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 February 2, 2018 and have checked their performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2015 Price | 2016 Price | % change |
| PG | Procter & Gamble | 84.25 | 97.47 | 15.7% |
| YORW | The York Water Company | 30.55 | 32.62 | 6.8% |
| MGEE | MGE Energy | 58.35 | 63.52 | 8.9% |
| UGI | UGI Corp. | 45.70 | 57.06 | 24.9% |
| NFG | National Fuel Gas | 49.94 | 58.66 | 17.5% |
| Average | 14.7% | |||
| DJI | Dow Jones Industrial | 25,520.96 | 25,063.89 | -1.8% |
| SPX | S&P 500 | 2,762.13 | 2,706.53 | -2.0% |
The average return from the top five companies was 14.7% compared to a loss of 2% from the market. To our surprise, the best performer was a utility company,UGI Corp (UGI) which rose 25%. Similarly,National Fuel Gas (NFG) did well gaining 17.5% for the year. Our assessment of interest rate rise pushing utility companies valuation down didn't pan out. Instead of rising rate, the 10-year T-bill fell from 2.84% to 2.7%.
We thought that Procter & Gamble (PG) would underperform the market due to its rich valuation. However, the stock rose 15.7% for the year and is not trading at 23.7 P/E. The stock closed this week at all-time high.
U.S. Dividend Watch List: February 1, 2019
It was another good week for the market as the S&P 500 rose 2% for the week. The rally from the bottom has taken the market up 15% and is around 62% retracement on the Fibonacci retracement. Will we see this rally fade in the weeks to come or a re-test of the peak of 2,930? Only time will tell. Until the market (Dow Jones Industrial Average) can break the high with confirmation from the transport, we remain cautious under the assumption of Bear market.
| Symbol | Name | Price | % Yr Low | P/E | EPS (ttm) | P/B | Yield | Payout Ratio |
| MATW | Matthews International Corp. | 37.46 | 1.08% | 15.7 | 2.38 | 1.4 | 2.0% | 32% |
| WEYS | Weyco Group | 27.03 | 1.24% | 14.7 | 1.84 | 1.3 | 3.3% | 49% |
| LNN | Lindsay Corporation | 84.72 | 1.38% | 50.1 | 1.69 | 3.3 | 1.4% | 72% |
| GPS | The Gap | 25.00 | 3.09% | 10.5 | 2.38 | 2.8 | 3.8% | 40% |
| QNTO | Quaint Oak Bancorp, Inc. | 12.20 | 3.21% | 12.1 | 1.01 | 1.0 | 2.1% | 26% |
| AVA | Avista Corp. | 41.32 | 3.51% | 23.1 | 1.79 | 1.6 | 3.6% | 83% |
| HIFS | Hingham Institution for Savings | 187.30 | 3.96% | 13.5 | 13.90 | 1.9 | 0.7% | 10% |
| ORI | Old Republic International Corp. | 20.44 | 4.93% | 16.5 | 1.24 | 1.2 | 3.8% | 63% |
| JWN | Nordstrom | 45.33 | 5.32% | 16.5 | 2.74 | 6.4 | 3.3% | 54% |
| CAG | ConAgra Foods | 21.40 | 5.84% | 11.7 | 1.83 | 1.4 | 4.0% | 46% |
| ABBV | AbbVie Inc. | 80.50 | 6.24% | 22.0 | 3.66 | -41.5 | 4.1% | 89% |
| K | Kellogg Company | 58.70 | 6.51% | 11.1 | 5.31 | 6.7 | 3.7% | 41% |
| BF-B | Brown-Forman Corp. CL 'B' | 47.55 | 6.69% | 30.7 | 1.55 | 15.2 | 1.3% | 41% |
| HRB | H&R Block | 23.99 | 6.86% | 8.8 | 2.72 | -159.9 | 4.1% | 36% |
| CALM | Cal-Maine Foods | 42.71 | 7.04% | 10.2 | 4.17 | 2.1 | 1.0% | 11% |
| STBA | S&T BanCorp. | 38.32 | 7.64% | 12.7 | 3.01 | 1.4 | 2.5% | 31% |
