Category Archives: Dividend Watch List

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 →

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 26, 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 were 14.5% which is higher than the S&P 500 (+12.6%) but lower than the Dow Jones Industrial (+17.4%). Largest decline of -46.7% came from General Electric (GE). Though we didn't elaborate much on GE, we placed it in a high quality category based on its history.

One company we elaborated on was Hormel (HRL) which rose 8.3%. Recent development over the weekend on recall will likey reduce that gain by a good margin. Our assessment was that using dividend as proxy for value, Hormel would be undervalue by 21%. Although that valuation hasn't come to fruition, our team still believe Hormel is undervalued and remain long a Call option on Hormel. Long-term investor could use this range trading as accumulation phase.

U.S. Dividend Watch List: May 25, 2018 Continue reading →

Prior 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 5, 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 loss for the top five companies was 7.3%. Weighting down the list was SCANA Corporation (SCG) and Tanger Factory Outlet Centers (SKT) who lost 44.6% and 27.5% respectively. We didn't foresee the extreme drop in price but did warned our reader on REIT. The excerpt below was our remark.

One should exercise extreme caution on Real Estate Investment Trust (REIT). These include companies such as Tanger Factory (SKT) and SCANA (SCG). We believed that income investors entered this sector aggressively which makes the risk/reward profile at current level unattractive to us.

The best performing company of the top five was W.W.Grainger (GWW) with 51.5% gain. Our team was bullish on W.W. Grainger last year and was fortunate enough to get the timing right. As part of an elite group call Dividend Aristocrat, we believed that risk/reward was appropriate at the level we saw last year. However, there were companies in Dividend Aristocrat that went the opposite direction. AT&T (T) and Procter & Gamble (PG) lost 17% and 16% respectively.

U.S. Dividend Watch List: May 4, 2018

The market started the week at 2,680, dropped to 2,600 and closed the week at 2,660. The volatility is setting in but we see consolidation occurring. Our team continue to be mindful of the March low as the level to watch. If and when that level is breached, we will reassess our asset allocation between cash and equity holding. Below are companies for this week dividend watch list. Continue reading →

Prior Year Performance Review

In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from April 21, 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 of the top five companies on the last year's list yielded 7.6% gain. The largest decline came from SCANA Corporation (SCG) which fell -45.80%. Though we didn't elaborate on SCANA in this writing, our readers will know that we have cautioned of the risk associated with utility companies. The best performer was W.W. Grainger (GWW) which gained +47.80%. We said the following about W.W. Grainger a year ago.

"First on our list is W.W. Grainger (GWW), an industrial servicing company. Grainger reported earnings that missed estimates and lowered its outlook that tanked the stock earlier this week. Shares are trading at the yearly low. Based on our dividend model, shares have the potential to reach $260 but we see current price as fair value. Based on the newly revised EPS estimate of $10, one should expect a 30% downside risk. As such, we would advise one to wait for the price to fall another 15% before accumulating shares."

The key take away is our assessment that one should wait for -15% pull back before accumulation. Shares of W.W. Grainger did fall to $155 or as much as -21%. If one happen to be lucky enough to purchase shares after a -15% decline to $165, the one year return would be at +75%.

Another company we touched on and were bullish on was Target (TGT). In one year, the share price rose +28.40%. We said the following of the stock:

"Next company we'd like to highlight with some potential for downside but greater potential for upside is Target (TGT). To be transparent, we are long Target. We see that the shares could rise 30% from the current level with either multiple expansion to 13x from 10x. However, if net income rises in addition to multiple expansion, shares could rise further than the 30% mark. In addition, the Coppock Curve analysis suggest that shares will rise over the long-term by 22% after the buy signal. Such a signal came in November 2016 but we do not expect the price would recover anytime soon. Target has a strong balance sheet and a dividend yield of 4.50% which should keep long-term investors happy until the sentiment changes."

Not often will our forecast come close to fruition but this one did. We projected a +30% upside and got +28.40%. The result of the upside would be due to multiple expansion pushing P/E to 13 and shares closed the week trading at 13.2x net income. Because the stock has done everything we'd hope for, profit taking, partial or full, should be highly considered.

