Category Archives: Dividend Achiever Watch List

We ended the week with S&P 500 crossing a major milestone of 4,000 which is also its all-time high. This market continue to push forward despite any minor correction along the way. One year ago, it wasn’t obvious that we would make all-time high or reach the 4,000 level. Our list from last year performed extremely well but so did the market. Below is a snapshot of various fundamental strategies compared to the broader market.

Best performer was buying low P/B companies which rose 137.3%. One thing to note that coming out of the bear market, companies with extreme valuation, one that under-perform, will out-perform on the way up. Take Invesco (IVZ) as an example, the stock reached the high of $38.40 in 2018 and reached the low of $6.70 in May 2020. That decline of 82% is drastic and the market was closing to pricing Invesco as if they would be out of business. The stock is currently at $25.75 which is 284% from the low but that is still far from the $38.40 level we saw in 2018. All this is to suggest that the risk and reward are high under that circumstances.

U.S. Dividend Watch List: April 2, 2021

As we mentioned before, the market continue to make its way higher. However, there are pocket of areas to watch out for. The Nasdaq has lagged the other indexes in making all-time high. For more detail on our analysis of the current market, review out NLO Market Indicator. Continue reading →

This week mark a year into COVID-19 pandemic. We saw tremendous drop in equity value followed by extreme rebound. The shift to bear market and shifted back to bull market was likely the fastest one in history. One year ago, our watch list had nearly 200 companies on it. S&P 500 rose 70% in one year and some strategies produced exceptional return far greater than the market. However, this is expected as March 23rd was virtually the bottom of the market. Some companies were trading as if they were going out of business. Below are various strategies performance.

High yield, low P/E, and low P/B produced exceptional gain due to the risk factor coupled with how low their stock price went. As an example, Lincoln Financial (LNC) went from $65 to $17 (-73%) in one month. Unum (UNM) went from $30 to $10 (-65%) in one month. Bigger drop produced bigger rebound.

U.S. Dividend Watch List: March 19, 2021

We pushed through all-time high on major indexes but they couldn’t follow through on Friday. A consolidation at this level would be healthy for the bull to continue its course. There appears to be a shift from growth to value name. If that’s the fact, we see no better place to start your research than with our watch list which contains blue chip name trading at or near their low. Continue reading →

It was a choppy ride for the market this week as some gains were given back from prior weeks. Looking back one year ago, February 28th was the first sign the market was beginning to crack.

There were 195 companies on our watch list last week. In addition to that, the Dow Transports broke its support line and pushed our Dow Theory Indicator into negative territory on March 3rd (more on this indicator).

The best strategy was low Payout Ratio stocks which produced +22.90% return with the best performing stock being WSFS Financial (WSFS) with gains of +54%.

In the same group, Vornado Realty Trust (VNO) lost nearly -20% in a year. Vornado Realty Trust had the lowest P/E ratio at 3.3 on our list. The company earned $16.21 per share at this time last year but those earning evaporated as Vornado is now losing –$1.83 per share. Below is a breakdown of various strategies.

U.S. Dividend Watch List: February 26, 2021

The spiked in bond yields could be contributing to the recent market sell-off. We started February at +1.09% on the 10 years note and closed the month at +1.44%, a 32% increase. As people start chasing fast money with penny stocks, one might find better values from companies on our watch list below. There are plenty to choose from as a starting point for your research. Continue reading →

The bull market continues to push forward as we end the week with the Dow Jones Industrial Average and Dow Jones Transportation Average closing at their all-time high. The recent bullish Dow Theory signal should not be ignored.

Reviewing our list from last year, the best performing strategy was high P/B with gain of +24.30%. Gains were driven by two stocks with high P/B, Xilinx (XLNX) +62% and Erie Indemnity (ERIE) +60%. On the opposite spectrum, High P/E had the worst performance with State Auto Financial (STFC) declining –44%. Reviewing the table below, the growth strategy  continues to outperform.

U.S. Dividend Watch List: February 12, 2021

Bull markets leave little room for companies to trade near their 52-week low. Because of that, we have to broaden the range of stocks that we track from within 10% of the 52-week low to 20% of the 52-week low.

Despite that, there are plenty of great companies with long track records of dividend payments and increases on this list. Continue reading →

This market continue to press forward and pushing the upper limit. It is fascinating to review the last year list to see what strategy did well and which one did not. The table below highlights the returns based on the top 5 companies under various fundamental metrics.

As expected, the S&P 500 did well rising 16.6% which one could argue is above the average long term rate of equity at 10%. Keeping pace with the market was low payout ratio which gained an average of 14.4%. The best return came from Evercore (EVR), a financial services company, whose stock rose 53.5% despite a drop of 53% at the bottom in March. Another company that stock rose 26.1% was Expeditors International (EXPD), a logistic company.

On the opposite spectrum, high yield stocks dropped 18.7%. Largest decline from this group was H&R Block (HRB) which fell 30.3% in one year. At the time of the list publication, their dividend yield was 4.3%. The stock fell as much as 50% at March 2020 low but fail gain ground. Revenue fell roughly 15% from prior year but expense rose 3%. Free cash flow went from 511,048 in 2019 to 27,276 in 2020 (-95%).

