November Stock Considerations

As the month of November begins I look at my portfolio holdings and wonder where I’d like to deploy my cash. This is the first month where I don’t really have a clear conviction of where I’d like to invest as the market has reached an all time high and many stocks have rebounded greatly from our mid October dip. Of course, some energy names still look attractive as oil remains depressed and a few of my holdings are still in the red as I usually prefer to average down a position instead of initiating a new one. That being said, let’s examine some of the names that are on my radar for November.

 

First off, as no surprise, I am still favorably looking at the large Canadian banks, specifically the ones in my ROTH account. Those names include, The Bank of Nova Scotia (BNS), The Toronto-Dominion Bank (TD) and Royal Bank of Canada (RY). While all slightly in the red, it might be a good month to add to some of those existing positions and bring my cost down a bit more. In general, I like to wait for a price drop of about 5% or more before adding to a position but it’s not a hard rule I follow, rather a guideline. Sticking with the large Canadian banks, I also have been eyeing, but do not yet have a position in Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CM).

 

BMO currently yields a generous 3.80% with a moderate payout ratio of 51.1%. Besides its attractive dividend yield and history, BMO looks attractively valued with a current PE of 12.40 and an even more attractive forward PE of just 10.25.

 

CM is another top pick of mine in the Canadian banking sector with its large 4.00% yield and moderate payout ratio of 48.7%. These Canadian banks seem to both be offering great relative value as CM’s current PE is 12.74 with an even more enticing forward PE of 9.70 making it one of the cheapest, at least from a strict PE perspective, large Canadian banks.

 

Moving into the consumer space I am slightly down on another holding of mine in my ROTH account, Unilever plc (UL). As I mentioned earlier, my preference is to average down on any position I currently hold which would put BNS, TD, RY and UL at the forefront of my November stock picks.

 

As you can see, I am more focused on averaging down on several of my ROTH positions while leaving my taxable account alone for now. Of course, there are other names in my taxable account that also interest me to which I have not added to some of these positions in a while simply because I feel that share price has run way ahead of earnings. I still feel strongly about holding these positions and do not plan to sell anytime soon, I just wish their valuations would come down to Earth a bit before pulling the trigger. Some of those names include, V.F. Corporation (VFC), W.W. Grainger, Inc. (GWW), Bemis Company, Inc. (BMS), CR Bard Inc. (BCR) (I’d like the yield to be a bit higher on that one) and Becton, Dickinson and Company (BDX). I wrote about many of these names a while back in a post titled, โ€œDividend Aristocrats You Never Heard Of.โ€

 

What are some of your stock considerations for November? Are any of the names on my current list on yours as well? Please let me know below.

 

Disclosure: Long BNS, TD, RY, UL, VFC, GWW, BMS, BDX

37 thoughts on “November Stock Considerations

  1. Keith,

    good to see that you are consistently adding to your portfolio.
    I am a novice on Canadian banks but they look quite interesting, especially BNS. Good luck with those.
    Stocks like VFC and DIS could use a dip for sure. Let’s hope we get one.

    Have fun shopping
    Grow Independent recently posted…New HopeMy Profile

    • Hi GI,

      I think that ‘consistent’ is a great word to describe my investing style. I always like to invest every single month no matter what the market is doing. Whether it was during to 2008/9 sell off or during the record highs we are experiencing these days. The key is to be consistent and always invest each month.

      I would suggest you look further into the large Canadian banks. There are many dividend bloggers that hold some or all of TD, BNS, RY, BMO, CM in their portfolios. They have great dividend track records and many can be considered more stable than many of the U.S. banks.

      VFC is one company that seems to be headed in one direction. I really love their brand portfolio and would love to add more to my holdings, ideally under $60. We’ll see. Thank you for commenting.

    • Hi FerdiS,

      I usually tend to consider the more ‘safer’ and ‘boring’ dividend stocks in my portfolio. As you can see I own no MLPs, REITs or other high yield plays. I always like to qualify that statement by saying, “not that I’m against them,” as I do like several health care REIT plays as well such as VTR, HCP and OHI. I just haven’t pulled the trigger yet. In any case, I look forward to seeing your watch list for the coming month and wonder if we’ll have any overlap. Thanks for stopping by and commenting.

    • Hi DM,

      You have to love UL at around $40 or below. I fully agree with you, and seemingly many other dividend bloggers, as to the attractiveness of UL in recent weeks. Let’s see how November unfolds. If October was any indication we may have to buckle up. Thanks for commenting.

    • Hi Seraph,

      After the roller coaster of October I really felt, for the first time in a long time, a little unsure of where I want to invest. At least in the spring and early summer, when the markets were at their highs, I felt more comfortable investing in financial or considered energy names. Now with oil in a seeming free fall, markets dropping 8%+ in a couple weeks only to rebound to all time highs two weeks later has left me a little unsure. I will most likely feel most comfortable adding to my existing positions and average down, unless, as you said, Mr. Market decides to give us some new breaks. Keep watching UL as it seems to be the hot stock in recent weeks among the dividend bloggers. Thanks for your comment.

