Hello everyone – I hope you all had a great 4th of July weekend!
I’ve completed my dividend growth stock ranking screen for the month of July! This is a screen that I will run every month that is based on dividend growth stocks from David Fish’s CCC list.
If you would like to read the details about how I run this screen, including the criteria used and how each parameter is scored, please check out my post on the Dividend Growth Stock Ranking System.
In this post, I will only list the results of the screen and mention a few of the stocks that I will be watching closely this month.
It is important to mention that I am not recommending the purchase or sale of any stocks mentioned here. I have not yet researched this list in detail nor have I verified the numbers taken from the CCC list so please do your own due diligence. I will be sure to post any analysis I perform on stocks from this screen.
Dividend Growth Stock Ranking Results
My ranking screen scores all stocks on the CCC list with 10 points possible based on dividend strength, financial strength, valuation and technical analysis (click HERE for details). Green highlights indicate that the stock’s score has increased since last month. Red highlights indicate that the stock’s score has decreased since last month. No highlight means no change in score. A dash means the stock is new to the CCC list.
First off, I apologize for the poor image quality. I am writing this away from home on my laptop and I don’t have the tools that I usually use to make these figures.
As always, many of the stocks on the list are the same as last month. T Rowe Price Group (TROW) tops this list for the 3rd straight month. This time, however, 3 other stocks have tied TROW for the top score: TE Connectivity (TEL), Applied Materials (AMAT), and Lincoln Electric Holdings (LECO). Duke Energy (DUK) was the lowest scoring stock (1.5 points) for the second month in a row.
There were several large increases in scores month over month. I won’t count DSW and ESCA since they did not make it to the valuation round and therefore only had a max score of 8.5 in June.
AMAT jumped 0.75 points but I am leaving them off of my buy list since they haven’t increased their dividend since May 2013. Janus Capital (JNS) scores 2 points better due to a lower PE and increased valuation. Trinity Industries (TRN) went up 1.75 points due to a higher dividend yield and better valuation. Finally, BHP Billiton (BHP) went up 1.5 points due to lower debt:equity and an increased valuation.
The one newcomer on the list this month is Codorus Valley Bancorp (CVLY)
The average score this month was just over 5 points and I always like to mention any notable stocks that beat the average:
- Notable 7’s: BlackRock (BLK), BHP Billiton plc (BBL)
- Notable 6.75’s: Comcast (CMCSA), Foot Locker (FL), Corning (GLW), Canadian National Railway (CNI), ExxonMobil (XOM), Graico (GGG), Kroger (KR), Cisco (CSCO)
- Notable 6.5’s: Old Republic International (ORI), Texas Instruments (TXN), General Dynamics (GD), Harley-Davidson (HOG), Compass Minerals (CMP), Gap (GPS), Johnson & Johnson (JNJ), Emerson Electrib (EMR)
- Notable 6.25’s: Travelers (TRV), Reliance Steel & Aluminum (RS), Chevron (CVX), Microsoft (MSFT), Dover (DOV)
- Notable 6’s: Caterpillar (CAT), Dow Chemical Company (DOW), Afflac (AFL), WW Grainger (GWW), Visa (V)
Top Dividend Growth Stocks By Sector
Many of the high scoring stocks come from the financials sector, leaving the other sectors off of the list. This time around I wanted to be sure to list the highest scoring dividend growth stock from each sector to make sure all of the sectors are represented.
I like all of these stocks except for CNQ since they have a very inconsistent dividend history. The next highest scoring energy stock is Valero Energy Corp (VLO) which received 7.75 points and is the most recent addition to my portfolio.
Also, Shire (SHPG) is a great company but their dividend is a measly 0.26%. Even with a very high dividend growth rate it would take way too long to achieve a decent yield on cost. The next highest scoring health care stock is Johnson & Johnson (JNJ), a much better health care choice in my opinion.
My July Analyze / Watch / Buy List
I will do my best to keep an eye on all of the stocks mentioned in this post along with my extensive watch list, but there are a few that I will prioritize for detailed analysis. Here are the stocks that I am most interested in:
Wal Mart (WMT) – I have a large $65 limit order on WMT hoping to get in with a 3% initial yield. I might start a small position now in case WMT has reached a bottom and my limit order doesn’t get filled.
Southern Co (SO) – Although this stock didn’t rank very well (just 4.5 points), I looked through their annual report and I was very impressed with their new technologies and innovation. I believe they have many potential avenues for growth and some of the issues leading to their low score can be easily resolved.
BHP Billiton PLC (BBL) – 6.2% yield after a massive pullback.
Foot Locker (FL) – Very strong financials, management has set aggressive goals and have proven their ability to meet them. Got burned by setting a limit order on this stock last month. It didn’t get filled and then the stock ran up $6.
Armanino Foods of Distinction (AMNF) – High yield and incredible growth for this small company.
Visa (V) – Waiting for the PE to drop a bit but this is a must-own for me.
Other stocks that I will analyze in detail: THO, QCOM, BLK, BT, CTWS, EMR, DOV, BA, JNS, TRN and PM
There are plenty of other high scoring or interesting stocks in this post that I already own and therefore did not make my buy list. I am always looking for opportunities to average down on quality stocks though so I am always scanning my holdings.
Hopefully I can find some good buying opportunities this month after a bit of a buying drought in June. Thanks for reading and best of luck to everyone in July!
Are any of the top stocks in your portfolio or on your wish list? What stocks are you watching or itching to buy in July? Please let me know in the comments section below!
Full Disclosure: Long TROW, VLO, CMI, UNP, GLW, XOM, ORI, GD, CMP, GPS, JNJ, CVX, MSFT