Five Attractively Valued Stocks I Want to Own:

I’m fresh off my second full week at the new job.  It’s been a big relief stepping back into my roots of piecing together a brand new television show from scratch.  I’m enjoying the constant challenges of determining which story and style to use.  I basically get to solve puzzles each day, and that’s the kind of work I really enjoy.  My current job ends in January, and sometimes it can be tough to find another show right away.  That’s why I’m working so hard to build a rising stream of passive income in my dividend growth portfolio.

I’ve had a busy month of investing so far, but I’m always on the lookout for more opportunities.  A few names I already own and am interested in adding to are Union Pacific Corporation (UNP), T. Rowe Price (TROW), Franklin Resources (BEN), and Chevron (CVX).  I’m also looking at new companies for the portfolio, and this post briefly highlights five attractively valued candidates. (For those unfamiliar with Fast Graphs, when the black current price line moves into the dark green earnings area it indicates the business is undervalued.  Here is a basic demo on how to read fast graphs).

Cisco Systems (CSCO)

  • Sector: Technology / Networking & Communication Devices
  • Years of Dividend Growth: 3
  • Current Yield: 3.0%
  • Forward P/E: 12.35

Cisco Systems Inc is engaged in designing, manufacturing and selling of Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry. ~ Seeking Alpha

2015_June_csco

2015_June_csco2

Eaton Corporation (ETN)

  • Sector: Industrial Goods / Electrical Equipment
  • Years of Dividend Growth: 5
  • Current Yield: 3.2%
  • Forward P/E: 13.01

Eaton Corp PLC is a power management company providing energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power. ~ Seeking Alpha

2015_June_ETN

2015_June_ETN2

Gilead Sciences (GILD)

  • Sector: Healthcare / Biotechnology
  • Years of Dividend Growth: 1
  • Current Yield: 1.4%
  • Forward P/E: 10.82

Gilead Sciences Inc is a research-based bio-pharmaceuticals company that discovers, develops and commercializes new medicines for different medical sectors. ~ Seeking Alpha

2015_June_gild

2015_June_gild2

 

Ventas (VTR)

  • Sector: Financial / REIT
  • Years of Dividend Growth: 5
  • Current Yield: 5.0%

Ventas Inc is a real estate investment trust, with a portfolio of seniors housing and healthcare operations in the United States, Canada and United Kingdom. ~ Seeking Alpha

2015_June_VTR

2015_June_VTR2

 

Exxon Mobil Corporation (XOM)

  • Sector: Basic Materials / Oil & Gas
  • Years of Dividend Growth: 32
  • Current Yield: 3.5%
  • Forward P/E: 15.67

Exxon Mobil Corporation is engaged in energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. ~ Seeking Alpha

2015_June_XOM

2015_June_XOM2

 

What do you think of these ideas?  Which stocks are you watching?

My Dividend Growth

http://www.mydividendgrowth.com

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34 thoughts on “Five Attractively Valued Stocks I Want to Own:
  1. Dividend Diplomatsd

    MDG,

    NICE list there. Loving the REIT and Exxon. Feel like XOM is the best oil play right now, with how low it is trading, the yield VERY attractive AND they increased their dividend this year, whereas most have stalled an increase so far. Keep us posted on what you do!

    -Lanny

     
    Reply
    1. My Dividend Growth

      Hope all is well, Lanny. Glad you enjoyed the list. It’s great XOM caught your eye too, I’m strongly leaning toward this one. The growth isn’t nearly as strong as the other candidates, but the history is much richer.

      Glad to hear from you, cheers!

       
      Reply
  2. The Broke Dividend Investor

    Hi MDG,

    I own GILD and VTR. Both are on my watch list but I am waiting for them to fall during the interest rate scare/ greece scare. I am extremely bullish on healthcare and hospitals. With the ACA subsidies being approved by the US government I predict more and more healthcare coverage that is traditionally not available. Senior living, LTC, no more in-network/out-network care, etc. Eventually the ACA will cover anything and everything.

