Category Archives: Dividend Achievers

2018 started out strong but the bear took over at year end. We look forward to a new year and hope to produce quality investments from the dividend watch list below. Continue reading →

Following Dow Theory primary trend change to bearish trend, the market staged a minor rally or a secondary reaction to close the week. As a result of a new trend, we saw a spike in the number of companies trading near their respective 52-week low.

The number of companies on our watch list rose 13% higher than two weeks prior. A primary bear market is upon us so be selective with when and how you enter the market. It is still our strategy to start with quality companies from the list below. Continue reading →

The market continues to struggle to find its footing and fell further this week. The S&P 500 broke through the crucial support at 2,650 and closed the week at 2,599. At this rate, we may see a Dow Theory bear market confirmation if the Dow break below 23,500 level.

Our watch list expanded tremendously through this correction. The best approach, one which we will follow, is to watch this market unfold. Utilize the watch list to identify potential long investments that you could see yourself holding through a bear market or at least 3-5 years out. Be patient and choose your entry point wisely. Continue reading →

The S&P 500 was down 1.3% for the week. One positive sign was the fact that the market didn't close below 2,700 level. From the technical perspective, a 2,800 level is a crucial one for the upward bias to continue. If the market can break above that level, the all-time high would likely be the next stop. Below are companies that are on our watch list for this week. Continue reading →

Top Five Watch List Performance Review

In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from November 3, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Prior Year Performance Review

The best performing stock was Nordstrom (JWN) which gained 72.7%. A year ago, Nordstrom failed to go private after failing to secure funding. Our team thought this would be a prudent time to take a finer look at this major retailer. Below is an except from our watch list.

Despite such draw back, we are curious if this could be an opportunity for value investors to buy in. Our team are not proposing to go long at this level but one should be ready to accumulate at the right price point. The stock yield 3.8% but payout 70% of its earning which is relatively high and leave company with small margin of safety. Perhaps halting a dividend or reducing it could provide a better entry point.

U.S. Dividend Watch List: November 2, 2018

The volatility in the market continued and S&P 500 gained some ground this week and rebounded 1.5%. Here is a list of companies that are on our watch list for the week. Continue reading →

What a week that was with both the Dow and S&P losing nearly -4%. From the peak of 2,940 on the S&P, the market fell -6% but that was less than the pullback we saw at the beginning of the year when S&P fell a little over -10% with similar duration.

While similar, there is one major difference between the two and that is interest rates. The 10-Year T-bill rate rose 18% since the end of January. Our followers will know that we will utilize Dow Theory as a gauge for market direction. Until a change of market direction is upon us, we will utilize the watch list below as a starting point to find investment opportunities. Continue reading →

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 September 22, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The top five companies didn't do as well as the market rising only 10.4%. Biggest hold back of that gain came from SCANA Corp (SCG) which lost 36.9%. This is what we said about SCANA a year ago.

Trading at the yearly low is an electric utility company, SCANA Corp (SCG). Based out of South Carolina, SCANA is a 7.9B company that has been around since 1924. Our team know little about this company but one important fact loom over this company. There is a class action lawsuit on its executives that they have violated federal securities laws. While we can't fully recommend that our reader consider it for assessment until the smoke is clear, we will keep the company on our list until further noticed.

The best performer was Atlantic Tele-Network (ATNI) which gained 42.7% in one year. Our team, however, didn't know much about the company and was focused on two household names, JM Smucker (SJM) and Hormel Foods (HRL) which gained 5.3% and 28.0% respectively.

U.S Dividend Watch List: September 21, 2018

If you missed our commentary on Dow Theory this month, I suggest one go back and review it. It may seems strange at this level to put money to work but investing should always be forward looking proposition. Positioning yourself in this market will be key and we always position ourself with high quality company utilizing the dividend achiever approach as a proxy for quality. As such, here are the company on our watch list this week. Continue reading →

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 September 1, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The average gain from the top five company was mediocre rise of 0.5% compared to 17.2% gain from S&P 500 and 18.1% from Dow Jones Industrial. The largest gain came from Hormel Foods (HRL) which rose 26.6%. We had this to say about Hormel last year.

Another food producer that should be on the radar is Hormel Foods (HRL). The stock has fallen 11% since the year began. Our valuation model imply that additional downside of 25% should be expected but 34% upside is also possible. Similar to the prior company we mentioned, Hormel Coppock indicator dipped into negative territory in April. With that in mind, a change in direction would make Hormel an ideal company to go long. Our study of Coppock on this company is that when applying the strategy, the average return is 31% after one year. Although sample size is small (5 of 309 months), the indicator have not produced negative return. Additionally, Hormel return on equity average 16% which is exceptional.