| ED | Consolidated Edison | 76.68 | 7.82% | 15.4 | 4.99 | 1.5 | 3.7% | 57% |
| WTR | Aqua America Inc | 34.69 | 8.10% | 24.8 | 1.40 | 3.0 | 2.4% | 59% |
| BEN | Franklin Resources | 29.63 | 8.38% | 9.7 | 3.04 | 1.6 | 3.2% | 31% |
| CVS | CVS Caremark Corp | 65.22 | 8.45% | 21.5 | 3.04 | 1.8 | 3.1% | 66% |
| THG | The Hanover Insurance Group, Inc. | 113.62 | 8.74% | 12.5 | 9.09 | 1.6 | 1.9% | 24% |
| AROW | Arrow Financial Corp. | 32.58 | 8.93% | 13.0 | 2.50 | 1.7 | 3.0% | 39% |
| SASR | Sandy Spring BanCorp. | 32.59 | 9.11% | 11.6 | 2.82 | 1.1 | 3.4% | 39% |
| MGRC | McGrath RentCorp. | 49.67 | 9.41% | 7.1 | 7.04 | 2.2 | 2.4% | 17% |
| BUSE | First Busey Corp. | 25.31 | 9.42% | 12.6 | 2.01 | 1.2 | 3.2% | 40% |
| CASS | Cass Information Systems, Inc. | 49.68 | 9.64% | 24.5 | 2.03 | 3.2 | 1.7% | 40% |
| FFIC | Flushing Financial Corp. | 22.27 | 9.87% | 11.6 | 1.92 | 1.2 | 3.5% | 41% |
| TMP | Tompkins Financial Corp. | 76.08 | 10.23% | 14.2 | 5.35 | 1.9 | 2.5% | 36% |
| FLO | Flowers Foods Inc | 19.61 | 10.29% | 19.4 | 1.01 | 3.2 | 3.6% | 69% |
| SFNC | Simmons First National Corp. | 25.11 | 10.91% | 12.9 | 1.95 | 1.1 | 2.3% | 29% |
| SBSI | Southside Bancshares | 32.48 | 10.93% | 15.4 | 2.11 | 1.5 | 3.6% | 55% |
| 31 companies | ||||||||
Topping the chart this week is Matthews International Corp. (MATW). Ironically, we recommended our readers to this stock a year ago which didn't turn out so well. The stock fell another 30% since and we are pondering if this would be a right time to jump back in. Our team took a loss on the stock last year in our long position. On Friday, the company reported result for the quarter and stock tanked. Shares fell 15% in just one day bringing the price to $37.46. Our team revised the assessment for the 10-year valuation and this could be a good time to assess this company. We were wrong once and hope that it could be different this time around.
If you choose to explore different companies based on various fundamental measure such as low P/E or high yield, refer to the table below.
| Rank | High P/E | High P/B | High Yield | High Payout |
| 1 | LNN | BF-B | HRB | ABBV |
| 2 | BF-B | K | ABBV | AVA |
| 3 | WTR | JWN | CAG | LNN |
| 4 | CASS | LNN | GPS | FLO |
| 5 | AVA | FLO | ORI | CVS |
| Rank | Low P/E | Low P/B | Low Yield | Low Payout |
| 1 | MGRC | HRB | HIFS | HIFS |
| 2 | HRB | ABBV | CALM | CALM |
| 3 | BEN | QNTO | BF-B | MGRC |
| 4 | CALM | SFNC | LNN | THG |
| 5 | GPS | SASR | CASS | QNTO |
Disclaimer On our current list, we excluded companies that have no earnings. 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 extensive due diligence. Our view is to embrace the worse case scenario prior to investing. It is important to place these companies on your own watch list so that when the opportunity arises, you can purchase them with a greater margin of safety. It is our expectation that, at the most, only 1/3 of the companies that are part of our list will outperform the market over a one-year period.