    And those subsidies will greatly benefit us healthcare shareholders.

     
    Reply
    1. My Dividend Growth

      I’m with you on healthcare, it’s my second largest allocation and I’m a big fan. I wish I had more available contributions for the ROTH or I’d buy VTR right now. I may sell DE or PG in that account if we see a much bigger decline in REITs. I’m just reading that the Greek default looks like it’s back on for Tuesday and it’ll be really interesting to see how the market reacts. I need to put together a list of my top stock picks during a correction, some of those dream companies that never seem to drop in value just in case they do. Great comment, thanks for stopping by!

       
      Reply
  3. JC

    Solud companies Ryan. I just added to my XOM position this past weekand have been looking at adding to my VTR position. I think XOM is a really good value here. I like CSCOs potential as wifi networks get built out and our ever growing data consumption requires more of the background networking. GILD is interesting but theres a huge learning curve to understanding biotech and unfortunately I havent had the time to fully commit myself to learning about it. It’s just not as intuitive as say a PEP or PG. Looks like solid picks and I’ll be interested to see which if any you choose to add. Have a great weekend.

     
    Reply
    1. My Dividend Growth

      I’ve been shying away from the discounted oil majors for too long. I’m really liking XOM’s rich history. You’re in the industry too, so it’s reassuring to see you buying. It was interesting that both CSCO and ETN are having CEO changes coming up. I’ll be curious to see how John Chamber’s successor does, those are some big shoes to fill. It seems they’re still innovating and I’m a big fan of their R&D pipeline. I had to learn a bit about biotech for BAX and JNJ but don’t want a very big allocation to the industry because I completely agree that it’s a bit abstruse for the average investor. GILD seems very undervalued here, but not without risk.

      Hope you have a nice weekend, JC!

       
      Reply
  4. Adam @ IWTRS

    Hey Ryan,

    Im still not sold on GILD but the others all look like solid plays. I havent seen Cisco on a radar in a while.

    How do you like fastGraphs? Is there any info you cant get from them that you have to get elsewhere? Do you find yourself double checking their data ever? Just curious. Looks like a great tool that so many bloggers use but $10 a month is a bit much for me.

    Adam

     
    Reply
    1. My Dividend Growth

      Hi Adam 🙂

      CSCO is growing much faster than the market is representing, too bad I didn’t pick some up near the 52-week low of $22.50. It still seems like a good value here.

      I love fast graphs (no affiliation). I don’t think any single tool is a one stop shop and fast graphs is just the starting point for me. It’s my main screening process. I put my watchlist and the CCC list into the portfolios section for quick and easy viewing of graphs and all kinds of sortable fundamental data. Once I identify attractive candidates I dig in much deeper usually devouring the companies investor relations page for hard numbers and overall analysis, I also read a lot of articles everywhere and use sites like google finance for price charts. To me, fast graphs is the quickest way to see earnings and cash flow valuations. I recommend watching all the youtube tutorial videos to understand the full potential and try taking advantage of the free trail. I like that they allow posting the graphs on blogs too. It seems to help bring in traffic, so keep writing over there because you’ll be able to pay for your subscription and write off the expenses in no time if you stick with it. Cheers!

       
      Reply
  5. roadmap2retire

    Really good list here, Ryan. Also a nice diversified list across different sectors with quality, and strong blue chip names.

    Looking forward to see which ones you pick
    R2R

     
    Reply
    1. My Dividend Growth

      Thank you much, R2R. I wanted a consumer company to make it completely diverse. ADM almost made the list, but I’m still researching. Congrats on your recent buys, you’ve been tearing it up! Always good to hear from you 🙂

       
      Reply
    1. My Dividend Growth

      Hi there! I’m in the same boat not owning these stocks, I’m not sure which one I’ll pick. I think you’ll do well with XOM, and I’d be happy to own it with you at some point. I’m so curious how the market will react to the Greek default news, maybe we’ll see some good deals. Here’s hoping. Thanks for commenting!

