Screened and Written Sunday February 21, 2021
Every 4 to 6 weeks I create a watch list of possibly undervalued companies that have grown their dividend for at least 20 years. That means when disaster hit in March of 2020, they raised their dividend, when the financial world imploded in 2008, they hit their dividend, and for most of them when the dot com ship sailed (or sank) they raised their dividend. My hope is that one day in the future I will be able to turn on the income stream to supplement either my lifestyle or retirement.
The last screen took place on January 15, 2021, and I ended up purchasing a few shares in GD, SJM and MGRC.
Main Screen – Dividend Stocks with 20+ Years of Dividend Growth
First and foremost, I want companies that have dividend growth in their DNA. As such, I use the Dividend Champion (25+yrs) and part of the Dividend Contenders List (20+ Years). For the past few screens, including this one, this left me with 167 companies out of the 3,500 or so that are publicly traded.
Once I have those companies I can screen them for particular mostly fundamental metrics. Please review my larger discussion on screening for undervalued dividend growth stocks for definitions and thoughts on each:
- The company has to have a P/E under 20;
- A Dividend Yield of over 2%;
- Payout Ratio under 50%; and
- Positive EPS Growth for the past 5 years.
Using FinViz, out of the thousands of stocks that trade on the US markets I was left with 219. I then cross-referenced with my dividend growth list above. .
My Second 2021 Dividend Screen Watch List
Cross-referencing the two lists I was left with the following 20 companies:
|Archer Daniels Midland||ADM||Consumer Staples||Food Products|
|Arrow Financial Corp.||AROW||Financials||Banks|
|Clorox Company||CLX||Consumer Staples||Household Products|
|Enterprise Bancorp Inc.||EBTC||Financials||Banks|
|First of Long Island Corp.||FLIC||Financials||Banks|
|General Dynamics||GD||Industrials||Aerospace & Defense|
|Mercury General Corp.||MCY||Financials||Insurance|
|NACCO Industries||NC||Energy||Oil, Gas & Consumable Fuels|
|Nu Skin Enterprises Inc.||NUS||Consumer Staples||Personal Products|
|Republic Bancorp KY||RBCAA||Financials||Banks|
|J.M. Smucker Co.||SJM||Consumer Staples||Food Products|
|1st Source Corp.||SRCE||Financials||Banks|
|First Financial Corp.||THFF||Financials||Banks|
|Tompkins Financial Corp.||TMP||Financials||Banks|
|T. Rowe Price Group||TROW||Financials||Capital Markets|
|UGI Corp.||UGI||Utilities||Gas Utilities|
I immediately noticed a newcomer to the watch list that I haven’t seen in quite some time – Clorox. Since I haven’t seen the name in a while I wanted to check out the chart:
There has been a clear pull back, with the P/E finally dropping below 20, which made me want to check out the P/E chart for 5 years:
With this pull back, I’ll be opening a position in CLX sometime in the near future.
In addition, I have been watching SJM recently and it seems to bounce between $110 and $120 for the past year or so, if it breaks through that $110 floor I’ll pick up some more.