My Stock Watch List For April 2015

lookingAfter a really busy March I’m not sure how much capital I’ll be able to deploy over the course of April, but I nonetheless have a nice list of opportunities for any little dollar worker bees I’m able to put to work.

Most of the stocks I’m going to list below are those that aren’t yet in my Freedom Fund. And that’s really just due to the fact that most of the positionsย in the portfolio are currently allocated to in fashion that makes a lot of sense to me. There are a few stocks like Walt Disney Co. (DIS), Visa Inc. (V), Medtronic PLC (MDT), Realty Income Corp. (O), and Procter & Gamble Co. (PG) that I could see myself adding to, but most of these stocksย currently seem a bit pricey to me, to varying degrees. DIS and PG appear to be the best bargains on that list, however, and I doubt I’d regret buying either one right now when looking out over the next 10 or 20 years.

But I think there are a few other stocks out there that also warrant my attention (and capital) and thus are currently on my watch list for this month.

W.P. Carey Inc. (WPC)

This is a REIT that I’ve had my eye on for a while now. It would really do a great job at filling the gap left by the sale of American Realty Capital Properties Inc. (ARCP) at the end of last year. Though WPC flies under the radar a bit, it’s really an incredible firm. I love the international diversification as well as the diversification across properties and industries. Whereas a REIT like O gives me exposure to a lot of domestic retail, WPC has its fingers in a barrage of international industries from aerospace & defense to government buildings. Their portfolio is high-quality with lengthy lease terms and high occupancy rates. In addition, they provide financing and management services.

The stock is trading for a P/AFFO of 14.28 right now, which is fair. The yield of 5.54% is on par with its five-year average, but would really go a long way toward boosting my dividend income. In addition, they have an 18-year streak of boosting dividends, usually on a quarterly basis. There just isn’t much to really dislike here. WPC is high on my watch list for this month.

Emerson Electric Co. (EMR)

This stock is down more than 10% YTD, which appears to have opened up an opportunity. This is one of my oldest holdings, but I haven’t added to the position in quite some time. This company is an industrial titan, offering products and servicesย that really allow a number of other industries to work correctly. Like my recent purchase of Praxair, Inc. (PX), EMR is one of those boring companies that tends to quietly make a lot of money over long stretches of time. Products like valves, switches, and motors are a hallmark of Emerson’s portfolio.

What perhaps showcases their quality more than anything is their incredible streak of increasing its dividend – 58 consecutive years and counting, which is almost unparalleled. The stock actually seems undervalued right now, with a P/E ratio of 17.62 and a yield of 3.38%. I’m very interested in adding to my position in EMR for the first time in years.

Union Pacific Corporation (UNP)

This is another stock that’s down 10% YTD. Us value investors tend to sniff these stocks out, and UNP has thus popped up on my radar recently. It’s a stock that I wrote about at the end of last year as one I’d love to pick up at a better price and that better price has arrived. Equity in this company would give me a fantastic chance to expand my rail exposure beyond just Norfolk Southern Corp. (NSC) as well as a chance to gain exposure to rail in the western half of the US. I’ve written at length about the competitive advantages that are inherent in railroads, and those advantages appear to be about as ironclad as it gets.

The stock appears fairly valued here with a P/E ratio of 18.62, which is slightly higher than the five-year average. However, the yield of 2.05% is about as good as it gets barring a major correction. The dividend growth streak just recently got extended, with the company announcing its ninth consecutive raise in February. I’d love to be a miniature railroad baron, so UNP remains very attractive to me.

Apple Inc. (AAPL)

One could argue I should have invested in this company a few hundred billion dollars in market cap ago, but it just didn’t suit me for a variety of reasons. First, I’m a bit leery when it comes to tech stocks in general. Second, they just started paying (and growing) a dividend somewhat recently. Third, my portfolio is just now starting to mature, which allows me to branch out a little bit. So the time appears ripe here. Apple isn’t first on my list, but I absolutely wouldn’t mind having some equity in the company. I’m a bit concerned about their potential growth moving forward since we are talking about a company with a market cap north of $700 billion, but I love the products, customer loyalty, and ecosystem. In addition, the Apple Watch looks exciting to me.

The stock’s P/E ratio is 16.88 right now, which is lower than the broader market by a rather wide margin. The yield of 1.50% is a bit low by my standards, but a low payout ratio, massive cash on the balance sheet, huge buybacks, and incredible growth seems to indicate that Apple has plenty of room to continue growing its dividend at an attractive rate for the foreseeable future. They didn’t institute a dividend until 2012, so they don’t have the kind of track record I usually look for. But I might be willing to make an exception for a company of Apple’s otherwise distinction and quality.

Conclusion

This month’s list offers a lot to like across multiple industries. I believe all of these stocks are fairly valued or better right now and all are high quality. In addition, there’s a really nice mix there across yield and growth, which I love.

In addition to these companies, I’m still watching stocks from last month’s watch list that didn’t make the cut due to my limited capital. That includes Microsoft Corporation (MSFT), United Parcel Service, Inc. (UPS) and Archer Daniels Midland Company (ADM). I’m particularly excited about ADM, but, as always, my excitement for purchasing stocks is greater than my capital availability. So many stocks, so little capital.

One other stock that’s kind of a dark horse for me right now is Starbucks Corporation (SBUX). It’s not cheap and it’s been on an absolute tear this year, but the brand is about as fantastic as it gets. I think it would complement my other low-yield, higher-growth stocks in DIS and V quite well.ย But it would be a stretch and I find myself more interested in the stocks discussed above.

Full Disclosure: Long V, DIS, MDT, O, PG, EMR, NSC, and PX.

What do you think of these stocks? What are you watching for April?ย 

Thanks for reading.

Photo Credit: bplanet/FreeDigitalPhotos.net

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117 Comments

  1. Wait, am I at the right blog? First time I’ve been here that there aren’t 100 comments already.

    I am considering the possibility of initiating a position in DLR or EMR, but am not in a hurry. I like the 45 stocks that I’m currently invested in, which includes AAPL, SBUX, DIS, V, O, and PG from those that you discussed.

    Happy Easter!
    KeithX

  2. EMR seems like a good solid one to add to your portfolio:) Apple seems to be a no brainer but can they continue their success over the long term? I guess only time will tell.

  3. KeithX,

    Ha! You caught the article not long after it was posted. ๐Ÿ™‚

    DLR seems like a solid value right now as well, though I’m already allocated as much as I’d like to be there.

    Let’s hope April brings us some even better values!

    Best regards.

  4. Nicola,

    Yeah, I’ve been a happy EMR shareholder for some time now. The stock’s been weak lately, which might just be the opportunity I’ve been looking for. ๐Ÿ™‚

    Tough to say where Apple is going, but they’ve got some incredible products. Not necessarily my favorite stock at this particular moment, but I also wouldn’t mind initiating a position and seeing where it goes.

    Thanks for dropping by!

    Cheers.

  5. I’m liking DIS on that watchlist. It always seems overvalued, but they always deliver on that value. With the upcoming Marvel and Star Wars Franchises putting out great movies for the next 4 years, I feel that the company is just going up from here.

