Last month turned out to have a surplus of buying opportunities thanks to the market volatility that occurred, and allowed me to not only add to existing positions but also establish a new position.
As we are about a week into the new month, we are still seeing some market swings where stocks are up for a day or two and then have a modest pullback. It hasn’t been quite as volatile as what we saw in October, but I do believe there are still opportunities to add quality dividend stocks at reasonable prices.
The downside from October was that there were more buying opportunities than I had capital to go around, and some of the companies on my watch list now have already had a decent recovery from their lows over the last month.
Here are a few that I am keeping an eye on this month:
Founded in 1872, Kimberly-Clark has been become one of the largest global manufacturers of tissue and hygiene related products with some of their more well-known brands being Huggies, Kleenex, Cottonelle, Scott, and Kotex.
During the month of October, $KMB saw prices decline nearly 11% and currently pays a $4.00/share annual dividend. They have a streak of increasing their dividend successfully for the last 46 years as well, and have been growing their dividend in the neighborhood of 5% over the last 5-10 years.
With the recent price decline, their current dividend yield is at 3.73% and that is approximately 20% above their 5-year average yield. Their P/E ratio is at 16.2 and that is not only below their 5-year average ratio but also below the Consumer Staples sector as a whole. While the price was much more attractive at the low in October around $102/share, I still find them attractive at current prices.
Kellogg was on my October Watch List and the price is right in that range that I mentioned that I’d like to be adding to my position.
In addition, I am drawn to Kellogg as it is currently one of my more underweight positions in my portfolio. Their dividend yield has bumped up to 3.44% since I last looked at them and this is about 15% above their 5-year average yield of 3.00%.
Given that this position is underweight in my portfolio and I find the price to be quite attractive here, I expect that Kellogg may be one of the first that I look to buy here in November.
Exxon Mobile Corporation
Exxon is another company that was on my last watch list, however at the time I noted that I really wanted to see the price down below $80/share but didn’t expect we would see those levels.
The crazy ride in October did see the price drop below $80/share, but unfortunately I was deploying capital elsewhere and wasn’t able to add any shares. Exxon Mobile has a 36-year track record of increasing dividends but with a more modest growth rate. With the current price movement, their yield is at 4.01% and that is hard to resist.
While the share price has recovered and moved back above $80.00, I will remain patient and watch for a dip that will allow me to add more to my position.
Additional Stocks to Watch
While I will be focusing on the three stocks above, there are a handful of others that continue to be on my watch list and look attractive right now.
I’ve been watching Prudential Financial for a couple of months and they are another one that dropped down to a very attractive price in October but I wasn’t able to pull the trigger.
I am also keeping an eye on OGE Energy Corporation, as they have a respectable 12-year history of increasing their dividend and most recently raised the dividend by nearly 10% back in September. With a current yield of 3.87% I believe that they are close to fairly valued right now.
One last company that I’ve been monitoring is Disney. While they are a low-yield stock, they have generally had very robust growth and with their plans to enter into the streaming market I think they may make some noise given their library of entertainment. The price is a little high for my taste right now, but should they come down around $110/share I may be a buyer.
We went from a quiet month in September to one that had an excess of buying opportunities in October–to the point where there were more stocks that I wanted to buy than I had capital to deploy.
The stock market seems to be calming down a little bit, however I do believe we will continue to see the ups and downs that should present attractive prices.
While I don’t expect that I will be able to deploy nearly as much capital as I did in October, I am looking forward to making some purchases with a focus on some of the more underweight positions in my portfolio.
What is on your radar for November?