  2. Nice list DivHut,
    Unilever and a few other got very close to my price target mid month, but didn’t quite get there. If I had been off of work, I probably would have bought……but I was tied up instead. Hoping for more opportunities in the coming weeks. It looks like I’m back to digging for deep value investments, until the next sell off. I found two prospects last week however ๐Ÿ™‚
    -Bryan
    Income Surfer recently posted…Deep Value Purchase and a New Frugal FindMy Profile

    • Hi IS,

      UL is the popular name these days among a few others. I think once they went below $40 for a few days it got the attention of many dividend bloggers. Let’s see if a repeat of October will happen this month. Watching/reading the talking heads doesn’t clear anything up either as they are all guessing themselves. One says the market will be higher, one says the market will be lower and one says it will stay flat. I am 100% certain one of those three opinions will be correct. Curious to see what value ideas you have come up with. I still see some relative value is many of the financial names such as AFL, CB, WFC, TD, BNS, RY and of course many energy plays too such as BP, TOT, CVX, XOM, etc. Thank you for stopping by and commenting.

      • Hi dm,

        You and me both. VFC has been on a tear for multiple years and though I love their brands too I’m just not willing to pay up on its current PE at the current yield. I am definitely keeping my eye on it for the future.

  3. I have too much energy and need some consumer staples. PG, UL, GIS, or Krft is on my radar. I’m more curious as to what Mr. Market will do after the elections

    • Hi TBDI,

      I think everyone is waiting for after Tuesday to see where the elections take us. Quite frankly, I don’t think election day news will sway the markets one way or another. I think other catalysts will prove to be more influential than the current election. You have some solid names as well that you are considering. All are in my portfolio and, except for UL, have been with me for about seven years now. I like KRFT the most from your list even though they aren’t the fastest of growers. Thanks for sharing your watch list and commenting.

    • Hi LAH,

      GWW, like many other retailers (TGT and WMT) are swiftly increasing their online presence and boosting their annual Internet sales. I think the Internet will complement their brick and mortar business and will not be their demise as other retailers have been experiencing. The products GWW offers is unique among the retail space as they essentially sell the stuff that makes business possible.

      E-commerce sales for GWW surpassed $3 billion in 2013 with 33% of their total sales coming from the Internet. I think GWW is headed in the right direction as they transition their sales to an ever increasing growing Internet pie. Thank you for stopping by and asking a great question.

    • Hi Tawcan,

      I’m still in the red a little with my Canadian bank holdings and UL slightly so those names have first crack at my new money for the month. Of course, we’ll see how things develop over the coming days and week. Mr. Market has a way of messing up some of your best laid plans. If UL remains at $40 or below, why not consider adding it to your taxable account? Thanks for commenting.

    • Hi FFF,

      No reason to feel pressure to buy anything your aren’t comfortable with. Do your own research of course and only then, when you are fully ready to make a purchase go for it. But also remember, analysis paralysis can keep you from making any purchase in the first place. I literally have a friend that for the past three or four years has been telling me he is waiting for a market crash before he buys stock. I keep telling him that “time in the market is better than timing the market,” and that he is losing out on several years of dividend compounding too. Again, buy any stock once you are fully ready to commit. We’ll see how the market starts to flow this first week of November and I wonder what I’ll be doing myself in terms of money deployment. Thanks for stopping by and commenting.

  4. My plan is to take a closer look at some of the Canadian banks again because they weathered the financial crisis fairly easily. Plus the yields are pretty nice. I’m thinking of averaging down on IBM and UL wouldn’t be a bad pickup if it dips back under $40 although probably closer to the $39 range for me. BP is another company that’s pretty high on my list for purchase. Thanks for the update.
    JC recently posted…Dividend Update – October 2014My Profile

    • Hi JC,

      I like your UL and BP considerations from your comment. UL is the pick of the day at $40 or below. Many of the DGI bloggers have been or are going to pick shares up at those levels. I too, have been watching BP. It has come down a lot since the summer along with many other energy names but hasn’t quite bounced back yet. Let’s see how November unfolds. Thanks for sharing your investment ideas.

    • Hi R2R,

      Whether I’m looking to average down or simply initiate positions, those names I mention are all solid long term picks. It just so happens I have some red in my portfolio so I’ll most likely be looking to average down a position or two. Curious to see your BMO analysis. Thanks for stopping by and commenting.

    • Hi DGJ,

      I too was light in finance which is why for many months I have been adding to my AFL, WFC and CB with new additions TD, BNS and RY in the last couple of months. For now I feel I have adequate diversification between banks and insurance companies and will now look to increase my holdings in the newer positions I initiated. The other stocks I mentioned are all great long term dividend payers, and I’d love to add more to GWW, VFC, BMS, etc., but not at these levels. I’ll keep watching those as well. Thanks for commenting.