  6. As usual, your watch list is similar to mine! But what else would one expect amongst dividend investors, since we all have basically the same goal?

    Coincidentally, I have been looking hard at EMR this week since my next purchase will likely be from the Industrial sector. Emerson is among the top of the list, but I am leaning more toward CAT right now as that looks very affordable in my opinion.

    I have had UNP in my watchlist for a year now. Amongst the railroads, I like CSX better.

    I initiated positions last month in DIS and AAPL on Loyal3. Amongst the tech stocks though, I still prefer MSFT. It may not have the same upside, but I think it will be less volatile in the long run.

    Kind of an off the radar purchase I made last month was ATNI, a small cap telecom that serves rural areas and the Carribean. I wanted more exposure to that sector, but since T and VZ are two of my larger holdings I wanted to go a different route. Its dividend is currently quite low, but so is the payout ratio and the dividend has been increasing for 17 straight years.

    I was pretty active in March again taking stakes in seven companies: ATNI, AAPL, DIS, INTC, MCD, UL, and PEP.

  7. Ron,

    Tough to bet against DIS. It’s funny, but a lot of people thought I overpaid for DIS in the mid-$90s back in December. I guess that’s why you always want to think independently. ๐Ÿ™‚

    I love where this company is going. Hope to double my position before the end of the year.

    Thanks for dropping by!

    Best wishes.

  8. A very interesting list. Was I not Canadian and looking at an extremely low CAD right now, I’d be all over MSFT as I lack exposure in that sector and the stock seems to have very nice fundamentals and seems to be priced on the cheaper side of today’s market.

    North of the border, opportunities are getting quite scarce out of financials (which make up too large a part of my portfolio right now), but I’m looking at stocks like AGU, SNC and PBH, which trade at reasonable valuations right now and would give me some much needed diversification.

  9. BCS,

    Definitely. There’s a universe of maybe 200 or so really high-quality dividend growth stocks out there, so it’s not uncommon to be looking at similar stocks. ๐Ÿ™‚

    I remember someone mentioning ATNI years ago. Can’t remember why I didn’t like it. But I wish you the best of luck with that one. May it serve you well and pay growing dividends for years to come.

    Nice job there in March. Nothing like deploying a good chunk of capital and adding to the snowball. I hope we both have an excellent April!

    Best regards.

  10. YoungInvestor,

    MSFT does seem pretty compelling here. It’s a cash cow with a balance sheet that’s about as good as it gets.

    I hear you on the Canadian economy. It’s unfortunate that the opportunities up there aren’t as numerous due to the less robust economy. There are definitely some great companies up there, but they’re somewhat limited to the financial, energy, and telecom sectors. However, when the exchange rate is less of an issue, you’ll have a better opportunity to invest elsewhere (like the US). ๐Ÿ™‚

    Thanks for stopping by! Have a great weekend.

    Take care.

  11. Some really good picks here, DM. Some of those companies are also on my watchlist…one thing that I didnt mention in my Outlook is EMR, but remember reading a great post from Chuck Carnevale about how undervalued it is. I still need to educate myself a bit more about the company, but what little I do know about it, it looks like a great stock to own. That track record of dividend raises is fantastic and hard to match.

    Best wishes. Looking forward to see where you deploy your money in April.
    R2R

  12. Dividend Mantra,

    All good companies you listed there. I think SBUX has a lot more to grow. As people become more concerned how they spend their money, I think people will start drinking coffee more instead of going to a pub for beer. Beer at a pub is quite expensive and usually one turns into two or more. At Starbucks the atmosphere is quite good and usually no kids due to the cost of the beverages. The coffee is mostly better than other companies in the same space , and usually draws a better crowd in regards to people behaving properly. At MacDonald’s, people have to deal with young kids being kids.

  13. Jason,
    Nice list of companies. I’ve held PG since 2011 and it hasn’t been exciting, which I’m happy about. It’s definitely one of those plodding, steady div payers that helps anchor my portfolio. I think it’s a reasonable buy right now, but I’m hoping that the market gets a little more down on the stock so I can catch it a couple dollars lower.

    I made two purchases in March, those being EMR and MSFT. EMR was an add. MSFT was a small initial purchase and my first tech stock. I like the way they are heading. Nothing is certain, but the company seems more vibrant now than it has in years. Current yield is as high as its ever been, and like you said… it’s a cash cow. It’s about 1.3% weight for me, and I’m giving serious thought to doubling that. My guess is that they have solid dividends in their future. Thanks for the article. Always interesting to hear which stocks others are thinking about.

    Steve

  14. R2R,

    Yeah, EMR looks like a pretty good value here. I looked at it for a valuation series maybe a couple weeks ago or so and concluded that it’s a pretty good deal… so I added it to the watch list. ๐Ÿ™‚

    Happy shopping in April!

    Cheers.

  15. IP,

    SBUX should continue to do well over the long haul. Great brand with room to expand their store count and prices over the next decade or so. Love the brand. Wish I would have bought six months or so ago, but hindsight is 20/20. Hope to own it at some point, but this is probably at the upper end of what I’d reasonably pay. Shares are probably worth up to $100, but they’d have to continue growing briskly. We’ll see!

    Thanks for dropping by.

    Best wishes.

  16. Steve,

    I’m with you. Boring is beautiful, so PG is the belle of the ball. ๐Ÿ™‚

    Looks like we’re on the same page there with MSFT and EMR. Both are really fantastic companies. MSFT and AAPL both produce a ton of cash flow and also have a lot of cash on their balance sheets. Their cash pile alone is larger than some major companies’ market caps. Crazy stuff.

    Hope I get an opportunity to join you as a MSFT shareholder. We’ll see how the capital looks this month.

    Take care!

  17. PIM,

    Glad to be a fellow shareholder with you in some really wonderful companies. May we continue to collect dividends for years to come. ๐Ÿ™‚

    Cheers!

  18. Jason, as a past Apple shareholder I’ll tell you I regret selling it and have been looking for an entry-point post-spilt. I honestly think its buy-and don’t worry about, as you can get. I also own some MSFT and its a cash cow as you say. I would, own both if you can–don’t let the recent dividend history deter you, every company hast to start somewhere. I consider Apple a booster to a portfolio in the same vein as Visa. Don’t forget Starbucks has a 2-1 spilt scheduled for 2015.

  19. EMR has looked appealing on my watchlist for a while now. The one thing I can’t get past is the rate of dividend growth, though. They’ve had a few years of solid growth in the last few, but others where its growing 0.5-1.0 cent year over year. I can accept slow growth from T because they have an oversized initial yield, but Emerson’s isn’t nearly as generous. The streak of dividend increases is great, but not if the growth itself sucks. Am I just crazy?

  20. Lots of great companies on your watchlist for this month. But like you thanks to capital constraints I’ll maybe be able to make one purchase this month but not much else. There’s just way too many companies I’d love to own but nowhere near enough capital. BDX is another one but I feel it’s pretty expensive right now.