The biggest decline came from SCANA Corp (SCG) which fell 36.2%. The utility company couldn't raise rate and stock price followed.

J.M. Smucker (SJM) was the other stock that lost value since last year falling 1.4%. Our team believed that valuation was ripe for accumulation. Although shares remain virtually flat, shares actually rose 30% from $100 to $130 in 6 months before giving back all those gain. our team has long position but didn't sell because of tax implication. Perhaps we can explore the use of Put option to lock in majority of the gain. Despite that, we believed shares provide good value at the current level.

U.S. Dividend Watch List: August 31, 2018

The market took out the all-time high and the bull market continued. If we wish to go long, our team would start with companies on the watch list below. Continue reading →

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 August 18, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The average gain from the top five companies were amazing with gain of 38.9%. One can thank W.W. Grainger (GWW) for such strong performance with price more than double (121.7%). We were upbeat about the company after the pull back last year and loaded up on shares. Below is what we said about W.W. Grainger.

We wrote a short commentary on W.W. Grainger (GWW) on April 21st. There, we specifically advised our readers to wait for a -15% decline before accumulating shares. Sure enough, shares have fallen -17% since and now would be the time for accumulation. An initial purchase should be coupled with additional purchases 10% below the current level if and when it occurs.

U.S. Dividend Watch List: August 17, 2018

The all-time high is just few ticks away. With that, it's hard to begin buying at this level and yet an all-time high would be mark a bullish pattern. If we wish to go long, our team would start with companies on the watch list below. Continue reading →

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 August 4, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Top five companies gained, on average, 3.9% which under performed the market that rose nearly 15%. The biggest drag came from Owens & Minor (OMI) which fell 35.6%. Our team were bullish on the company because of the valuation and learn a hard lesson. That lesson is, cheap company could get cheaper even if a model doesn't account for it.

On the opposite end, we thought that Bemis (BMS) was fairly valued and could experience 15% downside. However, shares closed this week nearing its all-time high driven by news of potential take over.

U.S. Dividend Watch List: August 3, 2018

The market is approaching an all-time high at the end of the week. If the trend continue, we'll see the bull market optimism renewed as the S&P break its record set back in January. Below are companies that are on watch list this week. Continue reading →

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 July 21, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Top five companies did extremely well, gaining 26%, as group despite lack of performance from IBM (IBM). The largest contributor was the retail sector companies Ross Stores (ROST) (+59.4%) and TJX Companies (TJX) (+40.8%). These gains far out strip the market of 13.3%. We thought that Ross Stores was trading at fair value thus wasn't worth the risk. Below is what we said about Ross Stores.

Next stop on the list is Ross Stores (ROST). This discount retail store traded as high as $69.80 late last year but shares have fallen 22%. It should be no secret to anyone that Amazon presence is hurting retailers be it discount or luxury. The brick and mortar model contain high overhead which makes it difficult to compete with online retailer. Our analysis suggest that Ross Store appears to be risky investment at this level. Dividend regression model shows that shares are right at fair value. Applying historical data and produce altimeter suggests shares are overvalued despite fallen 22% from the peak.

We also touched on IBM (IBM) which was virtually flat year-over-year. However, we believed shares would be a good trade at support level of $140 which did so recently (see chart below). The excerpt below was our commentary last year on IBM.

IBM (IBM) closed the week at yearly low. The company reported quarterly result that didn't excite the bull. Revenue continued to decline but revenue beat consensus estimates. Value investor will know by now that Warren Buffett sold majority of his holding in IBM. It wouldn't surprise us that he exit his entire position in the near future. Value Line estimated that IBM will produce cash flow per share of $17.50 in 2018 and believe shares are fairly traded at 9.5 times. This calculation put share price as $166, about 13% higher than current level. Since the peak in March ($182), stock price have fallen 19% and broke technical level at $150. Because of that technical breakdown, our prediction is for shares to find support at $140 range. Anyone looking to find value may want to wait a little longer and establish positions in $140 range.

One stock the market went against us big time was medical equipment supplier Owens & Minor (OMI). Despite hitting all-time low last year and reaching valuation level similar to 2008 low, shares continued to slide more than 50% and reached an extreme low of $15. Since then, shares hare rebounded to $17. The pain is felt to our portfolio as we do own shares of OMI. Blind sided by the issue at hand, we still believe shares are of good value but any hope of sizable profit is highly unlikely based on our purchase price. The important lesson to take away is to always anticipant sizable downside risk even if your assessment shows no sign of it. Then be prepared to either cut your loss if you're trading, realized short-term loss for tax purpose, or purchase more if you have full conviction.

