Good morning fellow dividend growth investors and personal finance enthusiasts!
Today I’m reviewing some of the stocks on my potential buy list. I recently got my tax refund back so it’s time to go shopping for stocks. 🙂
I’ve broken the list down into two parts, stocks that I already own and would like to add more to, and stocks that would be new additions to my portfolio.
First off, the stocks I currently own and would consider adding to.
General Electric (GE)-With a P/E of 17.3 I think GE is trading at fair value and I’d like to add more to position in the stock. With an increased focus on returning to its industrial roots and reducing the size and spinning off portions of its financial arm the company looks to be returning to its former dividend growth blue chip status.
McDonald’s (MCD)-Although shares have popped a little since my last purchase, I’d like to add more on a pullback as I have just a small position. While MCD doesn’t have as much of a margin of safety in the share price as I’d normally like, with a very long-term investing horizon, I feel comfortable paying up a little for a quality stock as I detailed here.
Philip Morris (PM)-Even though the price has rebounded a bit since my last Buy List post, the international tobacco giant continues to trade well below its 52 week highs and currently yields 4.5% at today’s levels.
Target (TGT)-This stock continues to be punished after a weak roll-out in Canada and the data breach during the last holiday shopping season. Like KO, I plan on continuing to dollar cost average into this stock using Loyal3.
Now for stocks that would be new additions to my portfolio.
Aflac (AFL)-The insurance dividend champion continues to trade at an attractive valuation with a current P/E of just 9.1. With its strong dividend growth rates AFL should make a great long-term holding and also give me some exposure to the financial sector since I recently sold my shares in Powershares Financial Preferred ETF (PGF).
General Mills (GIS)-Man, I so wish I had just bought this when I was starting out and it was trading in the low 40’s. I’m still waiting for a slight pull back before initiating a position as the diversified food company continues to trade at a premium to its historic P/E but with a long-term investing horizon I may consider adding it if it dips below $50.
Kinder Morgan Management (KMR)-I recently purchased KMI in my Roth IRA last month. Rather than adding more to this position I was thinking of adding Kinder Morgan Management. KMR provides a similar yield to Kinder Morgan Partners (KMP), the master limited partnership, and issues stock dividends so you don’t have to worry about dealing with a K-1 come tax time. Once you decide to sell your position, you are given a 1099 just like with regular dividend growth stocks. Since it is structured as an LLC C-Corp it can be held in a retirement account so I’m thinking of adding this to my Roth to shield those future capital gains.
Visa (V)-Wait, what? Isn’t Visa a growth stock, I thought you were a dividend growth investor? 😉 With its low yield (currently less than 1%), it’s easy to look at V as only a growth stock and forget that it now has a 7 year history of raising dividends and a very impressive dividend growth rate as well. It currently sports dividend growth rates of: 40.4% for 1 year, 38.3% for 3 year, and 45.9% for its 5 year average. With shares pulling back below $200 a share recently, off from a 52 week high of $235, Visa looks attractively valued at today’s levels for starting a long-term position.
Full Disclosure: I am long KO, GE, KMI, MCD, PM, TGT, and may initiate long positions in AFL, GIS, KMR, and V over the coming weeks. For a full list of all my holding please visit my portfolio page. As always don’t take anything I post here as a buy or sell recommendation and I highly encourage you to do your own research before investing.
What do you think of these stocks? Do you hold any of these in your portfolio or looking to add them? Let me know in the comments! 🙂