    EMR looks pretty appealing here and I’d like to add to my position. I own some AAPL in my Loyal3 portfolio but it’s definitely not a life changing investment. DIS is probably one of those companies where you just accept that you’ll overpay some unless you buy during a recession. But I expect them to continue to deliver solid results for owners. I’d also like some more rail exposure and UNP seems like a good choice, but CSX and possibly a Canadian rail might be better for diversification purposes. I’m sure there’s time to make my choice. WPC wouldn’t be a bad fit for my portfolio to spread my RE exposure a bit more. I have quite a bit devoted to the healthcare space which should do well over the long run but who knows.

    I feel like recently my watchlist just grows and grows as I find other companies that have great advantages and wide moats. Unfortunately my investable capital doesn’t grow with my desire to own excellent companies.

  21. Sunny,

    They’re definitely both cash cows with a ton of cash on their balances sheet. Cash everywhere you look. ๐Ÿ™‚

    I do worry, however, about how fast Apple can possibly grow looking forward. Law of large numbers and all that. But even if organic growth is quite low, they should be able to provide fairly solid total returns from buybacks and dividends.

    SBUX is another I’d love to own at some point. I don’t want to go too crazy with the low-yield stocks, but I agree that it would complement stocks like DIS and V quite well. I do like having that blend of yield and growth across the spectrum.

    Thanks for sharing your thoughts. Have a great weekend!

    Best regards.

  22. Sokhar,

    Well, Emerson is an industrial company. As such, their operations are somewhat cyclical. That’s why you’ll see one year with a 12% dividend raise and another year with a 3% raise. But I don’t mind that. If management is prudent and sees that as appropriate for operations, then I’m okay with that as long as the growth on the whole is attractive over rolling 10-year periods, which is the case here.

    Cheers!

  23. JC,

    Ha. I hear you. My watch list also grows faster than my cash. First world problems and all that. ๐Ÿ™‚

    BDX is a great company. I still regret passing that one over below $80. Just can’t win them all.

    Best of luck finding the right opportunity for your cash this month. Make it count!

    Cheers.

  24. Ron,

    That actually doesn’t bother me that much. You’re basically collecting the whole dividend in advance. Instead of being paid over the course of four quarters, they’re paying you the entire lump sum up front at the start of the year. ๐Ÿ™‚

    Cheers!

  25. I have most of the stock mention on this article. Currently EMR, MSFT and PM are the best bargain in this market, I bought them all last week along with PG. EMR is the most opportunistic buy here. I am planning to add to EMR on any further weakness and building it into my top 15 position.

  26. Hi Jason,

    Good to see a wonderful list of stocks like this. I’m not a fan of apple, due to 75% of their products having let me down pretty badly over the years. Moreover, as you say, tech stocks make me feel a bit wary of investing.

    However the boring industrial type stocks really interest me, they are solid companies that people don’t get excited about like they do with apple or Disney. This means these companies can quietly go about their business making great profits, without the hype that can suddenly wreck a company’s share price when something goes wrong.

    Cheers

  27. Really like your list. UNP and EMR are also very high on my watch list.

    What do you think of QCOM and BBY? I’m from germany so I don’t know Best Buy. Why is it so cheap (P/E Ratio of 11)?

  28. Hi Jason,

    I appreciate every post that you make! Your blog has inspired me so much that I decided to make my own blog which will hopefully force me to be true to my plans and future investments!

    I will be initiating 2 new positions during month of April, and 1 of those is probably going to be EMR ๐Ÿ™‚

    Your blog is the one I regularly follow. It is very exciting to watch your snowball roll down the hill ๐Ÿ˜‰

    My snowball can’t compare to yours, but I will work harder to make it snow even more!

    Thanks for inspiring!

  29. Great article as always, DM. I just initiated a position in EMR in my taxable account and recently purchased a full position of AAPL in my IRA during the last dip to $122. I think those are two of the best quality values out there. I’d love some DIS, SBUX and more PG but I agree that those are all a bit pricey.

    I’m headed to Siesta Key for vacation this week. I’ll jeep an eye out for you!

  30. Initiated positions in ADM, DD, and PX. All 3 have been on the downside which gives me an opportunity to buy low.

    I was thinking about NSC but majority of their business consist of delivering coal and coal usage has been sliding over the years.

  31. Hi Jason!

    Thanks for sharing your watchlist. I’m able to make one new purchase this month and maybe one in may. I’m thinking T or perhaps BBL next. I know I shouldn’t chase yield but T’s 5,7 % yield sure is tempting. I’d also love to own V and SBUX at some point but I agree that they are a bit pricey at the moment. I’m hoping for a 10 to 20% correction so I could pick those to my portfolio. Have a great weekend and looking forward to the dividend income article!

  32. Hi DM,

    First off, thank you for all of your posts, I check your site daily for motivation to stay on course to Financial Independence. What do you think about the Vanguard Dividend Appreciation ETF (VIG) as an autopilot alternative to dividend growth investing? Right now I own about 45 different stocks and it’s too much for me to keep up with. I think I’ll keep what I have for now, but I like the idea of putting a portion of my portfolio on autopilot.

    Thanks,
    Mike

  33. Mantra,

    Great list. I agree about PG as well – not a bad time ever to buy them really (plus they should increase that dividend in the upcoming week!)

    Also – WPC makes a hard case to not buy them, especially to fill that nasty void with ARCP – great valuation, yield and history of div growth, plus diversification of this REIT is vastly different than O.

    Apple – for the same reasons never bought them – when they paid no dividend, it wasn’t my cup of tea and they haven’t established that dividend history BUT their cash and payout ratios show more than just a promising hope of strong div growth – it’s always intriguing this stock as it’s a “what type of investors buys this”? Are you a dividend investor, growth investor, value investor? Reason being – value investor – P/E is below the market and around 16 shows there’s some value to be had (though Apple – probably always value). From Dividend investor stand point – low yield – high growth – but growth from last div to the current is roughly 7.8% + 1.5% current = 9.3% overall, not bad but also not the best that they could be with such a low payout ratio. Growth investor – well the stock price speaks for itself.

    Tough call, obviously in order – WPC, PG, EMR, APPL is what I see. I like the railroad companies and EMR for sure – but just my two cents!

    Thanks Mantra – SBUX has been a great stock and I bought it for a person that I manage their portfolio around 5 years ago in the mid $30 range, lets say he’s been happy ever since : )

    -Lanny

  34. Jason,
    I follow your blog a lot and you used to always talk about limiting your holdings to 50 companies. Then you just couldn’t help going to 51, 52.. and now you are happy to just keep going.

    I have mixed feelings about this. I realize you are picking companies that you shouldn’t have to do much monitoring on, so a portfolio of 70 or 100 is not a problem per se.

    On the other hand, it is hard to believe that of the 50+ you’ve picked already, none of them are a better place to add $1000 than new firms you can find. I think there might be a psychological factor here, where an investment of $5000 in one firm used to sound huge to you, but you have to adjust for the size of your total portfolio and realize that it no longer is. It’s okay to have a lot of variety in the sizes of your positions. Anything under about 3% of your total portfolio ought to be a candidate for increasing the position, IMO.

    To me, 30 or 40 companies is plenty, and 60 is overdoing it. That’s just a personal preference though.

  35. Thanks for sharing your watch list for April. I’m also interested in WPC, but am leery given the likely interest rate hike later this year. Any thoughts on how the Fed’s decision might impact WPC?