    • Hi J,

      GWW has gone up so much since the 2009 lows. I’d like a stock split to make the shares a little more affordable. While I like the company very much, I am not willing to pay its current multiple. If I see a slightly lower PE or higher yield I may consider it again but for now it looks like I’ll stay on the sidelines for that one. Same with VFC, BCR and the other names I have mentioned. All are really great long term dividend payers but not at current PEs. Thanks for commenting.

  5. Hi, DivHut.
    I’m really digging the website. You’ve got great content and a very good diversification within your portfolio. I’m looking forward to digging into some of your older posts. In regards to the post, I really like the Canadian banks especially BNS & TD. Both of these banks appears to have a lot of runway available to continue increasing their dividends. However, I’m pretty worried that the U.S. banking environment is becoming too competitive once again, so I’d choose BNS over TD at the moment. Best wishes for continued success!

    Goosemann Jones
    Flight to Dividends Blog
    Goosemann Jones recently posted…Laying the FoundationMy Profile

    • Hi GJ,

      I’m happy you are finding value on my site and are enjoying the content. DivHut is my real world dividend investing chronicle along with various posts about different dividend investing themes. The way I see it, dividend investing doesn’t have to be difficult. Simply look at the products or services you use on a daily basis and find the companies that offer those products/services as a starting point for a dividend growth portfolio. You will see from my portfolio that I am probably among the more conservative bloggers online as I currently do not own any high yield REITs or MLPs as many others do. I never chase yield, rather long term dividend growth. I do have some REITs and MLPs on my watch list, as I’m not against those investment vehicles, I just won’t overly invest in those simply to achieve a high current yield.

      The large Canadian banks are great. TD, BNS, RY, CM and BMO. I own three of the five and along with WFC I feel content with my exposure to banking in my portfolio. The U.S. banking environment is still on shakier foundations relative to the Canadian banks which is why I looked north for more banking exposure. The only two U.S. banks I like for a long term portfolio are WFC and USB. I appreciate you stopping by and commenting. Please check back as I update my dividend purchases on my blog. Look forward to reading about your progress as well.

  6. I am super with you on BNS/RY. Just made my watchlist post for the month and thought ‘hmmm, wonder if Div Hut is thinking the same thing…’ low and beyold, yup! Also somewhat considering a second REIT position, but not sure yet.

    As for the other stocks you mentioned, they all look interesting but are out of my reach at the moment till I can start a USD account one day…

    Best of luck!
    Dividend Wisp recently posted…Next Buy Watchlist: Nov. 2014My Profile

    • Hi DW,

      Thanks for sharing your thoughts on some November buys. I’m still looking to make my November purchase but it certainly seems like I’ll be averaging down on one of my current positions with BNS as a frontrunner. As for REITs, I don’t have any yet but am looking to HCP, VTR and OHI. As always I appreciate your comment.

  7. Hi DivHut,

    nice fine little stocks in your โ€œDividend Aristocrats You Never Heard Of.โ€ – list! ๐Ÿ˜‰ Unilever is now in my depot with an initial stake – in Nov i began to excecute my Joe Average Portfilio with buying into Global Titans 2,5% Yield, Stoxx 600 Telecommunications 4,5% Yield and Stoxx 600 Utilities 4,00% Yield via savings plan a โ‚ฌ50 per month – its something new in the world of DGI-Style but i like to be a contrarian ๐Ÿ™‚
    Architritrans recently posted…Out In Left Field – BuyMy Profile

    • Hi Architritrans,

      Glad you liked my article โ€œDividend Aristocrats You Never Heard Of.โ€ There are some real gems in that list that I think get overlooked by many dividend growth investors. Too often we are focused on the more common names such and PG and KO for example. Thanks for sharing your “Joe Average Portfolio” picks too. Nothing wrong with having a contrarian attitude towards investing. Sometimes those picks can be the ones with the greatest gains. You should take a look at my recent article titled, “Is It Wise To Buy Stock After A Catastrophic Event?” which discusses this contrarian notion of buying companies that have experienced a catastrophe. Thank you for stopping by and commenting.

  8. Hi DivHut,

    I am finding myself in a similar situation; unsure of my next buy(s). I bought a lot of stocks during the dips in October and now we’re once again at all time highs. I want to invest more money, but it’s kind of hard to do so when it would be costing more and also averaging up my cost. Oil companies I’m invested in, BP and PSX have taken a beating, but seem to have regained some. Just not sure I want to increase my positions in that sector. Good idea on Canadian banks though, I’ll have to look into them. Decisions, decisions.

    – HMB

    • Hi HMB,

      You know the saying, “so many great stocks, so little capital.” I understand your hesitation at these high market levels and the idea of averaging up a cost doesn’t sit well as averaging down. But, you have to look at it from the perspective that if you are averaging up constantly you are always picking winners. Not a bad situation to be in. I think BP around $40 is a decent price to pay considering it was over $50 not that long ago and the low oil prices seem to already be baked in. Another strong foreign oil play that dropped a lot was TOT. I still have another week and a half to make my November buy but if I don’t pull the trigger, I’ll have just that much more to buy in December. Thanks for stopping by and commenting.

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