U.S. Dividend Watch List: July 20, 2018

The market is displaying some bullish characteristic with late week rebound and closed above 2,800. The first time this occurred was in January of this year which technically looks like a parabolic move. A well defined pattern of higher-high is a more robust pattern with good support. As we move longer into this bull market, it would be natural to get defensive so we urge our readers to assess the asset allocation and the cash holding. Below is our dividend watch list for the week. Continue reading →

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 July 7, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The top five companies didn't do so well with average loss of 5.4%. Biggest drag on this list was General Electric (GE). The biggest gain of 11.9% came from Hormel (HRL). Our team said the following about Hormel.

One company our model offer good risk/reward profile is Hormel Foods (HRL). Dividend payment is the best proxy for share price direction and using our dividend regression model, there is a 21% upside potential in shares of Hormel Foods. Average yield for this company historically has been in range of 1.5% but current yield of 2.2% suggest an undervalue range. Even so, one should take caution and establish a multiple purchases plan.

Another company we mentioned was Genuine Parts (GPC) which we believed to be trading near fair value at the time. Our assessment is fairly close to reality as share rose 4.5% for the year. We said the following about Genuine Parts.

Four companies are trading within 1% of its yearly low. First on the list is auto supplier Genuine Parts (GPC). Shares broke below $90 after Goldman downgraded the stock to sell from neutral rating and reduced its target price to $89 from $104. Our valuation model isn't as bullish on shares of Genuine Parts at current level but would be if shares are trading at $70. Trading at 4x book value is a bit rich and multiple of 3x would be more reasonable.

U.S. Dividend Watch List: July 6, 2018

It was a good week for the bull as the S&P 500 gained 2.2%. The momentum is swinging upward and look to the 2,800 mark to be the key technical level. The sideway trading pattern that began at the beginning of the year could mean an accumulation before the next leg up or down. A break below 2,600 would be very bearish and above 2,900 to be bullish. Our team will explores investment opportunities from the watch list below. Continue reading →

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 23, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The average gain for the top five companies was subpar. The first company on our list was JM Smucker (SJM). We thought that JM Smucker at the time was trading at fair value and a decline of 10% would prompt an investor with a good starting point. Fast forward to today and shares are off 12% from last year. As such, it's probably a great time to do evaluation JM Smucker as potential long. Our valuation model has a possible downside of 10% as the worse case scenario with 35% potential upside at current valuation.

One company we got completely wrong is Owen & Minor (OMI) which we though had reached an extreme downside. To our surprise, shares fell 44% compared to our projection of 15% downside risk. It would be difficult to walk away from a company with strong fundamental and balance sheet after a big decline such as this one. As a long-term investor, accumulating shares of Owen & Minor at the current level would put the risk and reward profile in their favor.

U.S. Dividend Watch List: June 22, 2018

Below are companies on our watch list this week. Continue reading →

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 May 27, 2016 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

The top five companies average gain was 6% for the year. The best performer was TJX Companies (TJX) whose shares rose 31.4%. On the opposite end of the spectrum was JM Smucker (SJM) which lost 15.2%.

Regarding TJX, we said Target (TGT) would be our preferred option in the retail space given the current dividend yield and our assessment was proven correct. While TJX gained 31.4%, Target rose 46.8%. Excerpt below is what we said last year.

Trading near the low and not far from Carlisle is a discount retailer, TJX Company (TJX). It's no secret that retail industry is in a big slump and have seen their market share shifted to Amazon. Our team have not extended our study to TJX because we own a substantial shares of Target. A recent swoon in Target shares pushed the dividend yield up to 4.6%. Compared that with 1.7% for TJX and it's a no brainer to us. Time will tell if our assessment is right.

As for JM Smucker (SJM), we believed that the valuation wasn't ripe and a drop to $100 would mark a good entry point. Sure enough, JM Smucker is currently trading at $105, a fall of 15% from last year.

U.S. Dividend Watch List: June 15, 2018

Below are companies on our watch list this week. Continue reading →

It was a good week for the market with the S&P 500 gaining more than 1.3%. However, the index is approaching the resistant level of 2,800 which can be trace back to March of this year. Looking at the chart, the trading range between 2,600 and 2,800 emerges. Below are companies on our dividend watch list for this week. Continue reading →