  36. AJ,

    I agree with you there. EMR is probably the best value on the list right now. I’m definitely interested in adding a little to my position there. Almost six consecutive decades of dividend raises kind of speaks for itself. ๐Ÿ™‚

    Glad to be a fellow shareholder!

    Thanks for dropping by.

    Best wishes.

  37. M,

    That’s a shame you’ve had bad luck. I’m actually still using the iPhone 3G I bought way back in 2008. Still use it every day. ๐Ÿ™‚

    But I definitely agree with you that making money doesn’t need to be sexy. In fact, boring is oftentimes better.

    Happy shopping this month!

    Cheers.

  38. mephisto,

    Well, Best Buy is an electronics retailer. I think you have to ask yourself if that’s the kind of business you want to be in and whether or not you think it’ll be flourishing over the course of the next decade or so. I personally don’t like my odds there, and, based on the valuation, it appears that I’m probably not alone. I’m not quite sure how much BBY differentiates itself or adds value, and I don’t personally feel confident in electronics retail. But it could be a fantastic investment. Really just have to ask yourself how you feel about that kind of business. ๐Ÿ™‚

    Take care!

  39. James,

    Thank you so much. Really appreciate the support. So glad you decided to start a blog of your own. There’s so much value in documenting your journey. It’s wonderful to see the progress made over a few months, a year, a few years, etc. Best of luck with both the blog and the journey. ๐Ÿ™‚

    Don’t worry about comparing yourself to me or anyone else. Just compare you to yourself and where you want to be. Imagine where you want to be in five or ten years and then do whatever it takes to meet that future you.

    Stay in touch!

    Best wishes.

  40. andy,

    Sounds like we’re on the same page there. EMR definitely offers some value here, especially for the quality you get in return. Solid fundamentals across the board and one of the most impressive dividend growth streaks in existence.

    Apple’s coming up on a dividend raise. You got in at a great time there.

    Hope you enjoy your vacation! I don’t live too far from Siesta Key. Maybe we’ll bump into each other! ๐Ÿ™‚

    Best regards.

  41. Sam,

    Nice buys! ADM continues to circulate for me. Really great business, and that last dividend raise gives me a lot of confidence.

    I bought NSC quite a while ago now after the stock tanked on coal worries. But they’ve done well for me and they have a fairly diversified business there beyond just coal. But I’d also love to own UNP not just for its lesser coal exposure, but also its geographical diversification for me. We’ll see!

    Thanks for dropping by.

    Cheers.

  42. Sampo,

    Best of luck deciding. You’ve got a couple of great businesses there. I bought T not too long ago. The FCF is pretty tight there with the dividend, but less spending and the DTV acquisition (if approved) should bolster their prospects.

    But I’m also hoping for a 10%+ correction. Monday would be nice! ๐Ÿ™‚

    Thanks for sharing. I don’t think you’ll go wrong with either one, but BBL appears to be the better value to me.

    Take care!

  43. DM,

    Does having a limited amount of capital to deploy each month help or hinder your decision-making process?

    If you were to start from scratch with $200k to invest, what problems would you encounter when allocating your funds?

    Full Disclosure: Long Champagne Problems

  44. Mike,

    Thanks so much for the readership. I value every reader immensely, which is why I take so much time to provide the best content I can while also doing my best to answer questions.

    As far as VIG goes, I specifically addressed the idea of buying it versus buying individual dividend growth stocks:

    https://www.dividendmantra.com/2013/04/why-i-vastly-prefer-dividend-growth/

    It looks like the income dropped in 2013 compared to 2012, so some of my concerns there were justified.

    That said, investing in individual stocks isn’t for everyone. Buying a fund and forgetting about it makes sense for a lot of people, even considering the potential drawbacks. From what I’ve seen available, however, it appears to me that SCHD would be the better overall choice.

    Hope that helps! ๐Ÿ™‚

    Cheers.

  45. Lanny,

    Thanks for sharing your thoughts!

    Yeah, WPC is very appealing to me right now. I love the valuation, yield, track record, property diversification, and geographical reach. And I’ve been meaning to plug a hole for a while now. Might be the right time. If rates rise later and WPC’s stock price gets thumped, then that would just be an opportunity to buy more.

    Apple is an enigma, and almost because it hits on all levels. Though, I can’t imagine growth moving forward will be anything like what the firm experienced over the last 10+ years. It’s just massive now. But there’s a lot to like there, especially with the enormous free cash flow (almost $50 billion!!) and cash on the balance sheet. Anxious to see what the next dividend raise looks like, which should be announced within the next few weeks.

    Thanks for dropping by. Hope you’re having a great weekend!

    Best regards.

  46. Grant,

    “Thatโ€™s just a personal preference though.”

    Right. I think that’s basically what it boils down to. Is Apple a worse idea than AT&T? Is Union Pacific a worse idea than Coca-Cola? I have a very hard time believing that someone’s 30 best ideas are all there is out there, or there are only 50 or so high-quality companies one can possibly own. But I’ve discussed that ad nauseam before, like here:

    https://www.dividendmantra.com/2014/11/is-managing-a-large-dividend-growth-stock-portfolio-time-consuming/

    And, in the end, I’d rather collect income from 100 companies than 30. It’s all about managing the risk of income loss. And one’s odds would seem better with a larger pot of high-quality businesses.

    Cheers!

  47. James,

    I don’t really bother to worry about interest rates. If someone can predict rates and what it’ll do to stock prices, make sure you steal that person’s crystal ball for yourself. ๐Ÿ™‚

    Best wishes.

  48. TDE,

    We can dream of such problems, right? ๐Ÿ™‚

    If I were to come across $200k right now, I’m not sure I’d be able to find enough attractively valued stocks to deploy that much capital all at once. At least, not from the perspective of building the kind of portfolio I’m after. DCA is what I know and I feel pretty comfortable with that, so that’s probably what I’d do. It’d also give me time to really research companies and pick my opportunities. Someone who just invests $200k all at once is obviously not doing enough research to make an educated decision, unless they’re just buying the market or something.

    Cheers!

  49. mephisto,

    I wrote an article on QCOM’s quantitative valuation not too long ago:

    http://dailytradealert.com/2015/02/08/undervalued-dividend-growth-stock-of-the-week-19/

    That said, I’m not a huge fan of the tech sector in general, so I’m probably the wrong guy to ask about some of these stocks. My idea of investing in tech is to selectively and carefully spread a few small investments (relative to one’s portfolio) across some major players so as to hedge one’s bets. QCOM is basically a play on smartphone chips and patented licensing. So that really depends on how knowledgeable you are in that space and how comfortable you are. I would say I’m less comfortable there than some of the other companies I’ve already highlighted. Just my perspective. QCOM might work great for you, however. Only you can make that call.

    Cheers.

