Below are the 27 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
|Symbol||Name||Price||% Yr Low||P/E||EPS (ttm)||Dividend||Yield||Payout Ratio|
|NJR||New Jersey Resources||39.53||2.65%||17.73||2.23||1.60||4.05%||72%|
|FDS||FactSet Research Systems||88.87||4.09%||20.96||4.24||1.24||1.40%||29%|
|TEG||Integrys Energy Group Inc||53.92||6.14%||17.01||3.17||2.72||5.04%||86%|
|FDO||Family Dollar Stores||56.44||6.39%||15.72||3.59||0.84||1.49%||23%|
|PRK||Park National Corp.||65.62||7.93%||14.88||4.41||3.76||5.73%||85%|
|MCY||Mercury General Corp.||38.91||8.05%||9.98||3.90||2.45||6.30%||63%|
|NWN||Northwest Natural Gas||44.36||8.17%||19.63||2.26||1.82||4.10%||81%|
|LKFN||Lakeland Financial Corp.||25.42||8.31%||11.88||2.14||0.68||2.68%||32%|
|CBU||Community Bank System||27.60||8.75%||14.01||1.97||1.08||3.91%||55%|
|AJG||Arthur J Gallagher &||35.59||8.77%||21.18||1.68||1.36||3.82%||81%|
|OMI||Owens & Minor||29.71||10.16%||17.37||1.71||0.88||2.96%||51%|
|AROW||Arrow Financial Corp.||24.94||10.36%||13.63||1.83||1.00||4.01%||55%|
|PNY||Piedmont Natural Gas||31.50||10.49%||18.98||1.66||1.20||3.81%||72%|
Watch List Review
Topping our list this week is a new addition to our dividend database, Microsoft (MSFT). It also appears on our Nasdaq 100 watch list as well. The company’s inability to capitalized on the mobile space seems to be the reason why the stock is trading at discount.
Technically, MSFT has been range bound between $26.50 to $27.50 since November. The bottoming process has begun in our view and as noted in the Nasdaq watch list commentary, we recommend buying in two stages.
Fundamentally, MSFT has been raising their dividend at an astonishing rate of 20% annually since 2008 ($0.11 to $0.23). Book value rose at 16% in the same time frame. Earnings is the major factor in the name which has risen only 1.7% annually since 2008. The collapse of EPS (see chart below) in 2012 may create an opportunity to build on existing holdings.
Utility companies have been the lagging industry and this week is no exception. Two companies remained in the top five, New Jersey Resources (NJR) and Consolidated Edison (ED). Both companies yield exceed 4% but payout ratio is somewhat elevated at more than 60%. A surge in interest rates could significantly affect the short-term prospects of companies in the utility sector.
Top Five Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from January 13, 2012 and have check their performance one year later. The top five companies on that list can be seen in the table below.
|Symbol||Name||2012 Price||2013 Price||% change|
|TR||Tootsie Roll Industries Inc||23.63||26.16||10.71%|
|JW-A||John Wiley & Sons CL 'A'||44.59||40.25||-9.73%|
|CHRW||C.H. Robinson Worldwide||66.73||64.54||-3.28%|
|DJI||Dow Jones Industrial||12,422.06||13,488.43||8.58%|
Our watch list performance didn’t keep up with the gains in the market due to major declines in John Wiley (JW-A). However, four of the five companies reached the +10% mark in less than one year. C.H. Robinson (CHRW) was the worst performer by falling -20% from the word "go."