It was a volatile week for the market as fear of virus outbreak hit the market. The VIX which measure volatility in the market rose nearly 30%. However, the big picture remain bullish for the market. The S&P 500 remain far from the medium and long term trend and our watch list contain 31 companies. Continue reading
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U.S. Dividend Watch List: January 3, 2020
Before we progress with the current watch list, let’s review how things panned out from last year’s list. The average return was +17.20% while the stock market rose +24.70%.
The best strategy, which yielded a return of +30.80%, was to buy the top 5 companies with the highest price-to-book ratio. Buying top 5 companies with low P/E lost -2.70%.
Buying the top 5 companies closest to the low yield generated a return of +22%. Our most recent research has indicated that purchasing the top 5 companies with either high P/E, high P/B, or low dividend yield provides the best chance of beating the market. We’ll continue to keep score going forward and be as transparent to our readers on our findings.
| January 18, 2019 (Top 5 Companies) |
||
| Strategy | High | Low |
| Yield | 13.9% | 15.8% |
| P/E | 16.4% | -2.7% |
| Payout Ratio | 12.1% | 27.7% |
| P/B | 30.8% | 9.9% |
| Closest to Low | 22.0% | |
| S&P 500 | 24.7% | |
U.S. Dividend Watch List January 17, 2020
With the market at an all-time high, one has to be a little cautious establishing new positions. However, it seems that we have been saying the same thing week after week. Below is the current watch list. Continue reading
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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. Continue reading
Below is the performance of the top 5 stocks by fundamental ratios that we posted from our watch list dated January 4, 2019 to December 27, 2019:
When looking at the data, we prefer to compare the performance of companies on a spectrum of relative values. For this reason, we have compared the High P/E stocks against the Low P/E stocks, High P/B to Low P/B etc.
Long held views on fundamental value investing suggest that investors choose the stocks in the “low” categories over the “high” categories, except in the case of yield. Our attention to the spectrum of data that is available to us points to the fact, so far, that the “high” categories require significant attention as they offer significant potential reward.
The category to beat from our January 4, 2019 watch list was the High P/E group as opposed to the Low P/E group where the gain was +47.06% as compared to +24.02%, respectively.
The second best category in 2019 was the High P/B group with a 2019 gain of +40.35% as contrasted with the Low P/B group which gained +23.88%.
The third group, in terms of performance, was the Low Yield stocks with a gain of +16.25% (failing to beat the index), which stood at nearly 3 times the gains of the High Yield (similar to the Dogs of Dow) stocks with gains of +6.53%.
Last but not least, the High Payout (dividend payout relative to earnings) stocks gained +27.17% as compared to the Low Payout stocks gain of +10.42%.
In the last year, the Dow Jones Industrial Average gained approximately +22.34%.
This is the last watch list for 2019 and what a year it has been to be long equities.
The S&P 500 index increased +30% while the Dow Jones Industrial Average rose +25%.
Our team has been working hard to fine tune our strategies and we look forward to highlighting the results next year. For now, here are companies on our watch list to ending the decade.