  50. “In probability theory, the law of large numbers (LLN) is a theorem that describes the result of performing the same experiment a large number of times”

  51. Jason,

    Great list and I do not think you could go wrong about investing in any of these companies. WPC is an interesting candidate and would slot in very well to the hole that ARCP left in your/all of our portfolios. But the one thing I promised myself I would review when considering REITs in the future in lieu of my ARCP sale was the long term dividend history to show that management is committed to paying a steady, growing dividend. I would say 18 years are enough to check that box off of my lest and focus on the fundamentals. I haven’t looked into them too much, but their diversification in location and types of properties based on your research is very intriguing compared to other narrowly focused REITS.

    I am a fan of EMR as well. Boring = great to me, and I would be glad to invest in a boring dividend growth company any day of the week. I am always hesitant for tech stocks, which is why I have always stayed away from Apple and others in the past. My first jump into tech stocks was IBM last year, which is more of a step into the shallow end than a dive into the deep end. But they have a lot of capital and have faced pressure to increase buybacks and dividends with their piles of cash, so whether or not they deliver in the showroom they have the tools to find different means to reward shareholders.

    Lastly, I have always wondered about stocks that have been on a tear such as SBUX and V. What I am toying around with is the question of “Is there really ever going to be a good time to buy them at a value?” I could tell myself that I want to invest in these growth stocks the next time there is a pullback only and never end up purchasing the stock. Since they are such great companies, do we just suck it up and buy them at their current premiums and jump on the train for the ride?

    Great watch list. I’m glad to see we have some names in common. Keep up the great work and enjoy the beautiful weekend. It looks like we are finally turning the corner and hitting spring, just in time for baseball season!

    Bert

  52. That makes more sense Jason, yes. That theory seems to imply that because apple is worth 750bil, it will have a hard time growing in the future, right? As I take a step back and look at market share figures on each of their product lines (iphone, Mac, iPad) what I see is extremely low market share figures (15%, 7%, 27%) for their said markets that they compete in (mobil, PC, tablet). I have a hard time relating that theory to this company. I don’t know, but it looks to me that they operate in enormus markets and have the potential to increase market share in each of their product categories in a big way. Factor in 37-39% gross margins and it sounds like a recipe that could turn out rewarding in the future…

    Just my two cents.

    Regards

  53. I want to add to or initiate a position in every single one of these names! I’ve avoided AAPL until now, but I have a friend who has been buying it for years and he was very right and I was very wrong so far! I’m pretty light on most of these sectors, especially consumer names, tech, and reits. Ideally I’d love for PG to drop below $80 and just pile more into that sure and steady grower. I think you’ll do very well with whichever of these you pick and it’s always great to hear your thoughts and insight before you actually make the moves. Thanks for sharing, Jason!

  54. Great list Jason. I’ve been looking at EMR for a few months now. I want to add this stock, but I need to learn more about the company first. I’m torn between adding either TROW or EMR. The $2 per share TROW gift, makes them attractive to me.

  55. Bert,

    I’m with you on track records there. WPC passes with flying colors for me, though, with that lengthy dividend growth streak. I really love the diversification across geographies and properties, so this one is definitely on my radar.

    As far as stocks with higher P/E ratios, you have to really consider whether or not you believe they’ll continue growing at a certain rate. In the end, the P/E ratio is just a function of how much you’re willing to pay for future profit based on what the company has already booked. So you’ll want to consider the PEG and what not, but I’ve found that high-quality firms are generally worth paying at least a fair price for. I wouldn’t go too crazy in regards to paying premiums, but that’s really subjective. I took a look at SBUX’s valuation not too long ago and I think there’s a case for $100/share… but that’s probably on the top end. In the end, you’re forecasting growth, and that can be extremely difficult and subjective. But I have found that many of the stocks with somewhat lower yields but higher growth rates have been better holdings for me in terms of total returns. So it just depends on how much income you need now and how much you might need in the future, as well as how much you think those payouts will grow over time. And that’s exactly why I like to blend my holdings across the spectrum of yield and growth.

    Thanks for dropping by! Have a great weekend up there.

    Cheers.

  56. Cj,

    Well it’s a phenomenon that’s been observed in larger-cap stocks. So one would have to think that a company worth, say, $20 billion has a greater opportunity to double than, say, Apple at over $700 billion, all things being equal. But rarely are all things equal.

    As far as Apple goes, that’s the reason why you see that more reasonable valuation on shares these days. The growth is rightly expected to slow down, but that doesn’t mean it won’t be an attractive holding. The company needs very little core growth to deliver more than satisfactory total returns and dividend growth when factoring in the buybacks, strong FCF, and cash on the books. And the reasonable valuation just seems to amplify what’s possible due to the low risk of overpaying. We’ll see how it goes!

    Take care.

  57. Ryan,

    Yeah, I’ve definitely been wrong on Apple as well, but it really wasn’t even a candidate for me up until very recently. It just so happens that they’re starting a dividend policy after becoming such a massive company, which is somewhat uncommon across the more regular stocks we follow. But the fundamentals are obviously pretty incredible and I love the ecosystem there.

    PG’s a great stock. A little curious on how some of these divestitures will work out for them in terms of focus and growth. I have a decent position there, so I’m not really anxious to add on, but I also wouldn’t mind one more tranche. ๐Ÿ™‚

    Thanks for dropping by!

    Best wishes.

  58. DD,

    TROW’s a great stock. Not on my watch list only because I recently picked up enough shares to consider it a position and track it from here. I’d like to eventually add some other asset managers around that position as well. But I don’t think you’d go wrong picking up right now. ๐Ÿ™‚

    Have a great weekend!

    Cheers.

  59. I am pretty exposed to consumer staples and energy. Looking to find some health care and industrials.
    BDX- too expensive
    ABBV
    UTX
    UPS
    UNP
    EMR
    GE
    MMM- too expensive
    I am also looking for some more financials like
    EV
    BEN
    WPC
    JPM
    TROW

    Always enjoy sharing my thought,
    Khen

  60. I have 330 shares of AAPL at a cost basis of 88.50 per share. I have 250 shares of DIS at 106 per share. I am looking for DIS to get closer to 100, then buy more.

  61. Nice way to look at it! I was looking at it from a different angle. I gotta wait an entire year to get that dividend. But I like your angle better: They’re paying you at the beginning of the year!

    Thanks for bending my mind!

  62. Great watch list! I’m an EMR shareholder myself. Hope to have you aboard soon.

    Like you, I’m not a big fan of tech stocks. And I won’t be buying Apple anytime soon (the irony here is that I’m typing this on my iPhone 5C). It’s too much into consumer discretionary; in an economic downturn, companies like Apple will get hit hard. The only tech company I really like (and own) is IBM. Their products and services are necessary for the day to day operations of many businesses. I use at least two separate IBM software products at work.

    This isn’t to say Apple is a bad company. Far from. But technological paradigms change every few years–not everyone used to have a smartphones. Will Apple be able to adapt to a new technological world where smartphones are obsolete. I don’t know; they are still relatively young and untested. But IBM? They’ve been doing that for 100 years! And like the rest of my portfolio, I look to put my money in stuff people need rather than want.

    I’m not trying to get you to change your watch list, Jason. Apple is a great company. But like you, I’m just weary on tech. Who knows if the companies that are big today will even be around tomorrow?

