As I’m writing this blog post, it is Friday, October 11th. The high temperature is expected reach 74 degrees Fahrenheit in Central Wisconsin. Add in a partly sunny forecast and the weather is perfect for this time of the year.
Now that less
than three weeks remain in the month, I’ll be looking ahead to dividend stocks
on my watch list for November 2024. Let’s dive into it!
Dividend
Stock #1: Energy Transfer (ET)
The first
stock on my watch list for November 2024 is Energy Transfer (ET). Those interested
in the investment thesis in detail can refer to my August Seeking Alpha article.
In a
nutshell, ET set several new partnership records in its second quarter. The
partnership’s credit rating was upgraded to Baa2 (BBB equivalent) by Moody’s in June. The 7.8%
distribution yield is also well-covered by DCF. Finally, ET’s $16 unit price
(as of October 11th, 2024) remains well under my fair value estimate
of approximately $19 a unit.
Dividend
Stock #2: Alphabet (GOOGL)
The next
stock on my watch list for next month is Alphabet (GOOGL). Astute readers will
notice that I just highlighted the stock in my September 2024 Dividend Stock Watch
List.
Well, my
buying rationale is about the same as it was at that time. Since that time, I
published a September
Seeking Alpha article. YouTube Shorts monetization is improving, and Google
Cloud remains a go-to option for both startups and established businesses. GOOGL’s
nearly $100 billion net cash position and AA+ credit rating from S&P on a
stable outlook are also pluses. The recently initiated dividend is modest and
has tons of room for future growth. The icing on the cake is that GOOGL is deeply
undervalued from the current $165 share price (as of October 11th,
2024), with my October fair value estimate approaching $210 a share.
Dividend
Stock #3: PepsiCo (PEP)
The third stock
on my watch list for November 2024 is PepsiCo (PEP). My investment thesis for
the consumer staple remains unchanged from my May
Seeking Alpha article.
PEP operates
as a leader in a fragmented, trillion-plus dollar global beverage and convenient
food category. The company also enjoys an A+ credit rating from S&P on a
stable outlook. Fair value is also edging closer to $200 a share, which would
represent a moderate discount versus the current $174 share price (as of
October 11th, 2024).
Concluding
Thoughts:
So, that
is that for this blog post in my monthly stock watch list series. Three more world-class
stocks on my radar for additional investment. These are the kinds of investment
holdings that allow me to sleep well at night and stand by the dividend growth
investing strategy. This has served me well over the past seven years and I especially
look forward to the next seven years of living by the strategy.
Discussion:
Are any of
ET, GOOGL, and/or PEP on your watch list for November 2024?
If not, what
stocks are on your radar for next month?
Thanks for
reading. I look forward to your comments below!
I have been setting aside some cash as a lot of the highest quality stocks are overvalued or fully valued. I have a fairly big position in google, but this looks like a good time to add.
ReplyDeleteI added to my position in Elevance Health. They have come under pressure due to some medicaid related challenges, but their long term growth of 11+ percent appears intact. I have also started a position in Ali Couche Tard (ATD). This company is the owner of CircleK, which is the largest convience store chain in Canada, and top 3 in the US. They have historically grew earnings at an astounding 14+ percent rate. I think growth could slow in the year ahead as they invest in some growth initiatives, including their bid for the 7-11 owner, which has caused some downward pressure on the stock. This brings it down close to it's historical fair value, and I would look to add more shares on any further weakness.
Mike,
DeleteYeah. Quality rarely comes cheap and that's especially true these days. Congrats on your recent add to ELV and thanks for the comment!