November 2015 Stock Considerations

With almost all of October in the rear view mirror it’s time, once again, to look forward towards the next month of potential stock buys. October has seen the market rebound quite nicely on almost all fronts as beaten down industrial names, energy and even many consumer staples gained significant ground in just a matter of a couple weeks. What this means going into November, no one really knows despite what the “experts” will tout. All you can really do as a long term dividend growth investor is be consistent with your buys and search for relative values and good sustainable yield. The market will do whatever the market will do.

 

November will be the first month in 2015 where I will not have an opportunity to make any additional buys in my ROTH account as I have already contributed the maximum $5,500 allowed for the year. All this means, is that for the first time in well over a year, I will not be able to add to my Canadian bank holdings, The Toronto-Dominion Bank (TD), The Bank of Nova Scotia (BNS) and Royal Bank of Canada (RY). The only investments I’ll have going into those banks will be the dividends received and automatically reinvested. All this means is that for November and December I’ll have my taxable account and IRA account with some roll over money to make my stock buys. With that being said, let’s take a look at my November stock considerations.

 

Staying within the industrial theme, as I have last month, I am first looking to add to my Emerson Electric Co. (EMR). Though having bounced back quite nicely from its recent lows, EMR still offers a juicy yield just north of 4% with a sustainable payout ratio of 58.2% based on an EPS of 3.23. From a valuation perspective its current PE of 13.0 is well below its five year average of 20.2 suggesting that even with all the near term industrial headwinds in place, EMR can be a solid pick at current prices.

 

To a lesser extent I am still considering Dover Corporation (DOV). A company with a very long history of dividend raises, that is no doubt feeling a bit of pinch because of lower oil prices as demand for their oil and gas services are weakening in the near term, DOV still looks attractive at current prices. Currently yielding 2.69% with a moderate payout ratio of 45.0% DOV’s dividend still looks to be quite safe with room for future raises. With a current PE of 16.0 DOV is right around its five year average PE but will well below S&P averages.

 

Next up I’d like to consider adding one or two new names to my portfolio in the biotechnology sector with Amgen Inc. (AMGN) and Gilead Sciences Inc. (GILD) being my go names in the space. Neither company offers an impressive current yield but both offer tremendous potential upside and future dividend growth. Both seem to offer very sustainable dividends based on their respective cash flows which means more than likely 1) dividends will continue to flow and 2) future raises are an option. Of course, I would love to hear an opinion regarding either company and whether or not they are in your current portfolio or at least on your watch list.

 

Finally, I will consider adding to my positions in the health REIT sector with potential buys in HCP, Inc. (HCP), Welltower, Inc. (HCN) and Ventas, Inc. (VTR) in my IRA. Of course, I always qualify these posts with the statement that Mr. Market may have his own ideas for my potential buys but if the market pretty much stays at current levels I’ll be adding from the names mentioned above.

 

So there you have it. My November stock considerations are EMR, DOV, AMGN, GILD, HCP, HCN and VTR. What’s on your shopping list for the month of November? Please let me know below.

 

Disclosure: Long EMR, DOV, HCP, HCN, VTR

27 thoughts on “November 2015 Stock Considerations

    • Hi FV,

      For such a strong company in terms of growth and it’s dividend, you don’t really see AMGN in many dividend growth portfolios. I appreciate any opinion on the name and happy to see that you own a piece of this great company. I’m waiting to see how November will unfold to decide where I’ll deploy my fresh capital but one thing is for sure, if things stay the same, finding good value will be a lot more difficult. Thank you for stopping by and commenting.

    • Hi MSF,

      Thank you for sharing your opinion. I happen to agree with you in terms of liking both EMR and VTR going forward. Of course, it all depends on the value and potential yield that will be offered. Seems like finding great value is becoming a challenge once again. As always, I appreciate your comment.

  1. Keith,
    My wife and I actually hold 5 of the stocks you are considering this month (AMGN, GILD, HCN, HCP, VTR). 🙂

    Our position in AMGN is about 25% larger than GILD because I think the risks are higher with GILD. However, the rewards are probably much higher with GILD. To a degree, both companies could face pressure if the government decides to intervene on drug pricing. GILD, however, probably faces greater scrutiny because of Sovaldi. You remember when Express Scripts decided that they were going to use the Abbvie drug instead to save costs? At the time Sovaldi cost $84,000 for a 12-week treatment (I’m not sure if the price has been adjusted since then).

