My watch list is organized by sector based on the GICS sector names. GICS is a 4-tiered, hierarchical classification system. It consists of 10 sectors, 24 industry groups, 67 industries, and 156 sub-industries. Each company is assigned a single GICS classification at the sub-industry level according to its principal business activity.
In November 2014, S&P Dow Jones Indices and MSCI Inc announced that a new Real Estate sector will be created, elevating its position from under the Financials Sector and increasing the number of GICS sectors to 11. The change is being considered for implementation on 31 August 2016. The Real Estate Investment Trusts (REITs) industry will be renamed to Equity REITs and will exclude Mortgage REITs, which will remain in the Financials sector.
I've decided to add the new Real Estate sector to my watch list now rather than wait until August next year. Doing so reduces the Financials sector to one that no longer dominates, but it still contains the most dividend growth stocks of all the sectors.
- Market Cap at least $500 million MORE DEMANDING
- No stocks that are being acquired, or over-the-counter (OTC) or pink sheet stocks
- Dividend Yield at least 2% for Challengers, 1.5% for Contenders, and 1.0% for Champions
- Chowder Rule at least 9% (6% for Telecommunication Services and Utilities) MORE DEMANDING
- Yield for MLPs at least 5.5%, or at least 3.5% for REITs UPDATED
Below is a table presenting the new sector targets, assuming a portfolio containing 50 stocks. Currently, DivGro contains 46 different stocks. While 50 is not a firm target, I think a portfolio of about 50 stocks provides more than enough diversification.
|Consumer Discretionary||43||12.29||6||no action||6|
|Consumer Staples||26||7.43||3||add 1||4|
|Health Care||8||2.29||2||no action||2|
|Information Technology||23||6.57||4||remove 1||3|
|Real Estate||21||6.00||3||no action||3|
|Telecommunication Services||7||2.00||2||no action||2|
I'll continue to update my watch list and sector targets every month when the CCC list is updated.