| Symbol | Name | Price | % Yr Low | P/E | EPS (ttm) | P/B | Yield | Payout Ratio |
| HRB | H&R Block | 23.39 | 2.63% | 11.5 | 2.03 | -60.0 | 4.4% | 51% |
| BEN | Franklin Resources | 26.25 | 2.66% | 11.2 | 2.35 | 1.3 | 4.1% | 46% |
| SWX | Southwest Gas Holdings, Inc. | 75.24 | 2.69% | 21.0 | 3.59 | 1.7 | 2.9% | 61% |
| TCO | Taubman Centers | 30.45 | 3.15% | 7.8 | 3.91 | 32.7 | 8.9% | 69% |
| CBRL | Cracker Barrel Old Country Store, Inc. | 154.83 | 3.57% | 17.0 | 9.10 | 6.1 | 3.4% | 57% |
| MCY | Mercury General Corp. | 48.58 | 4.05% | 13.0 | 3.73 | 1.5 | 5.2% | 68% |
| ROL | Rollins Inc. | 32.66 | 4.15% | 52.7 | 0.62 | 13.3 | 1.3% | 68% |
| FCBC | First Community Bancshares | 30.99 | 4.31% | 12.8 | 2.42 | 1.4 | 3.2% | 41% |
| ANAT | American National Insurance | 115.89 | 4.40% | 9.4 | 12.34 | 0.5 | 2.8% | 27% |
| CHRW | C.H. Robinson Worldwide | 77.93 | 5.14% | 16.3 | 4.79 | 6.3 | 2.6% | 43% |
| CLX | Clorox | 153.53 | 6.93% | 24.4 | 6.29 | 35.1 | 2.8% | 67% |
| EVR | Evercore Inc. | 75.38 | 8.37% | 9.3 | 8.14 | 3.9 | 3.1% | 29% |
| ATRI | Atrion Corporation | 734.39 | 8.74% | 37.5 | 19.57 | 5.9 | 0.8% | 32% |
| NJR | New Jersey Resources Corp. | 43.87 | 8.80% | 23.2 | 1.89 | 2.5 | 2.8% | 66% |
| NFG | National Fuel Gas | 46.87 | 9.05% | 13.4 | 3.51 | 1.9 | 3.7% | 50% |
| STFC | State Auto Financial Corp. | 30.84 | 9.75% | 44.7 | 0.69 | 1.4 | 1.3% | 58% |
| UGI | UGI Corp. | 44.70 | 10.32% | 31.7 | 1.41 | 2.4 | 2.9% | 92% |
| DUK | Duke Energy Corporation | 90.97 | 10.32% | 18.8 | 4.83 | 1.5 | 4.2% | 78% |
| CNP | CenterPoint Energy, Inc. | 26.91 | 10.97% | 21.4 | 1.26 | 2.0 | 4.3% | 91% |
Companies in green and blue are part of the Dividend Achiever and Dividend Aristocrat, respectively.
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.
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 December 14, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| ONB | Old National BanCorp. | 16.29 | 18.25 | 12.0% |
| QNTO | Quaint Oak Bancorp, Inc. | 11.85 | 14.25 | 20.3% |
| FMBI | First Midwest BanCorp. | 20.64 | 22.79 | 10.4% |
| CTBI | Community Trust BanCorp. | 40.73 | 46.07 | 13.1% |
| EV | Eaton Vance Corp. | 34.95 | 47.31 | 35.4% |
| Average | 18.2% | |||
| DJI | Dow Jones Industrial | 24,100.51 | 28,135.38 | 16.7% |
| SPX | S&P 500 | 2,599.95 | 3,168.80 | 21.9% |
The top five companies, comprised mostly of regional banks, average returned was 18.2%.
U.S. Dividend Watch List: December 13, 2019
Another week, another record high for the market. At this moment, all we will be doing is track companies that have reach their yearly low and have a reversing pattern. Until then, we will continue to monitor the market and all our positions and potentially raise cash at the beginning of next year. Below are companies on our watch list this week. Continue reading
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The Dow Jones Industrial Average and the S&P 500 reached another all-time high this week. Despite the strong move in those indexes, we have not seen the Dow Jones Transport confirm this bullish move. With markets at all-time highs, we have less than 30 companies on our watch list for the week. Continue reading
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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 November 16, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below
| Symbol | Name | 2018 Price | 2019 Price | % change |
| EV | Eaton Vance Corp. | 42.63 | 48.07 | 12.8% |
| PRGO | Perrigo Company plc | 63.27 | 49.38 | -22.0% |
| R | Ryder System, Inc. | 54.81 | 52.71 | -3.8% |
| CHFC | Chemical Financial Corp. | 47.05 | 42.04 | -10.6% |
| GS | Goldman Sachs Group | 202.12 | 220.25 | 9.0% |
| Average | -2.9% | |||
| DJI | Dow Jones Industrial | 25,413.22 | 28,004.89 | 10.2% |
| SPX | S&P 500 | 2,736.27 | 3,120.46 | 14.0% |
The biggest drag to the performance of the top five companies was Perrigo Company (PRGO) which lost -22% in one year. The stock was trading $63 during the same time last year but the market correction in December took the price down to $36.50, a -40% decline. Perrigo rebound to $50 range which is about 37% from the bottom.