U.S. Dividend Watch List: January 22, 2021

With the market rising week after week, there are few companies trading near their yearly low. Because of that, we’ve broaden the range from 10% of the low to 20%. Below is the first watch list for this year. Continue reading →

The new year brings new highs and it appears there’s little to slow this market down. The table below highlights the returns based on the top 5 companies under various fundamental metrics.

The S&P 500 did extremely well, given the backdrop of the pandemic, rising +17%. The DJIA on the other hand struggled to gain ground and ended the year virtually flat. The best strategy from last year’s list was to buy high P/B companies which are listed below.

U.S. Dividend Watch List: January 3, 2020

With the market rising week after week, there are few companies trading near their yearly low. Because of that, we’ve broaden the range from 10% of the low to 20%. Below is the first watch list for this year. Continue reading →

In reviewing last year’s list, we see that the best strategy was the high P/B category which returned +5.90%, although the market propelled higher by +14.90%.

The largest gain was driven by Clorox (CLX) which, at the time, was trading at a staggering 33x of its book value. Now compare that with American National Insurance (ANAT) which was trading at 0.55x book value. The stock fell -31%.

On average, 3 stocks trading below book value lost -20% of its value in one year. This is the observation we see and simply reporting on the data. The table is a summary table for various strategies.

Again, we continue to see the traditional value approach underperform.

U.S. Dividend Watch List: November 13, 2020

We saw another all-time high for the market this week. If the Dow Industrial and S&P 500 can consolidate and hold this level, it will be very bullish. This strong market is the reason why there are only 4 companies on our list. Continue reading →

Review last year’s list, we see that closest to the low was the best strategy which lost only 0.6%. The market, however, gained 6.6% since last year. Purchasing companies with low P/E or high dividend yield, a classic value approach, did not work out well.

Majority of the gained came from Clorox (CLX) gained 40.9% and CH Robinson (CHRW) gained 18.4%.

U.S. Dividend Watch List: October 9, 2020

The market pulled back from all-time high and consolidation period will be healthy for this up market to continue. The pull back pushed more companies closer to their yearly low.
Continue reading →

We begin with a look back at last year’s list. The S&P 500 rose 18.3% and the Industrial rose 7.9%. Purchasing the top 5 companies closest to the low would result in a loss of 60.1% while the best strategy was to purchase top 5 companies with highest P/B ratio. One theme is clear from our data, the typical value metrics didn’t work well.

Under the high P/B, 2 best performers were Eli Lilly (LLY) & Clorox (CLX). Hindsight is 20/20 but wouldn’t we all want to own Clorox knowing a pandemic was on the horizon?

U.S. Dividend Watch List: October 9, 2020

The market picked up a slight momentum going into October and we’re seeing a push toward the high. This movement pushed a lot of companies out of their yearly low range but we managed to gather a list for this week. Continue reading →

Take a look at the performance of last year’s list. The S&P 500 rose +11.40% and the Dow was up only +1.30%. The best performing strategy was high P/B which gained +30.50%. The largest drop in value, -63.2%, was the high yield. As we’ve documented before in great detail, chasing yield has not worked out well.

Under the high P/B strategy, we had LLY, CLX, ROL, MMM, and CHRW. Four companies outperformed the market with ROL rising +60.40% while MMM lost -2.60%. High yield companies were ARLP, OXY, PAA, XOM, and WEYS. Interestingly, the highest yield of 13.5%, ARLP, had the largest drop of -82%.

U.S. Dividend Watch List: September 25, 2020

The recent market pullback is starting to give us hope in our watch list. Our list expanded to 44 companies this week. Continue reading →

We begin by reviewing the performance of last year’s list. The table below highlight various fundamental strategies and their performance using the top 5 companies.

The best performing strategy was low yield while low P/E lost tremendous value in one year. Rollins (ROL) gained 57% in a year while Alliance Resource (ARLP) with P/E of 4.56 lost 80%.

U.S. Dividend Watch List: September 11, 2020

A substantial market correction occurred which increased the number of company trading near their yearly low. Below are companies that are current and former Dividend Achiever. Continue reading →

The market is now just a few percentage points away from the all-time high set in February 2020. This test is a critical one for the S&P 500. However, our team will monitor that, as well as, the Dow Theory indicators as a true test of the market sentiment. With the market near the high rather than the low, there are only a handful of companies on our watch list this week. Continue reading →

The 44% rally off the March low appears to be fading. If the market (S&P 500) can’t break through the 3,230 high set in June over the next few weeks, we estimate that 2,800 will be the next leg down. Fears of COVID first wave is a legitimate one and many states are easing restriction while new cases accelerate. Below are 20 companies on our watch list this week. Continue reading →

Prior Year Watch List Review (June 14, 2019)

The best performing strategy from last year was high P/B which fell 7% for the year. This was driven by a gain of 12.3% for Kellogg (K) and 11.5% gain for W.W. Grainger (GWW). However, that gain was offset by a loss of -46% from Nordstrom (JWN). Chasing high yield companies was detrimental with Alliance Resource Partners (ARLP), which at the time yield 12.30%, as it lost -76% in a year. Occidental Petroleum (OXY) with yield of 5.80% lost -62%.

U.S. Dividend Watch List Jun 12, 2020

This market swing from March low pushed many companies above 10% of the low and leaving us with only 5 companies on our dividend watch list despite broadening our criteria to include negative payout ratio. Continue reading →