U.S Dividend Watch List: June 24, 2016

Previous Year Performance Review

In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from June 26, 2015 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Symbol Name 2013 Price 2014 Price % change
MON Monsanto 105.21 104.07 -1.1%
NSC Norfolk Southern Corporation 88.87 82.64 -7.0%
WMT Wal-Mart Stores 72.12 71.96 -0.2%
CVX Chevron Corp. 98.60 101.90 3.3%
PPL PP&L Corporation 29.75 37.18 25.0%
      Average 4.0%
         
DJI Dow Jones Industrial 17,946.68 17,400.75 -3.0%
SPX S&P 500 2,101.49 2,037.30 -3.1%

The average return of our the top five companies exceeded the market's performance by a good margin. Best price performance came from utility company, PP&L (PPL). The search for safety and income was likely the main driver. Worst performer was Norfolk Southern (NSC) which lost 7% of its value. We touched on Wal-Mart (WMT) briefly in our review. The stock was trading at $72 but dropped as low as $56. We didn't provide any downside target which could have been beneficial because the stock has traded back to $72, 28% gain from the low. While we mentioned that a rise to $90 isn't likely anytime soon, a rise from mid 50s to 70 isn't far fetch. Technically speaking, the stock may have put in the low at $56. Any buying from this point may use the 150 or 200 day moving average as a stop loss.

U.S. Dividend Watch List: June 24, 2016

It was a wild week for the market as Brexit became a reality. The market fell 3.6% on Friday and closed the week 1.6% lower. Our team believes Brexit is a none event for long-term equity holder. The world will not end so one should use this as an opportunity to build a basket of companies one would like to acquire for the long run.  As an example, we are not aware of Nordstrom (JWN) having business presence in England. Yet the stock was lowered by nearly 3% on Friday. Below are 29 companies on our watch list. Continue reading

Dover Corp.: Review

On September 10, 2015, we posted an article which reviewed the fundamentals of Dover Corp. (DOV).  Our conclusion on the stock was as follows:

“Considering that there are only two remaining downside targets, the downside risks are “contained” for the most part.  At most, we think that the next downside target is at the ascending $38.51 level.  A two stage purchase plan should be entered into at the below the ascending $46.87 and  $38.51 levels ($56 and $44, respectively).”

Since September 2015, the following is the updated Dow Theory chart that was referenced in the above quote:

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What should stand out is the fact that once DOV declined below the ascending $46.87 downside target, losses have been contained. Subsequently, Dover has risen to the current price of $70.97.  Our best guess is that DOV is facing resistance at the ascending $59.40 line (approx. $80).

As best we can tell, the use of Dow Theory could be coincidental to what ultimately happens to the stock.  However, depending on the quality of the stock (ideally blue chip stocks), Dow Theory is an appropriate tool for consideration of downside risk.

WD-40 Co.: Downside Targets

Below are the downside targets for WD-40 Co. (WDFC) based on the work of Edson Gould’s Speed Resistance Lines (SRL).

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The assumption by many momentum investors is that WDFC will continue to rise further.  However, prior experience suggests that a parabolic rises usually end in a breakdown in the price.  Regardless of any further rise in the price of the stock, the conservative downside target is the minimum downside target to watch for.  At this time, the conservative downside target is $72.49.  We’d become interested in reviewing the fundamentals when WDFC falls at or below the $72.49 level.

Canadian Dividend Watch List: June 2016

Performance Review

Below is the 1-year performance of the Canadian dividend stocks from our June 2014 watch list (found here):

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The best performing stocks were Saputo (SAP.TO), Rogers Communication (RCI-B.TO) and  First Capital Realty (FCR.TO).  The worst performing stocks were TransAlta (TA.TO), Dream Office (D-UN.TO) and Home Capital Group (HGC.TO). 

Worth noting is that the stocks that were expected to have negative returns averaged a decline of –0.38% while the stocks expected to gain in price also declined but by as much as –6.32%.  The Toronto Stock Exchange declined –5.13% in the same one year period from June 19, 2015 to June 17, 2016.

Canadian Dividend Watch List

This is a list of Canadian dividend stocks that currently, or in the past, had a history of consecutive dividend increases. For those wishing to find the most complete fundamental information on these companies, we recommend visiting one of Canada’s leading financial websites, the Financial Post (found here). However, Yahoo!Finance probably has the better long-term charts and historical dividend data.

Quick Take: A Stock Worth Considering Now