    Sincerely,
    ARB–Angry Retail Banker

  63. Solid list of names. My vote from the list is EMR. As far as a REIT WPC looks as solid as HCP to me and might even make my list too. I just posted my April picks and am looking (no surprise) at TD, BNS and RY. But I also am looking to add another new name that has been flying under the radar and has a great dividend history with DOV. I’m curious to get a reading from other dividend bloggers about DOV. Thanks for sharing you list.

  64. Khen,

    Thanks for sharing your list. Much appreciated! ๐Ÿ™‚

    Looks like were’ on the same page there with a lot of those stocks. I’d also like to increase my exposure to healthcare. Still waiting on the right opportunity/opportunities there. All in due time, I suppose.

    Have fun shopping. That’s a big list. Should be fun!

    Best regards.

  65. WMX,

    I’ll trade you DIS positions! ๐Ÿ™‚

    I’d like to see DIS trade back down to $100 as well. Not sure we’ll get there or not, but I do hope to increase my position in the company at some point this year. Wouldn’t mind doubling it, even with the low yield. In the meanwhile, I won’t feel too guilty shelling out money to see the next Avengers and Star Wars movies.

    Cheers.

  66. ARB,

    I’m a fellow EMR shareholder as well. Like I mentioned in the article, I initiated my position years ago. But this might be a good time to add to my 60 shares here.

    I hear you there on Apple. Don’t forget, however, that they’ve adapted as well. They’ve been around for 40 years now and have done pretty well across the spectrum. Of course Jobs was a major driving force behind that, though. How much they’ll be able to adapt in the future is anyone’s guess, but that’s the risk you take with a lot of companies out there. It just seems to be exacerbated with tech companies, though I almost look at Apple as a hybrid consumer discretionary stock. Not sure what smartphones will look like in 10 or 20 years, but communication isn’t going anywhere. And the ecosystem they’ve built is admirable. We’ll see how it goes!

    Thanks for dropping by. Hope you’re having a great weekend!

    Best wishes.

  67. DH,

    I actually wrote about DOV not too long ago:

    http://dailytradealert.com/2015/01/19/this-stock-has-increased-its-dividend-for-59-consecutive-years/

    Great fundamentals across the board with some really interesting business units. Reminds me a little of ITW in the way they operate all of these businesses somewhat independently. Definitely a company I’d love to own at some point.

    Thanks for dropping by. Happy shopping this month. Those Canadian banks remain pretty attractive right now.

    Best regards!

  68. I think Apple would attract many more investors looking for long term cash flows if they increased their dividend. I wouldn’t be interested in a yield of only 1.5% but a bit higher and I would be as I think they can still grow long term. Did you buy JNJ on the recent dip?

  69. Very interesting watchlist, Jason! UNP and WPC are two stocks that weren’t on my radar but after reading your post, I’ll definitely be keeping them in mind moving forward.

    Apple is a tricky stock, isn’t it? The more we delay buying it, the more it seems to appreciate just to spite us ๐Ÿ˜›
    Though in all fairness, it is easier today for someone who bought Apple stock a while ago to claim that the purchase was a good choice than it would have been back then. As they say, hindsight has a way of always being 20/20.

    That being said, like you I do feel that there are a few stocks such as Disney, Visa, MasterCard, American Express, and Apple itself that don’t necessarily fit the typical dividend stock profile (e.g. a yield of at least 2.5%) but still have a good place in any dividend portfolio for their exceptional qualities and potential.

    Thanks again for the list, it was an interesting read!

    Cheers
    – Alex

  70. All solid choices. Of the four you mention, I think AAPL is the best value, followed by EMR. UNP is still overvalued to me, and I don’t follow WPC any more. I think AAPL is a very reasonable choice. I personally don’t like their products; however, I can’t deny that they are simple, clean, elegant, and secure. Their customer service is very good, and the ecosystem they created between all their hardware, software, and services (iTunes, iCloud, Apple TV, iPhones, Macs, all of those fun things) is extremely impressive. As an investor, I love the customer loyalty, recent earnings trend, and ability to generate impressive FCF for every iteration of their products. Plus, I consider them pretty undervalued. Whether or not they’ll be around in 50 years is debatable (I think they will be). However, if you go into the investment with the right mindset (not treating it like a JNJ or PG), I personally believe it will be a great one. FWIW, it’s one of only two tech companies still on my watchlist, and the only one I consider a personal “must-own” (the other is ORCL). I hope to be long by December myself. Just the opinion of your everyday software developer and general techie.

  71. Jason, my question is more on the personal side. Why aren’t you as interested in adding to companies already in your portfolio?

  72. Dan,

    I agree. The yield on Apple is a bit of a stretch, though there are a lot of high-quality stocks out there (that also look to be excellent long-term investments) that offer a similar yield. DIS, NKE, and SBUX come to mind. I even stretched for Visa, which is lower. But I’d like to think that these stocks will be providing significant income 10 or 20 years from now. One’s interest largely depends on their time frame and how much they think these companies will grow.

    I have’t been interested in buying JNJ shares in a long time. My 100 shares will likely be all I’ll ever own. That should be enough for the rest of my life, as the growth of the dividend and shares should allow it to remain a large weighting within the portfolio for a long time to come. We’ll see. If shares drop down 30% or 40% or something crazy due to short-term problems reminiscent of the recalls I might be interested. Otherwise, I’m still building the rest of the portfolio around that position.

    Cheers!

  73. Alex,

    Hindsight is indeed 20/20. Apple worked out great. Some similar stocks – like Blackberry – didn’t.

    I definitely like to invest across the spectrum of yield and growth, as I described here:

    https://www.dividendmantra.com/2014/06/a-multistage-rocket-model-for-a-dividend-growth-stock-portfolio/

    V, DIS, and AAPL are those Stage 3 stocks that can provide significant dividend income 10 or 20 years down the road. And the Stage 1 and Stage 2 stocks can provide the capital necessary to get that rocket into outer space in the first place, as well as the income necessary to provide the rocket with that Stage 3 growth. That’s how I look at it. ๐Ÿ™‚

    Thanks for dropping by. Glad you’ve got a couple of other stocks on your radar now.

    Best regards!

  74. Hello Jason and others!
    What price do you think it’s good to purchase T and WFC?
    Thanks!

  75. DD,

    Thanks for the thoughts. Always appreciate the insight from someone in the industry! ๐Ÿ™‚

    I think Apple shares make a lot of sense here. The valuation appears reasonable, they’re still growing at a robust rate, and the fundamentals across the board are excellent. A new product, an upcoming dividend raise, and plenty of cash being returned to shareholders all bode well. And I’m also a big fan of the ecosystem there, as I’ve mentioned a few times. Once you buy a product within their universe, it’s likely that you’ll not only stay in that ecosystem, but that you’ll also buy additional products/services.

    We’ll see how much capital I have this month. I hope to have a crack at a couple stocks. ๐Ÿ™‚

    Thanks for dropping by!

    Cheers.

