Monthly Stock Report: 30 April 2019

Overall the stock market continues to edge higher with the S&P 500 moving beyond its previous high of 2940.91 over the last few days.  As such, most stocks have moved higher as well, leaving very few dividend stocks in the “on sale” zone.

*All values and prices presented below are based on split adjusted prices only and do not include dividend adjusted prices.  As a result, prices presented which involve past prices in calculations might not match those found in other sources.  Here a two discussions concerning “adjusted” prices.

https://www.investopedia.com/terms/a/adjusted_closing_price.asp

https://www.investopedia.com/articles/stocks/07/dividend_implications.asp

**RSI – Relative Strength Index.  RSI is a price momentum technical indicator.  RSI values can be reported as differing values due to different periods and smoothing factors employed in their calculation.  The RSI presented here is for 14 months and smoothed (weighted) for 14 periods.  Here is a discussion of RSI.

https://www.investopedia.com/terms/r/rsi.asp

 

Category 1 (Utilities & REITs)

AT&T (T)

  • Diversified telecommunications & entertainment media
  • Close:  $30.96
  • Dividend yield:  6.5%
  • Dividend yield is 18% above 5 year median of 5.5%
  • 34 consecutive calendar year dividend increases
  • 7 year dividend growth:  +2%
  • 7 year price growth:  -1%
  • 7 year div growth > 7 year price growth is an on sale factor
  • RSI (14):  42.5  (< 50 considered on sale)
  • C/M:  -13% to the 60 month moving average of $35.78  (< 0% on sale)
  • C/M value of -13% is less than the 5 year median of -11%
  • 28% correction from 5 year high monthly close of $43.29 (July 2017)
  • AT&T has underperformed the SPDR S&P 500 ETF (SPY) by 9% over the last year
  • 14% below the 60 month high-low monthly close midpoint price of $35.93

AT&T has moved up from its December 2018 low monthly close of $28.56 but still has an attractive dividend yield with numerous other “on sale” values as well.   AT&T is working its way through its merger with Time Warner and has incurred significant debt as a result.  AT&T has a reported free cash flow per share value of $4.49 versus a forward dividend of $2.04 creating a free cash payout ratio 45%, which supports the safety of its dividend going forward.

AT&T is at an attractive entry point for those looking to collect and reinvest dividends.

 

Category 2 (Industrial Finished Products)

NONE

 

Category 3 (Industrial Related Products and Services)

Albemarle Corp (ALB)

  • Specialty chemicals, precursors & minerals for industrial manufacturing
  • Close:  $75.06
  • Dividend yield:  1.8%
  • Dividend yield is 29% above 5 year median of 1.4%
  • 25 consecutive calendar year dividend increases
  • 7 year dividend growth:  +10%
  • 7 year price growth:  +2%
  • 7 year div growth > 7 year price growth is an on sale factor
  • Lowest monthly close in 2 years
  • RSI (14):  32.1  (< 50 considered on sale)
  • C/M:  -9% to the 60 month moving average of $82.08  (< 0% on sale)
  • 47% correction from 5 year high monthly close of $140.89 (Oct 2017) [≥ 30% on sale]
  • Albermarle has underperformed the SPDR S&P 500 ETF (SPY) by 22% over the last year
  • 19% below the 60 month high-low monthly close midpoint price of $92.50

Albemarle has moved lower from its December 2018 low monthly close of $77.02 and has a moderately attractive dividend yield with numerous other “on sale” values as well.   Albemarle has a reported  total cash per share value of $21 which is significantly higher than its forward dividend of $1.47, providing a large degree of dividend safety.

Albemarle is at an attractive entry point for those looking to collect and reinvest dividends, especially for those with a long term time frame.

 

Category 4 (Consumer Necessities)

Walgreens Boots Alliance (WBA)

  • Pharmacy & consumer health services
  • Close:  $53.57
  • Dividend yield:  3.0%
  • Dividend yield is 58% above 5 year median of 1.9%
  • 43 consecutive calendar year dividend increases
  • 7 year dividend growth:  +11%
  • 7 year price growth:  +6%
  • 7 year div growth > 7 year price growth is an on sale factor
  • Lowest monthly close in 5 years
  • RSI (14):  32.8  (<50 considered on sale)
  • C/M:  -30% to the 60 month moving average of $76.33  (≤ -30% oversold)
  • C/M value of -30% is less than the 5 year median of -9%
  • 45% correction from 5 year high monthly close of $96.63 (July 2015) [≥ 30% on sale]
  • 45% correction is greater than the 5 year median of 35%
  • Walgreens has underperformed the SPDR S&P 500 ETF (SPY) by 38% over the last year (≤ -30% oversold)
  • 31% below the 60 month high-low monthly close midpoint price of $77.95 (≥ 30% oversold)

Walgreens is making a significant new low close with a correction that is near the 50% level from its 5 year high monthly close.  The current dividend yield is very attractive versus the recent 5 year median.  Walgreens has a reported free cash flow per share value of $4.40 versus a forward dividend of $1.56 creating a free cash payout ratio greater than 100%, which solidly supports the safety of its dividend going forward.

