Every year I take a few attributes which may indicate a company is undervalued and run the screen multiple times a year buying very small lots weekly/monthly of those companies. This is the sixth iteration for 2022.
Every time before I run the screen I have a gut feeling as to what I want to buy, for example last month I wrote that
I would only end up buying companies I have a position in and this has more to do with what is going on with the account rather than the market. Specifically, I was assigned 100 shares of MMM @ $133 and as of this post it is currently trading at about $122. My plan is to continue to sell covered calls against it until they are assigned back at or near $133. Since I have about $13,300 of capital tied up with MMM, and purchases are going to be significantly smaller for the foreseeable future. As such, it is easier just to add tiny bits to established positions.
Well, I am still sitting on those shares (selling covered calls) as well as two assigned contracts for INTC. Either way, this time around I am hoping to see larger, stable, non-local bank companies.
2022 Dividend Growth Screen
In January I gave myself the following parameters for 2022:
- The company must have increased its dividend for at least 15 years; and
- Price to Earnings under 15; and
- Price to Free Cash Flow under 20; and
- Earnings per share positive for past 5 years; and
- Sales growth positive for past 5 years; and
- Payout Ratio under 30%
I then cross referenced the 301 companies above with all companies on the Dividend Champion list and part of the Dividend contender list (those that 15+ years of dividends). I was left with the following companies:
Till the end of the year I am going to be buying:
- Chubb – Which I have a small position in (Insurance)
- XOM – Which I have a small position in (Energy)
- WLK – Which I have a Small position in (Chemicals)
- Kroger – New Position (Grocery)