Bert’s December Dividend Stock Watch List: 3 Stocks to Buy!

PUBLISHED Dec 12, 2022, 8:10:39 PM        SHARE

img
imgDividend Diplomats Blog

Check out the companion YouTube video:

https://www.youtube.com/watch?v=pZgKygRa7hM

The final month of the year is usually an insane month for the holidays. Family, food, football….its the best! Let’s make sure that December is also going to be an excellent month for dividend investing as well. Lanny recently published his December Dividend Stock Watch List, featuring 3 great dividend stocks. You know what?! Now it is MY TURN. Here are Bert’s 3 Dividend Stocks to Buy on his December dividend stock watch list!

The month of December was a frustrating month for dividend investors. Many of the discounts we saw over the last couple of quarters disappear. In November, the S&P 500 increased over 9%. The market is once again well over 4,000. The way December is starting, it is looking like it is picking up where November left off.

S&P500 this week

This week, Jerome Powell suggested that the interest rate hikes may slow down earlier than anticipated, causing the market to soar. That, coupled with other headlines indicating that inflation may be easing, left investors feeling great and the market soaring.

Still, despite the increase in the market, there are still plenty of buying opportunities out there. There may not be a ton of screaming buys out there and it may take longer to find them. However, there are many great stocks if you look hard enough and stick to your personal investment philosophy and dividend stock screener. That’s why Lanny and I are ALWAYS building watch lists. To find ways to put our hard earned cash to work. Time to keep focusing on building our passive income stream by buying more dividend growth stocks.

Dividend Diplomat Stock Screener

To find and analyze undervalued dividend stocks, we use 3 SIMPLE metrics to evaluate every dividend stock. The goal of our stock screener is to identify if a stock is an undervalued dividend growth stock to buy.

Watch: Our Simple, 3 Step Stock Screener

Here is a rundown of the 3 metrics of our stock screener:

1.) Price to Earnings Ratio Less than the S&P 500. Currently, the S&P 500 is trading at a P/E Ratio of 19.83X.

2.) Dividend Payout Ratio Less than 60% (Although we think a perfect payout ratio is 40% – 60%). The payout ratio measures the safety of the dividend. This ensures the company can continue growing its dividend during good times and bad. That’s why it is a critical metric in our stock screener that we must evaluate!

Read: Dividend Aristocrats with a PERFECT Dividend Payout Ratio

3.) History of Increasing Dividends. We review this metric by reviewing the company’s five-year average dividend growth rate and consecutive annual dividend increases. Since we are long term investors, it is important that a company increases its dividend consistently!

Bonus: Dividend Yield. We like to also throw in a bonus metric to our dividend stock analysis. Yield does not drive our decision; however, we would be lying if we said we completely ignore dividend yield.

See the video below, for further details and explanation. If you don’t like to watch videos – see our Dividend Diplomat Stock Screener page!

Dividend Stock #1: CitiGroup (C)

Citi

Citigroup has been a staple in my wife’s portfolio over the last year. We started purchasing last year when the price was in the high $50 – low $60 per share range. Once inflation spiked and talks of a recession picked up steam, the company’s stock price fell. Now, like Warren Buffett, my wife and I keep adding slowly to our Citi position. At the time of this article, my wife owns 54.967 shares. She receives over $100 in annual dividend income from Citi. We would LOVE to continue building this position and eventually receive 1 share per quarter via DRIP. Let’s see the metrics.

Citi’s stock price is $47.24 per share at the time of this article. The company’s forward EPS is $6.39 per share and the annual dividend is $2.04 per share. Let’s see how the metrics shake out.

1.) Price to Earnings Ratio: 7.39x.

2.) Dividend Payout Ratio: 31.9%.

3.) History of Increasing Dividends: Citi’s 5 year DGR is 16.27%, although this is slightly misleading. The company has not increased its dividend since the pandemic started in 2020. The dividend growth was front loaded.

4.) Dividend Yield: 4.32%

Bonus.) Price to Book Ratio: .51X (This is extremely low. We consider a bank undervalued if its Price to Book ratio is 1X or 1.1X or lower).