Walgreens Boots Alliance is at a very attractive entry point for those looking to collect and reinvest dividends.

 

Bristol-Myers Squibb (BMY)

  • Pharmaceuticals & diversified consumer health
  • Close:  $46.43
  • Dividend yield:  3.4%
  • Dividend yield is 13% above 5 year median of 3.0%
  • 12 consecutive calendar year dividend increases
  • 7 year dividend growth:  +3%
  • 7 year price growth:  – 0.5%
  • 7 year div growth > 7 year price growth is an on sale factor
  • Lowest monthly close in 5 years
  • RSI (14):  30.6  (< 0 considered on sale)
  • C/M:  -21% to the 60 month moving average of $58.80  (< 0% on sale)
  • C/M value of -21% is less than the 5 year median of -18%
  • 38% correction from 5 year high monthly close of $74.81 (July 2016) [≥ 30% on sale]
  • 38% correction is greater than the 5 year median of 31%
  • Bristol-Myerss has underperformed the SPDR S&P 500 ETF (SPY) by 26% over the last year
  • 24% below the 60 month high-low monthly close midpoint price of $61.26

Bristol-Myers is currently pursuing a merger with the biopharmaceutical company Celgene (CELG), which has put downward pressure on the stock.  Bristol-Myers has a reported free cash flow per share value of $2.57 versus a forward dividend of $1.64 creating a free cash payout ratio of 57%, which solidly supports the safety of its dividend going forward.

Bristol-Myers Squibb is at a very attractive entry point for those looking to collect and reinvest dividends.

 

CVS Health (CVS)

  • Pharmacy services, consumer health, and health insurance plans
  • Close:  $54.58
  • Dividend yield:  3.5%
  • Dividend yield is 233% above 5 year median of 1.5%
  • CVS Health has maintained its quarterly dividend at 0.50¢ since January 2018
  • 7 year dividend growth:  +19%
  • 7 year price growth:  +3%
  • 7 year div growth > 7 year price growth is an on sale factor
  • One month removed from its lowest monthly close in 6 years of $53.93
  • RSI (14):  33.6  (< 0 considered on sale)
  • C/M:  -35% to the 60 month moving average of $83.17  (≤ -30% oversold)
  • C/M value of -35% is less than the 5 year median of -10%
  • 52% correction from 5 year high monthly close of $112.47 (July 2015) [≥ 50% oversold]
  • 52% correction is greater than the 5 year median of 42%
  • Bristol-Myerss has underperformed the SPDR S&P 500 ETF (SPY) by 33% over the last year (≤ -30% oversold)
  • 35% below the 60 month high-low monthly close midpoint price of $83.20 (≥ 30% oversold)

CVS Health is working through its recent merger with the Aetna Insurance, which has put downward pressure on the stock.  CVS Health has a reported free cash flow per share value of $9.52 versus a forward dividend of $2.00 creating a free cash payout ratio well above 100%, which solidly supports its dividend going forward.

CVS Health is at a very attractive entry point for those looking to collect and reinvest dividends over the long term.

 

Kraft Heinz (KHC)

  • Branded packaged foods
  • Close:  $33.24
  • Dividend yield:  4.8%
  • Dividend yield is 50% above 5 year median of 3.2%
  • Recently reduced the quarterly dividend from 0.625¢ to 0.40¢
  • 5 year dividend growth:  +2%
  • 5 year price growth:  -4%
  • 7 year div growth > 7 year price growth is an on sale factor
  • RSI (14):  19.0  (< 30 oversold)
  • C/M:  -53% to the 60 month moving average of $71.15  (≤ -30% oversold)
  • C/M value of -30% is less than the 5 year median of -24%
  • 64% correction from 5 year high monthly close of $92.20 (May 2017) [≥ 50% oversold]
  • 65% correction is greater than the 5 year median of 40%
  • Kraft Heinz has underperformed the SPDR S&P 500 ETF (SPY) by 48% over the last year (≤ -30% oversold)
  • 47% below the 60 month high-low monthly close midpoint price of $62.54 (≥ 30% oversold)

Here’s an article from The Motley Fool discussing Kraft Heinz.

https://www.yahoo.com/finance/news/kraft-heinz-value-stock-falling-144500363.html

Kraft Heinz has stabilized around $32 over the past 2 months and is still oversold via multiple technical signals, which is not surprising considering its recent 15 billion dollar accounting write down and 35% dividend reduction.  Kraft Heinz has a reported total cash per share value of $3.72 which is significantly higher than its forward dividend of $1.60.  While it obviously didn’t stop the dividend reduction, it should give investors some sense of dividend security going forward.  Kraft Heinz is going to continue to sell its products, making billions of dollars as it does.  Dividend reductions and bad news from legacy-type companies often provide superior investment entry points for those with a long-term view.

For those less risk averse investors, Kraft Heinz is at a potentially good long-term entry point.

 

Author: The Dividend Collector

Searching for dividends on sale.

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