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

The market continued to gyrate wildly throughout the week. The S&P 500 broke above 2,700 mark but failed to hold that key support and closed the week at 2,670. A technical pattern is displaying a consolidation pattern or "line" formation between 2,600 and 2,800. If the market continue this trend, it gives investors great opportunity to conduct their research. Below are companies on our watch list 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 April 7, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Our analysis of Target (TGT) proved to be well timed. Share rose 35.8% from prior year. Below is the commentary on Target shares last year.

The top four companies from this list are the same as our previous list. Target (TGT) leads the pack and is trading less than 1% above the yearly low. The stock appears to be retesting the the low of $52.70. However, the technical set up appears to be bullish as the Relative Strength Index (RSI) is making a higher-high. Based on our observations, whenever we see this occur, there is good chance that the bottom is set, at least in the short-term. Additionally, our analysis of Target using the Coppock Curve suggests that now is an opportune time for accumulation.

Another company we were bullish on was Hormel Foods (HRL), the maker of SPAM. Shares dropped as low as $30 and peaked at $38. However, the performance since last year yield only 5% increase in share price. The following quote is an excerpt from last year post.

• Hormel's financial strength is A rated according to Value Line Investment Survey.
• The dividend yield of 2% does not seems like much but is higher than the historical average for this company.
• The P/E multiple of 20x may appears to be high when compared to the market. However, we believe that multiple could expand to 25 if this bull market persists. If this bull market is coming to an end, we could see that multiple collapse to 12.

We see a possible upside to $47 with a possibility of downside to $25. A multiple purchase plan is highly recommended.

U.S Dividend Watch List: April 6, 2018

The volatility in the market linger and our watch list has more than 100 companies ranging from small to large cap in different sectors. However, we would urge extreme caution as the bull trend appears to be in its last leg. If and when that occurs we will inform our reader of the approach we will take in our portfolio. Continue reading →

As a follow up to the watch list we published earlier this week, we will break down the watch list into several components using fundamental criterias. 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 March 24, 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 loss of the top five companies was 2.5% compared to gain of 10.4% for the S&P 500. We didn't touch on these five companies but did highlight our bullish sentiment for Hormel (HRL). The stock lost 6% for the year with swing of +/- 10%. Our team continued to believe the valuation and feel that a bottoming process for the stock is in place. In early January, the company announced 10% dividend increase. We continue to hold our long-term call options on the stock which we view as highly speculative.

U.S Dividend Watch List: March 23, 2018

The market lost 6% for the week and propelled the number of companies on our watch list to more than 100 companies. Our team will list all companies below but will expand our coverage by providing top five companies by each fundamental categories such as P/E ratio, Payout Ratio, and our proprietary ratio we'll term NLO ratio. 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 March 17, 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 average return was -13.20% largely driven by SCANA (SCG) and Cato (CATO) which lost -40.80% and -39.50%, respectively. A gain of +30.80% from Target (TGT) wasn't enough to offset the loss incurred from the other four companies. The good news for us is that we were bullish about Target and acted on our intuition.

Other notable companies mentioned were Hormel Foods (HRL), Coca-Cola (KO), and Genuine Parts (GPC). The average change for the three companies are -2% compared to the S&P 500 gain of +15.70%. Although these companies are part of an elite group call Dividend Aristocrats, that doesn't mean they will outperform the market. Even when our valuation model point to potential upside, in the case of Hormel Foods and Coca-Cola, they didn't come to fruition.

U.S. Dividend Watch List: March 16, 2018

Below are 54 companies 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 March 3, 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 on our list didn't fare as well as the market. The combined loss was 16.5% while the S&P 500 gained 12.9%. The only company with a positive gain was Target (TGT). If we look at the sector breakdown of these companies, one will identify a clear trend of sector performance. Three of these five companies below in REIT sectors and the average loss were 21.3%. Cato (CATO) which is a specialty retail store lost half of its market value in one year. Our team were bullish on Target but were early in our purchases. Shares rose more than 30% since last year which is almost 2x the return from the market.