    As far as the 3 healthcare REITs, I think that Wellpoint is probably the strongest, but the yields reflect this. We also hold Omega Healthcare (OHI) with a yield over 6.2% that you might consider adding.
    Best wishes,
    KeithX

    • Hi KeithX,

      I really appreciate your insight and opinion on AMGN and GILD. Sure government intervention can always throw a monkey wrench into any of the best companies on Earth but that wouldn’t be a reason for me to not potentially invest in either name. Investing in the the health theme just seems like a no brainer for the next two or three decades that I want to expand my holdings in the space to include some biotech names as well. We’ll see how November unfolds. If I can’t really find any value in some of my current holdings I may just initiate a position in a new biotech.

      Regarding the REITs, OHI is the only other health REIT I would consider for now. Though after the CCP spin off I feel more than sufficiently diversified in the space. I guess what I’m trying to say is that with the market roaring back finding new places for my money is a bit more challenging. In previous months it was much easier picking up EMR, CAT or any of the large Canadian banks. Thank you for stopping by and sharing your thoughts.

    • Hi R2R,

      I guess most dividend growth stock buyers think alike. The truth is that I’m finding less “value” these days with the market climbing so far so fast in recent weeks. Unless things change dramatically I may just nibble on a position just for the sake of consistency. We’ll see how November unfolds. As always, I appreciate your comment.

    • Hi JC,

      Happy to see other people looking at the same names I am considering for the next month. Once the CB deal goes through with the ACE buyout I will look to add another financial name and have considered TROW and/or TRV as a replacement. I like VFC a lot. I have held that stock since around 2007 and it has been one of my best performers among all my holdings. It’s really not a traditional fashion company like ANF or AEO. I see VFC as a “fashion staple” type of company with their varied offerings. Thank you for commenting.

    • Hi DfS,

      Both EMR and DOV have climbed nicely from their recent lows but still provide good to decent value and yield even at current prices. EMR is a name that is commonly found in many long term dividend growth portfolios and would make a nice industrial addition to any portfolio. Thank you for stopping by and commenting.

  2. Hi Divhut,

    Those are some nice stocks to have on your shortlist. I just initiated a position in EMR last month at a great value. I’m looking at adding a new position in a Canadian bank in November. As I already have a few shares of RY, I will be looking at TD or BNS as the top contenders. I look forward to seeing which stocks you purchase this month.
    Cheers
    Dividendniche recently posted…Canadian and Global Foundation WatchlistMy Profile

    • Hi Dividendniche,

      All solid names you are adding as well. I would love to be able to add to my Canadian banks but do not have any more funds that I can add to my ROTH for 2015. Thank you for stopping by and sharing your picks.

    • Hi ARB,

      I’m kind of with you on biotech which is why, after about seven plus years of being a dividend growth investor, I do not own any. Those two biotech considerations are just in case I really can’t find a place to invest elsewhere. Of course, I may add some energy which would shock everyone in the blogoshphere. We’ll see how November unfolds and, of course, the money follows the value and yield. Thank you for stopping by and commenting.

      • Go for energy. It’s a wonderful sector. I know you don’t like volatility, but remember that volatility is simply opportunity. We don’t know how much longer oil prices–and energy stock valuations–will stay at these once in a lifetime lows. If I weren’t so overweight in energy, I’d be buying energy stocks right now.
        ARB recently posted…The Bank Is NOT The Best Place To Order Checks!My Profile

        • Hi ARB,

          Thanks for the input. I know many might think I’m crazy for not touching energy, though DOV might be considered an energy proxy. I do have quite a few energy names on my watch list but have been gun shy in initiating a position in the space. Always appreciate your opinion.

    • Hi R2R,

      The industrial names really came back strong in recent weeks from their lows earlier in the month which, of course, means slightly less value and yield. But, even at current levels, many of the names mentioned still provide a good entry point. ETN does look like an interesting prospect and I know a few of the dividend bloggers have been considering that name as well. As always, I appreciate your comment.

    • Hi DD,

      I know what you mean about having an EMR bias. I have a nice size holding in that stock in both my taxable and ROTH accounts and it’s baby DivHut’s largest holding too. Even with their recent rise from the lows hit earlier in October, EMR still offers a nice value and yield at current levels. Thank you for sharing your thoughts.

  3. Divhut,

    Bert here… Big fan of EMR and am eagerly awaiting their upcoming dividend increase. But let’s be honest, those are some great companies on your list and I don’t think you could go wrong investing in any of them . The important thing is that you are putting your money to work as soon as possible!

    Thanks for taking the time to put this list together.

    Bert
    Dividend Diplomats recently posted…Bert’s October Dividend Income SummaryMy Profile

    • Hi DD,

      You hit the nail on the head. The bottom line is that money is being put to work in a high quality name which more than likely will continue to raise its dividend and provide ever increasing passive income returns. EMR is still my go to stock, though some of the REITs are looking much better priced these days too. Thank you for stopping by and commenting.

Leave a Comment

CommentLuv badge