March 2025 Dividend Stock Watch List

As I'm writing this blog post on February 15th, the high temperature is set to reach 23 degrees Fahrenheit here in Central Wisconsin. For this time of year, that's not too shabby.

Now that the month of February is just a couple of weeks away from ending, I'm going to take a moment to go over the dividend stocks at the top of my watch list for March 2025. Without further ado, let's jump into it!

Stock #1: Alphabet (GOOGL)

First up on my watch list for March 2025 is Alphabet. In the three months or so, I have added to GOOGL on four separate occasions. Interested readers can check out my investment thesis on GOOGL in my January 2025 Dividend Stock Watch List blog post.

GOOGL continues to have a clear path to annual earnings growth in the teens. The company's balance sheet is immaculate and it enjoys an AA+ credit rating from S&P on a stable outlook. The dividend obligation is very low versus free cash flow. That gives plenty of room for GOOGL to hand out big dividend hikes for many years (off a modest 0.4% dividend yield). The current $185 share price (as of February 15th, 2025) works out to a forward P/E ratio of just above 20x, which is well below the historical multiple of 25x.

Stock #2: Realty Income (O)

The next stock on my watch list in none other than Realty Income. Having added to my stake three times in as many months, the Dividend Aristocrat and unofficial Dividend King has been another stock I've been busy buying up lately. Curious readers can peruse my investment thesis on O in my August 2024 Dividend Growth Stock Watch List blog post.

Seven months later, my reasons for wanting to buy more O are basically the same. The company can realistically keep generating mid-single-digit annual AFFO per share growth. O is also one of few REITs that boasts an A-rated balance sheet. The nearly 6% dividend yield remains well-covered by AFFO. The icing on the cake is that O's shares are trading at a forward P/AFFO ratio of less than 13x from the current $54 share price (as of February 15th, 2025). That's considerably lower than the historical multiple of approximately 18x.

Stock #3: UnitedHealth Group (UNH)

Last but not least on my watch list is UnitedHealth Group. This is a stock that I haven't added to since April 2024.

Overall, I still think UNH has double-digit annual earnings growth potential. The company also sports an A+ credit rating from S&P on a stable outlook. The dividend is easily covered by earnings and free cash flow, which should provide a lengthy runway for continued double-digit annual dividend growth. UNH is trading at a forward P/E ratio of slightly above 17x from the current $523 share price (as of February 15th, 2025), which is under its historical multiple of 20x.

Concluding Thoughts:

That's it for now. I believe GOOGL and UNH do a great job of mixing value with moderate to superb growth prospects. O's growth is lesser but it could provide solid upside over the next few years via significant valuation multiple expansion. Overall, I plan on allocating just over 60% of my capital to GOOGL and UNH and the remaining ~40% of my capital to O. This would provide immediate income approaching a 3% yield, with robust earnings growth potential, A-rated balance sheets, and all at double-digit discounts to my fair value estimates.

Discussion:

Are any of GOOGL, O, or UNH on your watch list for next month?

If not, what are you watching for March 2025?

Thanks for reading and please feel free to comment below!