We’ve started this decade by reviewing the watch list from the beginning of 2019. We are exploring the many different ways to utilize our watch list by collecting and analyzing data from various fundamental measures. Our study has revealed outcomes that may be surprising findings.
| January 4, 2019 (Top 5 Companies) | ||
| Strategy | High | Low |
| Yield | 6.9% | 20.0% |
| P/E | 47.0% | 23.8% |
| Payout Ratio | 26.7% | 9.5% |
| P/B | 41.8% | 24.2% |
| Closest to Low | 21.7% | |
| S&P 500 | 27.8% | |
The gains above are based on top 5 companies by various fundamental metrics from our January 4, 2019 watch list. The best performer was the top five high P/E ratio stocks while the worst performer was the high dividend yield (similar to the Dogs of the Dow strategy).
| High P/E | High Dividend Yield | |||||
| Symbol | P/E | % Change | Symbol | Yield | % Change | |
| SYK | 48.48 | 33% | FUN | 7.30% | 15% | |
| TNC | 42.52 | 51% | MMP | 6.29% | 6% | |
| SAFM | 37.33 | 74% | WRI | 6.26% | 21% | |
| VMI | 34.62 | 34% | HP | 5.71% | -6% | |
| BF-B | 30.36 | 43% | MO | 5.69% | -1% | |
| 38.66 | 47% | 6.25% | 7% | |||
Keep in mind that the time frame for this assessment is one year. One might think that this is a one-time occurrence but our data, as confirmed in the Dogs of the Dow from 1996-2019, shows that companies with high P/E ratios tend to outperform the widely followed Dow Jones Industrial Average and S&P 500 Index.
U.S. Dividend Watch List: January 3, 2020
We are excited to start the new year with new ways to look at the market. The last decade was a great one for the bullish investor. We started the New Low Observer in July 2009 based on the belief that a bull market was due.
In the last decade, the S&P 500 went from 1,133 to 3,230, 185% gain or +12% annually. We have been working hard to explore ways to improve our performance and we will be bringing some of our best ideas forward through the weekly watch list.
| Symbol | Name | Price | % Yr Low | P/E | EPS (ttm) | P/B | Yield | Payout Ratio |
| BEN | Franklin Resources | 25.09 | 0.88% | 10.7 | 2.35 | 1.3 | 4.3% | 46% |
| HRB | H&R Block | 23.46 | 2.94% | 11.6 | 2.03 | -60.2 | 4.4% | 51% |
| FCBC | First Community Bancshares | 30.67 | 3.23% | 12.7 | 2.42 | 1.4 | 3.3% | 41% |
| EVR | Evercore Inc. | 73.38 | 3.26% | 9.0 | 8.14 | 3.8 | 3.2% | 29% |
| SWX | Southwest Gas Holdings, Inc. | 76.30 | 3.33% | 21.3 | 3.59 | 1.7 | 2.9% | 61% |
| CBRL | Cracker Barrel Old Country Store, Inc. | 155.43 | 3.97% | 17.1 | 9.10 | 6.2 | 3.3% | 57% |
| TCO | Taubman Centers | 30.70 | 4.32% | 7.9 | 3.91 | 33.0 | 8.8% | 69% |
| MCY | Mercury General Corp. | 48.83 | 4.58% | 13.1 | 3.73 | 1.5 | 5.2% | 68% |
| CHRW | C.H. Robinson Worldwide | 77.74 | 4.88% | 16.2 | 4.79 | 6.3 | 2.6% | 43% |
| NFG | National Fuel Gas | 45.22 | 5.21% | 12.9 | 3.51 | 1.8 | 3.8% | 50% |
| ANAT | American National Insurance | 117.10 | 5.49% | 9.5 | 12.34 | 0.5 | 2.8% | 27% |
| ROL | Rollins Inc. | 33.23 | 5.96% | 53.6 | 0.62 | 13.5 | 1.3% | 68% |
| CLX | Clorox | 152.91 | 6.50% | 24.3 | 6.29 | 34.9 | 2.8% | 67% |
| TR | Tootsie Roll Industries Inc | 33.66 | 8.37% | 35.4 | 0.95 | 2.9 | 1.1% | 38% |
| SJM | JM Smucker | 102.29 | 8.72% | 20.9 | 4.90 | 1.4 | 3.4% | 72% |
| ATRI | Atrion Corporation | 734.65 | 8.78% | 37.5 | 19.57 | 5.9 | 0.8% | 32% |
| STFC | State Auto Financial Corp. | 30.61 | 8.93% | 44.4 | 0.69 | 1.4 | 1.3% | 58% |
| NJR | New Jersey Resources Corp. | 44.17 | 9.55% | 23.4 | 1.89 | 2.6 | 2.8% | 66% |
| DUK | Duke Energy Corporation | 90.40 | 9.63% | 18.7 | 4.83 | 1.5 | 4.2% | 78% |
| UGI | UGI Corp. | 44.67 | 10.24% | 31.7 | 1.41 | 2.4 | 2.9% | 92% |
| CNP | CenterPoint Energy, Inc. | 26.79 | 10.47% | 21.3 | 1.26 | 2.0 | 4.3% | 91% |
| CVX | Chevron Corp. | 121.01 | 10.54% | 17.4 | 6.97 | 1.5 | 3.9% | 68% |
| MMP | Magellan Midstream Partners LP | 62.75 | 10.57% | 13.7 | 4.59 | 5.4 | 6.5% | 89% |
| IBKC | IBERIABANK Corp. | 73.68 | 10.71% | 9.5 | 7.76 | 0.9 | 2.4% | 23% |
If you’re seeking dependable income, you may want to start with the highlighted companies. The green highlights are current Dividend Achiever and blue are Dividend Aristocrat.
As mentioned in our introduction of this watch list, we’ve collected and analyzed data under various fundamental measure and found that high P/E and high P/B are the best performer. The only explanation is that these fundamental measures reflect growth versus value.
With such a strong bull market, it might be suggest that growth should outperform value. Whatever the case may be, the data we’ve collected is fact and we would recommend our readers to these higher risk higher return categories for investment (high P/E and P/B).
| High P/B | High P/E | Low Yield | Low Payout | Low P/B | Low P/E | High Yield | High Payout |
| Symbol | Symbol | Symbol | Symbol | Symbol | Symbol | Symbol | Symbol |
| CLX | ROL | ATRI | ANAT | ANAT | TCO | TCO | UGI |
| TCO | STFC | ROL | EVR | BEN | EVR | MCY | CNP |
| ROL | ATRI | STFC | ATRI | STFC | ANAT | HRB | DUK |
| CHRW | UGI | CHRW | FCBC | DUK | BEN | CNP | TCO |
| CBRL | CLX | CLX | CHRW | FCBC | HRB | DUK | ROL |
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.