A company we had interest in from last year's list was Ryder Systems (R). The price is virtually unchanged over the course of the last year. While the stock price didn't budge, the dividend did increase which increased the dividend yield from 3.7% to 4.3%. Our 10-year targets shows that Ryder Systems should be accumulated at this range so we urge our readers to consider this company at this juncture.
U.S. Dividend Watch List: November 15, 2019
The Industrial reached all-time high at 28,000 and the S&P 500 reached 3,120. The one missing piece for us is the Dow Jones Transportion Average which needs to exceed 11,570. With the market at its all-time high, it's expected that we will have fewer companies trading near their yearly low and that is exactly what we got. Below are the companies on our watch list this week. Continue reading
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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 2, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| CHFC | Chemical Financial Corp. | 46.36 | 42.04 | -9.3% |
| AVY | Avery Dennison Corp. | 92.42 | 129.40 | 40.0% |
| ABBV | AbbVie Inc. | 79.56 | 81.75 | 2.8% |
| IBM | IBM | 115.67 | 135.53 | 17.2% |
| ALL | Allstate Corp. | 89.55 | 105.90 | 18.3% |
| Average | 13.8% | |||
| DJI | Dow Jones Industrial | 25,270.83 | 27,347.36 | 8.2% |
| SPX | S&P 500 | 2,723.06 | 3,066.91 | 12.6% |
Prior Year Performance Review
The top five companies from last year list gained +13.8% which is better than S&P 500 and Dow Jones Industrial average. The largest contributor to this out performance was Avery Dennison (AVY). Though Avery Dennison wasn't part of Dividend Achievers or Aristocrats, the company raised its payout by +11%. Of the five companies, the only one that lost value (-9.3%) was Chemical Financial (CHFC).
U.S. Dividend Watch List: November 1, 2019
The S&P 500 closed at all-time highs on Friday but we are waiting for the Dow Jones Industrial Average to follow through. To be extremely bullish of this breakout, we'd like to see the Dow Jones Transport Average break through its all-time high as well. Such action would trigger a bullish indication from a Dow Theory perspective. We are cautiously optimistic but it is difficult to find good values at this junction. Our team has been net seller of stocks and so has Berkshire Hathaway who reported earnings today. Continue reading
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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 October 12, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| MATW | Matthews International Corp. | 42.68 | 34.59 | -19.0% |
| FUL | HB Fuller Company | 45.50 | 47.27 | 3.9% |
| NC | NACCO Industries | 30.26 | 65.00 | 114.8% |
| PPG | PPG Industries | 95.09 | 119.17 | 25.3% |
| WHG | Westwood Holdings Group Inc. | 45.02 | 28.14 | -37.5% |
| Average | 17.5% | |||
| DJI | Dow Jones Industrial | 25,339.99 | 26,816.59 | 5.8% |
| SPX | S&P 500 | 2,767.13 | 2,970.27 | 7.3% |
The top five companies performed exceptionally well due to an amazing performance from NACCO Industries (NC) which more than doubled its value. NACCO became a pure play in the coal sector after they spun-off Hamilton Beach and Hyster-Yale so we felt that it was a risky proposition. Needless to say, high risk in this instance lead to high reward. Matthews International (MATW) didn't perform as well and lost nearly 20% in a year. Our team was a believer in the value proposition and remain long in this company. However, the large debt obligation is a concern.