Dividend Stock #2: Qualcomm (QCOM)

Qualcomm

Qualcomm is another tech stock that has been one of my favorite purchases in 2022. Qualcomm dropped into the low $100s a month or two ago. After a recent appreciation in the stock price, the stock price has settled in the $120s per share. Now, we have built our position to 14.122 shares in total. Driving this position up to 20 shares in a short period of time would be SICK.

Qualcomm’s stock price is $125.66 per share at the time of this article. Qualcomm’s earnings per share is $10.23 per share and the company’s annual dividend is an even $3.00 per share. The company’s metrics are as follows:

1.) Price to Earnings Ratio: 12.28x.

2.) Dividend Payout Ratio: 29.3%.

3.) History of Increasing Dividends: Qualcomm has a 5 year average dividend growth rate of 5.52% and has increased its dividend for 11+ consecutive years.

4.) Dividend Yield: 2.39%

Dividend Stock #3: Realty income (O)

Realty Income

One position that I’ve wanted to add to over the last few years, but never have actually purchased is Realty Income. A long time ago, I amassed a position of 121 shares in my Roth IRA. The monthly dividends have been great, adding over $20 each month. This company is the GOAT in the REIT sector and the gold standard for dividend growth investors. Therefore, I continue asking myself…why have I not just increased my position to at least 150 shares!

Realty Income’s stock price is $62.90 per share at the time of this article. Since Realty Income is a REIT, we will use Realty’s Funds From Operations (FFO) instead of earnings per share to evaluate the stock. FFO is the standard metric in the REIT industry! Realty Income’s FFO is $3.99 per share and the company’s annual dividend is $2.98 per share. The company’s metrics are as follows:

1.) Price to FFO Ratio: 15.76x.

2.) Dividend Payout Ratio: 75.6%.

3.) History of Increasing Dividends: Realty Income is a newly crowned Dividend Aristocrat and has increased its dividend for 25+ consecutive years. Realty’s 5 year average dividend growth rate is 3.93% as well.

4.) Dividend Yield: 4.74%

Summary – December Dividend Stock Watch List

Now that we know the 3 dividend stocks on my December dividend stock watch list, what am I going to do? Which dividend stock on my watch list is my favorite? Simple. I actually like all 3 stocks and I’m strongly going to consider adding to each of the positions next week. The metrics are solid. They are great dividend growth stocks. So why not just buy all 3 companies? It seems like a pretty simple answer to me. Sometimes with investing, we need to remember to keep it simple and buy stocks when they are showing signs of undervaluation.

What do you think of the 3 stocks on my December dividend stock watch list? Do you like Citi, Qualcomm and Realty Income? If not, what other stocks do you prefer instead?

Bert

Check out the companion YouTube video:

https://www.youtube.com/watch?v=pZgKygRa7hM

Originally Posted on dividenddiplomats.com

C, Buy

Citigroup Inc
Return: 37.10%

C, Buy

Return: 37.10%


Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
META Lesson 1: Corporate Governance
Image

As we get deeper into earnings season for the third quarter of 2022, the biggest negative surprises are coming from technology companies, with the tech giants leading the way.

December 2022 Stock Considerations
Image

With a new trading month already in full swing it is time, once again, to highlight some of my potential stock purchases.

Which Utilities are Investing in Utility Scale Solar?
Image

We've researched the top public utilities in the U.S. to find the definitive leaders in solar power generation

Hershey (HSY): Dividend Stock Review
Image

Hershey (HSY): Dividend Stock Review. As a dividend growth Investor, the best companies to invest in are quality companies with a history of growing revenues and cash flow to enable them to increase their dividends over time.

10 Top Electric Utility Stocks For Reliable Dividends
Image

Utilities are often a favorite of dividend growth investors as they can provide excellent returns and high-income levels.

The Best Utility ETFs for Income Investors
Image

We breakdown the pros and cons of the most popular utility ETFs and rank them by the best ETF for income investors.