  76. Justin,

    I addressed that question at the outset of the article (in the second paragraph):

    “Most of the stocks Iโ€™m going to list below are those that arenโ€™t yet in my Freedom Fund. And thatโ€™s really just due to the fact that most of the positions in the portfolio are currently allocated to in fashion that makes a lot of sense to me. There are a few stocks like Walt Disney Co. (DIS), Visa Inc. (V), Medtronic PLC (MDT), Realty Income Corp. (O), and Procter & Gamble Co. (PG) that I could see myself adding to, but most of these stocks currently seem a bit pricey to me, to varying degrees. DIS and PG appear to be the best bargains on that list, however, and I doubt Iโ€™d regret buying either one right now when looking out over the next 10 or 20 years.”

    Take care.

  77. I really like AAPL on your watch list, I will have enough capital to make a purchase next week for the first time in two months. I have all but finalized that it will be AAPL. I don’t necessarily time the market, but I recall the missed opportunity last year during April earnings where they announced the 7:1 split and the stock jumped up 10% overnight then it continued to roar about another 30% the rest of the year after that.

    I like it for a few reasons. 1. its PE is at a reasonable level of 16.9. 2. Everyone buys there stuff and the iWatch which comes out soon will diversify their current product line which will assuredly generate more revenue 3. The main reason I really like it is the FCF: EV number. I have recently looked into all sorts of metrics for evaluating stocks and PE really wasn’t doing it for me as some companies seem overpriced in PE terms. FCF:EV basically tells you how quick the company can pay off all of its debt and shareholders with all the cash that is coming in. AAPL has one of the lowest ratios in the game at 16.2 and this number becomes even more impressive when you consider the sheer size of the FCF at 59.7B. As long as revenues and expenses don’t deviate extremely in the wrong directions then this stock should be a really solid dividend payer and grower for years to come based on its current numbers.

    Like any other metric you should evaluate what is driving the metric and a lot of oil stocks look cheap in this regard, but there is a strong chance oil companies TTM of FCF will decline dramatically due to the drop in oil’s price. This will assuredly raise their FCF:EV ratio as we cycle through the year.

  78. Selena,

    I think T’s valuation right now is attractive enough to pull the trigger. I purchased shares not long ago myself. However, I did value the shares with an 8% discount rate, so that’s something to be mindful of. Depends on your expected returns and valuation model.

    I haven’t looked at the valuation of WFC in some time now, as I don’t have any immediate plans to add to my position there. It looks to be at least 10% too expensive, from where I’m standing. The planned new dividend payout along with a 10% drop would offer a lot more to like here.

    Cheers!

  79. TDM,

    Thanks for sharing your thoughts there!

    Yeah, I agree Apple seems to make a lot of sense here. And I continue to look at it less as a “tech” company and more as a company that simply sells consumer products. The fundamentals, as you point out, are really extremely strong. Not only do they produce prodigious FCF, but they have a ton of cash on the balance sheet. When you count all cash on hand along with long-term marketable securities, they could afford to buy out a $100 billion company and still have money left over. Of course, I rather look at that as all the opportunities they’ll have in the future to return value to shareholders through buybacks (which they’re performing aggressively) and increased dividends.

    I might join you as an upcoming AAPL shareholder. We’ll see what kind of opportunities I have this month. ๐Ÿ™‚

    Best regards.

  80. I have nothing but good things to say about AAPL as a shareholder. I bought in at a good time (January 2014) prior to the split (approximately $78 pre split price), and have seen significant capital appreciation and solid dividend growth. I am confident that AAPL can easily grow their dividend for many years to come, lots of room for increases and share buybacks.

    Currently, I only have BBL on my watchlist and have decided it is most definitely a strong buy at these price levels. I am hoping with expected market volatility in April and May, the share price will remain at similar levels in a few weeks when I have enough capital to purchase. What are your thoughts on BBL and the South32 spinoff? In addition to the attractive valuations, this spinoff is another item that has me very interested in purchasing some BBL shares before the spinoff takes affect. I have heard mixed analyst opinions on South32’s prospects moving forward, although you can’t complain about getting these shares for free through BBL, so I treat this as a no-risk, high potential reward play.

  81. Change the word ‘might’ to you will! APPLE is not going anywhere and is truly a one of of a kind company. I agree with Tim Cook, buy it for the long term. I can’t name another company that has people camping out in the streets for weeks all over the world before product launches. Apple and its CULT following are here to stay….

  82. My railroad situation is much like yours. I’ve owned NSC for a few years, and I’ve been stalking UNP with a covetous heart but it always seems to be too expensive. If UNP fell below $100 I’d be a buyer. Here’s hoping more for a broad market decline!

  83. And please listen to the conference call – 4/27 at 5pm ET. I’m sure you will be amazed, like I am quarter after quarter ๐Ÿ˜€

  84. Winston,

    You’ve done really well there with Apple. It’s amazing that a company as large as they are is still growing so much, but even if organic growth were to slow considerably, they should still be able to provide really solid total returns and dividend growth. I can’t see iPhones, iPads, and iEverything Else disappearing anytime soon.

    BBL seems like one of the best values on the market right now. That’s something I discussed quite a bit toward the end of last year as I built up my position. The South32 spin-off is great because you’re right in that there’s really no risk – the shares are coming free. I would say that BBL as a whole is a risky/volatile investment, but the spin-off could go to $0 and it wouldn’t make a difference from here. The stock dropped so much after the news of the spin-off that the market seems to be valuing it at $0 anyway. Meanwhile, they’re expected to pay a dividend of their own. All in all, I’m happy. ๐Ÿ™‚

    Best regards!

  85. Jim,

    Yeah, I’d love to see UNP below $100. I doubt $100 or $107 will make a big difference over the course of the next 20 or 30 years, but cheaper is always better. I happen to think it’s roughly fairly valued here. I remember getting a pretty good deal on NSC, so I’d love to see something similar again with UNP and/or the rest of the railroad companies. CNI is another great railroad that I’d love to own at some point.

    Cheers!

  86. Great list of stocks and looking forward to seeing you as a fellow AAPL shareholder. Apple has been one of my earliest holdings that I purchased even before Apple instituted a dividend. Now with dividends (and dividends growth), buybacks and share appreciation, I am a happy shareholder.

  87. Emerson is one of those companies that history has shown that they are a great investment. Currently, I am down quite a bit on the stock so I too have that on my watchlist to buy more. I like the MSFT idea still after the drop. $40 for them looks good.

    Look at you adding AAPL to the mix. I never would have thought I’d see the day haha. I wish I would have held onto my shares from back in the day, but you live you learn.

    Overall, seems like you’ve got some good picks to choose from. Looking forward to reading the next Recent Buy post to see which one you choose.

    Great job on the dividend income too!

  88. DGJ,

    Apple has been a dynamite investment. Glad it’s worked out so well for you. If I could only go back in time and pick up shares on the cheap back in 2000 or so. A guy can dream! ๐Ÿ™‚

    Hope to join you as a shareholder at some point. I think I’ll end up picking this stock up sooner or later. Just a matter of time and capital now.

    Cheers!

  89. ADD,

    Emerson is a great company. Excellent dividend growth history that’s unlikely to change any time soon. I like the idea of adding here, but it would be averaging up for me. That said, the valuation, yield, and growth are all appealing. We’ll see!