U.S. Dividend Watch List: October 11, 2019
This has been a volatile October and we're only half way through. Below are companies on our watch list. Continue reading
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The market is trying to find its footing and closed the week slightly lower than it began. From the chart, the index is approaching the 50-day moving average which may provide a short-term support. Anyone seeking to go long at this moment should utilize the list below as a starting point for your research. Continue reading
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The market is attempting to test the all-time highs once again. This upward movement is dwindling the number of companies on our watch list. In fact, this is the lowest number of companies on our watch list this year. Continue reading
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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 31, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| LM | Legg Mason | 31.20 | 36.79 | 17.9% |
| IVZ | Invesco Ltd. | 24.10 | 15.70 | -34.9% |
| AMAT | Applied Materials | 43.02 | 48.02 | 11.6% |
| BEN | Franklin Resources | 31.74 | 26.28 | -17.2% |
| VMC | Vulcan Materials | 110.80 | 141.25 | 27.5% |
| Average | 1.0% | |||
| DJI | Dow Jones Industrial | 25,964.82 | 26,403.28 | 1.7% |
| SPX | S&P 500 | 2,901.52 | 2,926.46 | 0.9% |
The average gain for the top five companies was 1.0% which is comparable with S&P 500 gain of 0.9%. The best performer was Vulcan Materials (VMC) with 27.5% gain. The worse performer was Invesco (IVZ) with a loss of 34.9%.
U.S. Dividend Watch List: August 30, 2019
Our team is starting to get defensive and raised more cash. However, we will always utilize the watch list below as a starting point for investment opportunities. Continue reading
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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 17, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| LM | Legg Mason | 31.44 | 36.53 | 16.2% |
| IVZ | Invesco Ltd. | 24.48 | 15.64 | -36.1% |
| VMC | Vulcan Materials | 110.34 | 141.80 | 28.5% |
| AMAT | Applied Materials | 43.77 | 46.63 | 6.5% |
| PBI | Pitney Bowes Inc | 8.08 | 3.46 | -57.2% |
| Average | -8.4% | |||
| DJI | Dow Jones Industrial | 25,669.32 | 25,886.01 | 0.8% |
| SPX | S&P 500 | 2,850.13 | 2,888.68 | 1.4% |
The average loss for the top five companies was 8.4% compare to the market gain of 1.4%. The largest contributor of this loss was Pitney Bowes (PBI) whose market value fell 57%. Any company with dividend yield of 6% or more should be avoid and Pitney Bowes had a yield of nearly 10%. We thought Illinois Tool Works (ITW) is ripe for accumulation and shares gained 7.7%. At the time, we didn't think that Applied Materials (AMAT) was attractive but shares managed to gain 6.5%. However, shares of Applied Materials did fall 33% to $29 before rebounding to the current level.
U.S. Dividend Watch List: August 16, 2019
The market was on a roller coaster. After reaching an all-time high of 3,025, the fear of recession and tariff took the market down by about 5%. There is an important technical level to watch out for at 2,745 so keep an eye on it as we wait and see if the market can consolidate to move higher or lower. Continue reading
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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 3, 2018 and have checked the performance one year later. The top five companies on that list can be seen in the table below.
| Symbol | Name | 2018 Price | 2019 Price | % change |
| FFIC | Flushing Financial Corp. | 24.87 | 19.67 | -20.9% |
| IVZ | Invesco Ltd. | 25.15 | 17.84 | -29.1% |
| FII | Federated Investors Inc | 22.91 | 33.99 | 48.4% |
| LM | Legg Mason | 32.24 | 37.98 | 17.8% |
| CBRL | Cracker Barrel Old Country Store, Inc. | 145.58 | 172.25 | 18.3% |
| Average | 6.9% | |||
| DJI | Dow Jones Industrial | 25,462.58 | 26,485.01 | 4.0% |
| SPX | S&P 500 | 2,840.35 | 2,932.05 | 3.2% |
Last year, there were numbers of financial companies trading near their yearly low. As such, we suggested our readers to explore Financial ETF, XLF, as an alternative to individual shares. Price for XLF were virtually flat year-over-year but price fell to $22.31 in late December of last year.
Illinois Tool Works (ITW) raised dividend payout by 28% last year which was a bullish sign. Share rose 9% in one year and we can expect more dividend increase to be in the short horizon.
U.S. Dividend Watch List: August 2, 2019
Market closed the week 3% lower than last week. There were several news one could attribute to this weakness. The first one was the rate cut from the Federal Reserve and the second was the plan to impose more tariffs on China. How should one position for this market? The fact that the market is near its all-time high, we can say that buying at this level poses some short-term risk. Buffett, as an example, was a net selling of stocks in the last quarter. Continue reading
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