       
      Reply
  6. The Dividend Drive

    A really impressive list, Ryan. I have never come across Ventas before. A very interesting looking REIT. I will have to investigate a bit more. Interesting they have operations in the UK as well (something for any UK investor with a home bias!).

    Keep up the great work.

     
    Reply
    1. My Dividend Growth

      Glad you enjoyed it, DD. Ventas is a great company and even has a spin-off on the way. Roadmap2retire, Passive-Income-Pursuit, and Brad Thomas put up some great articles on it if you’re itching to do some reading. I’d be very curious to hear your thoughts if you dig in, and thanks for stopping by!

       
      Reply
  7. FerdiS

    That’s a nice list of candidates… I’ve been thinking about adding to my XOM holdings. Good to see another investor seeing value in XOM.

    I’m intrigued by FAST graphs and see many bloggers using it, though, so far, I haven’t subscribed. Thanks for the link to the tutorials!

     
    Reply
    1. My Dividend Growth

      Good to hear from you, Ferdi. It seems like XOM is trading for really great long term value here. I wonder if this Greek default will bring down the price even more… For some reason I’m still finding it a challenge to pull the trigger based on oil prices, but if the past is any indication, this noise should clear up soon. I think I’m going to have to make a ‘just in case’ purchase. I can always average down if things get super crazy.

      I’d be curious to hear your thoughts if you take the free trial of fast graphs. It saves me a bunch of time and I think it attracts more visitors to the site, it’d be awesome to see a few graphs in your write ups! Cheers!

       
      Reply
  8. Dividend Mantra

    Ryan,

    Great list here. I recently initiated a position in GILD. A somewhat speculative play (in my opinion), but the valuation and growth potential are compelling.

    Are you expecting to be as busy on the buying front in July as you were in June? Let’s keep that train rolling! 🙂

    Best regards.

     
    Reply
    1. My Dividend Growth

      Hi Jason! I’m completely with you on GILD and had to do a double take on the fast graph where it lists the total return on ten thousand dollars invested was now worth over one million. I doubt that’ll happen again with the increased market cap, but there’s still a lot of room to run. Tack on the current valuation and I think you made a super solid purchase as usual.

      A good portion of my June contributions were leftover from last month where I struggled to find attractive valuations. It’s hard to say what July will bring. If we witness the long awaited correction everyone is talking about, I’ll be all over it and blow this month away. If the market lingers or rises, It’ll probably be around my monthly average of $3,300. Here’s hoping we both get a shopping spree we can’t refuse! Always great to hear from you 🙂

       
      Reply
  9. Income Surfer

    Nice list you’ve got here Ryan. I have been finding value in insurance companies like Travelers and National Western Life Insurance (NWLI). I am optimistic that the global bond markets will give us all a chance at dividend growth stalwarts like Pepsico, Johnson & Johnson, and Union Pacific…….. in the very near future. These stocks aren’t overpriced now, but they aren’t cheap either.
    -Bryan

     
    Reply
    1. My Dividend Growth

      Hi Bryan, thanks for stopping by! I’m also a big fan of insurers, it’s easy to see how Buffett was able to grow so fast using them. I hadn’t heard of NWLI though, and I appreciate you pointing it out so I can dig in.

      I hope you’re right about the bond markets and other current noise. There are so many amazing businesses that are always trading for premiums and I’d love to hop aboard. I’m so ready for a pullback! I’m still a little embarrassed of my high cost basis in KO and PG and would love an obvious valuation to present itself where I can backup the truck all across the board. Your blog is awesome and it’s great to hear from you 🙂

       
      Reply
  10. walletengineers

    Currently I’m buying stocks that have already shown long-term dividend history. I’ve owned XOM and will again. The rest are not on my list.