The other company mentioned last year was VF Corp (VFC). Our team was bullish on shares at the right moment and walk away from with a profitable trade. Since our list last year, VF Corp shares rose 40%.

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

The volatility trade is back on and the market continued to swing wildly. At the end of the week, the market lost 2% and the Dow Jones Industrial average broke below 25,000 mark. The result of this pull back is more companies are approaching the yearly low leading to more companies on our dividend list. Should one choose to utilize this pullback as an entry point, we urge our reader to start with high quality companies which have consistent dividend payments listed below. Continue reading →

Previous Year Performance Review

In our on-going review of the NLO Dividend Watch List, we have taken the top five stocks on our list from February 17, 2017 and have checked the performance one year later. The top five companies on that list can be seen in the table below.

Looking back at our commentary about Macerich (MAC), it's fair to say that our analysis was accurate. We felt that Macerich would underperform in the rising interest rate environment and the stock did just that. The following commentary came from the post last year.

"The valuation of Macerich is depended heavily on the interest rate cycle thus Valueline estimated that Macerich is trading below fair value but with declining secular trend as interest rate is expected to rise. Knowing that there are two strong secular headwinds, declining fundamental for mall and interest rate, we urge extreme caution to our readers."

The average change for the top five companies was -11.10% and the brightest spot from the top five was Coca-Cola (KO). A company we were optimistic about at the low and executed on that thesis. The following excerpt was extracted from the list a year ago.

"Next on our list is a company that is familiar to all, Coca-Cola (KO). The stock reached a low of $40 last December and trading in range between $42 and $40 for nearly 6 months. Perhaps the stock is forming a bottom or consolidating before another leg down. We acquired more shares as recent[ly] as last November thus it's fair to say that we are hopeful for the bottoming thesis."

U.S. Dividend Watch List: February 16, 2018

It was a good week for the bulls as the market rose +4.30%. Despite that rise, the correction put many companies in our watch list. Below are 55 companies that appear on this week's watch list. Continue reading →

There are some who have described the recent market pullback as "market crash" or "blood bath." Yes the decline is large but to put things into perspective, the market (S&P 500) has risen +47% for the past 2 years. This equates to an annualized return of +23.50% which is close to the return of the best investor in the world, Warren Buffett. The pullback should be expected and welcoming for a healthy bull market. Should one choose to utilize this pullback as an entry point, we urge our reader to start with high quality companies which have consistent dividend payments, as listed 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 January 20, 2017 and have checked their performance one year later. The top five companies on that list can be seen in the table below.

While the average gain of the top five companies was exceptional in our view, the gain of +21% fall short of the S&P 500 gain of +23.70% gain and +31.50% gain of the Dow. The best performer was VF Corp (VFC). Because the company appeared on our list and seemed attractive to us on a fundamental basis, we took a long position.

Target (TGT) gained +21.80% over the course of the last year. We thought that the stock was attractive as negative news seemed to come out on a daily basis. A buyer of Target would have received 3.70% in dividends in addition to the price appreciation.

Looking back, it is clear that we missed an opportunity in Brown-Forman (BF-B), the maker of Jack Daniel's. Typically we find that companies with  strong brands and legacy assets to be attractive and we missed our mark with Brown-Forman. There were likely multiple factors which led us to ignore this company. However, our valuation model, based on the fundamentals, suggested that BF-B shares should be considered at or below the $45 level. Is there a lesson we can take away from this? We would say that, if and when a company with strong brands appear on our list, do not ignore them and consider doing the initial research.

U.S. Dividend Watch List: January 19, 2018

The list of 33 companies below represents have strong dividend track records. Not all companies on the list are at good values, they have fallen from their highs which we think is a good starting point to identifying potential long-term investments. Continue reading →

We've started the new year off to a strong as the bull market hasn't skipped a beat. This has made finding investments challenging. However, it hasn't slowed us down and we have taken our equity exposure to the highest level yet. The number of companies below is a good place for anyone to start their research for a long idea. Continue reading →