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.

Metric Screens

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 MidlandADMConsumer StaplesFood Products
AFLAC Inc.AFLFinancialsInsurance
Arrow Financial Corp.AROWFinancialsBanks
Clorox CompanyCLXConsumer StaplesHousehold Products
Enterprise Bancorp Inc.EBTCFinancialsBanks
First of Long Island Corp.FLICFinancialsBanks
General DynamicsGDIndustrialsAerospace & Defense
Mercury General Corp.MCYFinancialsInsurance
MDU ResourcesMDUUtilitiesMulti-Utilities
NACCO IndustriesNCEnergyOil, Gas & Consumable Fuels
Nu Skin Enterprises Inc.NUSConsumer StaplesPersonal Products
Bank OZKOZKFinancialsBanks
Prosperity BancsharesPBFinancialsBanks
Republic Bancorp KYRBCAAFinancialsBanks
J.M. Smucker Co.SJMConsumer StaplesFood Products
1st Source Corp.SRCEFinancialsBanks
First Financial Corp.THFFFinancialsBanks
Tompkins Financial Corp.TMPFinancialsBanks
T. Rowe Price GroupTROWFinancialsCapital Markets
UGI Corp.UGIUtilitiesGas 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:

1 Year Chart CLX

6 Month Chart – CLX

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.