energy stocks, but as this sector starts recovering I will slowly stop investing in them and pick another one. We will see.
    Good luck on your investing!

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    Replies
    1. That seems like a nice approach -- I like seeing what other investors have in their portfolios and what they report on buying. My ranking is based on several factors, including some of what you list. The reason I use the CCC spreadsheet is that it contains some valuable additional data, such as payout ratio, adebt to equity ratio, and 3, 5, and 10 year dividend growth rates. Those are the factors I use to create a rank for each of the stocks I consider.

      I wish you the best of luck with your approach!

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    2. I like you using CCC list. Then I get pre-chewed list of good stock candidates without browsing that list hehe.
      My watch list currently contains approx. 200 stocks and I am happy with them and do not think I need to be adding more, but when I find a pearl or any other germ on websites like yours I definitely add it.

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    3. Cool -- I think you meant gem, 'cause you don't want to be adding germs to your watch list :-)

      Have a great weekend!

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  3. I also use CCC to screen, but my set of criteria is slightly different from yours (mostly based on SBI, average yield etc). I do like your 1 year/3 year div growth average to determine acceleration of growth.

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    1. Hi Div4son -- I also use average yield, but indirectly. See my watch list page for details. The 1 year/3 year div growth ratio is helpful, in my view, to pick out stocks that have good recent, rising dividend growth.

      Thanks for visiting!

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    2. Thanks. I currently use 5 year dividend growth - but I think the trend is also very useful further along in the analysis process. I will include this going forward.

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    3. Both are important for different reasons. In my portfolio, I have stocks that have slow but steady dividend growth, but compensate with higher yields. Other stocks grow faster, but (currently) have lower yields.

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