    Thanks,
    WE

     
    Reply
    1. My Dividend Growth

      Long time, WE! Hope all is well for you 🙂 Getting those core DGI positions is huge. It’ll open you up nicely for more growth and speculative plays later on if that’s where your heart is. I’m guessing I’ll see a much higher total annualized return with some of the smaller yielding growth plays, but I wouldn’t have felt comfortable branching out without the safety net of several DGI champions. Wishing you lots of continued success!

       
      Reply
  11. Dividend Explorer

    Gilead Sciences is a compelling company with an attractive forward P/E ratio, been watching them for awhile. Several REITS are on my watch list including Ventas. Many of my purchases this year have been the major oil companies including XOM, I like the depressed prices and attractive dividend yields in the energy sector.

     
    Reply
    1. My Dividend Growth

      Hi DE! The total annualized return of GILD was mind blowing on that fast graph! I can’t ever picture a scenario where I’m invested in it that early, but it’s sure fun to think about and there is still a lot of growth to come. They have some serious cash flow now to start dominating with more acquisitions. I’m a big fan.

      Oh REITs…why did I max out my IRA so early??? (sniff sniff) I’m so close to selling John Deere (DE) or Procter & Gamble (PG) in that account and loading up on more REITs and Canadian banks. My PG holding has a very high cost basis and I’m just not sure what I want to do with it. Great job picking at oil too, I’ve been hesitant this year but I could be missing out on the most obvious valuations the market is providing. Sending good investing vibes your way and thanks for the comment!

       
      Reply
  12. Dividend Gremlin

    Ryan,

    3 of those look awesome to me, the other 2 are pretty good as well. I would personally want XOM the most followed by ETN in my taxable account and VTR in my Roth. Are you thinking July will be a big month?

    – Gremlin

     
    Reply
    1. My Dividend Growth

      Howdy, Gremlin. Hope all is going well for you my friend. ETN is one of my top picks, I’ve been a fan for a long time. My only question is about their amazing CEO’s departure, but it appears they’re still in good hands. They’ve made some amazing acquisitions over the last several years that should really drive growth from here, personally I like its capital and dividend growth potential more than EMR. I think XOM is my last choice among the list, but even with oil prices it’s probably the safest choice. I’m just greedy! I expect July to stay pretty average on the contribution front, but it’s possible I’ll throw down much more if we see the dgi stalwarts take a bigger dive. Great to hear from you and I look forward to your next purchase!

       
      Reply
    1. My Dividend Growth

      Glad to hear you have similar taste here, Tawcan. Man, everyone else is leaning heavily toward XOM too, and it’s really good for me to hear contrasting thoughts from my own. I should probably just bite the bullet and start a position. Worst case scenario I’d get to average down and collect even more growing dividends. Not a bad trade off. Thanks for sharing your thoughts my friend!

       
      Reply
  13. DivGuy

    Hey Ryan!

    Can you give me a short explanation of why GLD interests you so much? I don’t much about it and I can’t say the numbers you showed up impressed me so much. There must be something I don’t see! 😉

    Cheers,

    Mike

     
    Reply
    1. My Dividend Growth

      Hey there Mike, hope all is well. GILD doesn’t have much of a dividend history, but I like the fast growth and current undervaluation. This is more of a pure capital growth play in a complex industry, so I completely understand any hesitation. I’ll recommend a few articles to give you a better picture of the business: Dividend Mantra: http://www.dividendmantra.com/2015/06/recent-buy-74/ – Chuck Carnevale – http://seekingalpha.com/article/2428205-why-gilead-is-the-most-exciting-growth-opportunity-in-2014 – Bret Jensen: http://seekingalpha.com/article/3280915-gilead-still-my-next-apple

      I’d be curious to hear your thoughts if you dig in. Take it easy my friend!

       
      Reply
  14. Pingback: Dividend Reads for the Weekend

    1. My Dividend Growth

      Nice work, dzogen. Those are some solid picks and I especially like the current valuations of all three. Appreciate you checking in and I hope you’ll stop back to let me know how the investments are going 🙂

       
      Reply

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