Warren Buffett Stocks: Louisiana-Pacific Corporation
Image

Louisiana-Pacific Corporation (LPX) is a leader in high-performance building solutions. The company manufactures engineered wood building products for builders, remodelers, and homeowners across the globe.

The Safest Utility Stocks to Invest in Q4 2022
Image

We found the top 5 safest utility stocks based on volatility, drawdown, dividend policy, and dividend cuts. Why are utilities safe? We'll explain why.

7 High Return-of-Capital REITs
Image

Real Estate Investment Trusts (i.e., “REITs”) are tax-advantaged income vehicles that have become increasingly popular with investors and institutions in recent years.

November 2022 Stock Considerations
Image

With a new trading month already in full swing it is time, once again, to highlight some of my potential stock purchases.

Skyworks Solutions (SWKS) Stock: An Undervalued Chipmaker
Image

Over the past five weeks, the market has been up 14.7%. Also, after the CPI report was issued last Thursday morning, the market and almost all the stocks had a tremendous run-up. In two days, the market is up nearly 7%.

2 Recession-Proof Utility Stocks With Safe Dividends
Image

The Fed has raised the Fed Funds rate six times this year to combat inflation and the last four times at a 0.75% clip. The current 4% rate is the highest in well over a decade. But the Central Bank has indicated that it will take more pain to get that inflation genie back in the bottle.

WestRock (WRK) A Dividend Stock Comeback Story
Image

Yes, this is a random WestRock (WRK) dividend stock, come back story. Why is it a comeback? WestRock decimated their dividend during the height of the pandemic from COVID-19. One of the world’s biggest, packaging companies reduced their dividend to $0.20 per share, per quarter from the high of $0.465.

AEP to Focus Capital Investments on Regulated Businesses, Reaffirms Operating Earnings Growth Rate of 6 to 7 Percent
Image

Reaffirmed 2022 operating earnings guidance range of $4.97-$5.07 per share and midpoint of $5.02; 2023 operating earnings guidance range of $5.19 to $5.39 per share; Five-year, $40 billion capital plan emphasizes investment in wires and renewables

Southern Company - A Buy but Not Without Risks
Image

We assess Southern Company to be a buying opportunity. For retail investors, this may be a good time to dollar-cost average into a position in SO.

Dividend Kings in Focus: V. F. Corporation
Image

V.F. Corporation is a giant in the apparel industry. The company’s annual sales amount to nearly $12 billion, but the company has humble beginnings. It started all the way back in 1899 and has seen many twists and turns in the 123 years since.

October 2022 Passive Income Update – Lower Dividends, Higher Passive Income
Image

The market decided to climb back up this month and then interest rates rose once again. The narrative hasn’t changed both Tiff and Powell have said they aren’t done raising interest rates in previous hikes. Unfortunately Tiff played his cards first hoping Powell would follow suit with a .5% raise and the US raised theirs .75% essentially devaluing our dollar. Inflation for Canadians should rise on this move alone as it now costs us more to buy stuff in usd.

Procter & Gamble Stock: Recession Resistant Dividend Aristocrat
Image

When volatility grips the stock market, as it has this past year, income investors should focus on quality dividend growth stocks.

Dividend Income Summary: Lanny’s October 2022 Summary
Image

This is what dividend investing is all about! Investing in dividend stocks allows YOU to earn dividend income, the best passive income stream! Bias, you better believe it.

10 Compelling ESG Stocks That Pay Dividends Now
Image

In the world of investing, the goal is always to compound wealth as efficiently as possible. We think the best way to do that is to buy high-quality dividend stocks, reinvest the dividends, and stay the course over a number of years. However, investors can also infuse their own personal preferences or beliefs into their investing strategy, and still make great returns.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Financial Literacy Leaders
user_profile
Tom Hamilton
user_profile
Wise Intelligent
user_profile
Mark Robertson
user_profile
Kevin Matthews II
user_profile
Akeiva Ellis
user_profile
Brendan Dale
user_profile
Kenneth Chavis IV
user_profile
Sharita Humphrey