    Yeah, I’ve warmed slightly to the idea to adding some tech to the mix. Part of the reasoning there is that my portfolio is quite a bit larger now than it was just a couple of years ago, so there’s some room there. In addition, I like the idea of a few small, strategic bets across some of the major players in tech. AAPL would work for that. MSFT as well. I’d probably not really go much further than that. And all of them would be rather small investments, relative to other positions and the portfolio as a whole.

    Thanks for all the support. You’re doing great over there as well. Keep it up!

    Best wishes.

  90. OK, so I have a question for you, since you seem pretty knowledgeable about REITs.

    They’re lumped in with the MLPs as publicly traded passthrough entities and seem to have a very similar taxation structure to PTPs/MLPs–payouts decreasing cost basis, distributions instead of capital gains, passive activity restrictions on gain/loss, etc.

    I have one MLP and while it’s been a fun intellectual exercise to figure out its taxes, it’s sucked up more time than I ever planned to spend. REITs look interesting but is it another mess of a K1 with extra state taxes to boot? If REITs were that complicated I can’t picture you 1) holding them this long and 2) wanting another, given your preference for “keeping things simple.” And I think you mentioned specifically picking OKE over OKS to avoid holding an MLP. So why/how are REITs simpler than MLPs?

  91. Jana,

    Right. I prefer GPs for a few reasons, not the least of which is the easier and more favorable tax situation there. I’ve heard from numerous investors that K-1s are a major pain.

    REITs haven’t really given me any trouble, however. There is no K-1 to worry about. The major difference between a REIT and a normal stock is that the cost basis on a REIT slowly gets reduced via dividend payments due to the way REITs are pass-through entities. In addition, the dividends aren’t qualified, so they’re taxed at ordinary income rates. But my brokerage, Scottrade, keeps track of the cost basis on all of my REIT holdings since they’re required to. So it doesn’t really bother me.

    You may want to look into some reading on REIT taxation. The books I’ve recommended include some of that information. In addition, this article might help:

    http://www.investopedia.com/articles/pf/08/reit-tax.asp

    Hope that helps! ๐Ÿ™‚

    Best wishes.

  92. yoghurt,

    I’m sorry. I don’t track LYB and I’ve never taken a look at it in my life. So I can’t really give you an informed/educated opinion on it.

    Cheers!

  93. I agree DM, and their total shareholder return is fantastic as over the past decade they have grown revenues by 3.55% while reducing total share counts by 1.7%. Add those to the current dividend yield and 10 year returns are around 9%. In addition they have increased their gross margin on that revenue by nearly 6% over that same time frame!

    10 year div growth 7.5%

    Sleep-easy purchase right there.

    I just picked up 60 shares today. Glad to be a shareholder with you!

  94. EMR sounds like a great stock. Let me check up on them. If I have some cash left after paying tax, I’ll pick up a little more dividend stocks.Thanks!

  95. Joe,

    EMR has a great long-term track record. Not sure if I want to add more to what’s already a good position, but the valuation seems pretty compelling. We’ll see!

    Hope the tax bill doesn’t bite too hard. Mine was brutal this year.

    Cheers.

  96. Glad to see AAPL entering your list! I’m an hard believer of this stock after hesitating for maybe too long myself ๐Ÿ˜‰ Definitely my favorite from your list even though you’ve got solid ones here.

    Cheers!

    Mike

  97. Mike,

    Actually decided to initiate a very small stake in AAPL today. I had a free trade with my brokerage, so I used it here. Only added a few shares, but I’ll gladly double or triple that down the line if they continue to boost that dividend at an attractive rate. ๐Ÿ™‚

    But I hear you on waiting too long. Can’t win them all!

    Thanks for dropping by.

    Best regards.

  98. Thank you for your watch list which is thought provoking as usual!

    EMR – Your comment makes me nervous, I am to pull the trigger soon ๐Ÿ˜‰
    I mean DiviData gives it an EXCELLENT all over the place!

    AAPL – Same with me as someone wrote here: donยดt like the products but acknowledge what they mean for many customers. Nevertheless, in the short run I canยดt see how they want to make the iWatch a success (battery, and more importantly: what is the extra use of it?). My biggest problem is the middle and longe run: AAPL needs to deliver again and again and again the next big thing and I doubt that they can as the products seem to duplicate competition (wow a big screen … yawn). As a more or less “buy and hold DGInvestor” I fear AAPl will become even more a victim of speculators – not my game.

    WPC – I checked their site and saw that No1 tenant (with nearly 5%) is a German DIY store “Hellweg” which is nearly the smallest DIY store in Germany – not good, lots of consolidation in that cutthroat business over here. Diversificationwise WPC looks interesting but I abstain due to that Hellweg position.

    Good investing!
    Thorsten

  99. Thorsten,

    Yeah, Apple is really interesting. I thought they’d slow down quite a bit after passing through $400 billion, but they keep right on marching.

    “…and I doubt that they can as the products seem to duplicate competition (wow a big screen โ€ฆ yawn).”

    That strategy actually works well. They just broke through records after the release of the iPhone 6, so it’s clearly working.

    That’s interesting information there about Hellweg. It’s tough to get a read on some of their tenants that don’t have publicly traded stock (and easily accessible financial information). Though, I find it common to not like major tenants across a lot of major REITs like WPC. For instance, AMC Theaters is a major tenant for Realty Income Corp. Not much to like there, fundamentally speaking. And the ticket sales across the industry continue to weaken. But that’s why you diversify. ๐Ÿ™‚

    Thanks for dropping by. Good investing to you as well!

    Cheers.

  100. Ok, thanks to your last implus/drop (after many others) here I bought 60 shares of EMR and it feels good – my first position of EMR to be increased via cost averaged method.

    Thanks!

  101. Like this list, DM. I’ve been either closely or casually looking at all of these of late (OHI along with WPC) and FRIPed a single share of SBUX right before the split into my small position.

    If I could hold four of the low yield, great long-term potential growth dividend stocks of premiere brands they would be V, DIS, SBUX and APPL. Right now I own three of those and hope to add V at some point if Mr. Market cooperates.

    Best,

    DWC

  102. DWC,

    Nice list there. I concur. SBUX is probably the last of those stocks I might stretch a bit for in terms of what I’m accepting for yield. NKE is probably on that list as well, but I’d just love to get a piece of SBUX. Under Armour is coming on pretty strong, so that’s something to think about as a NKE shareholder. I don’t think SBUX has a competitor that’s even close.

    Cheers!

  103. Daniele,

    DIS appears to probably be the better value right now, just looking at the potential and what not. Very different stocks, however.

    Take care!

  104. dzogen,

    I don’t follow that stock. But I just don’t have a good feeling about their ongoing relevancy in a digital world, let alone their ability to continue growing enough to provide what I’m after.

    Take care!

  105. Thanks for your article.

    I’m watching MMM as imo it is one of the best Growing diversified industrials out there with a great sustainable dividend. It just never seems to go down. Maybe in May when all the market pundits blast the whole market down.

  106. Bill,

    3M is a fantastic company. I once had a little meetup with someone who works for the company. He kept telling me how great it is there and how much he likes working for them. I should have listened to him and bought the stock years ago. ๐Ÿ™‚

    Thanks for stopping by!

    Best wishes.

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