DivGro Pulse: October 2016

Quality Stocks

As I mentioned last time, sometimes it is appropriate to add shares to an existing position even if the stock is trading at fair value or a small premium. This is certainly true for great dividend growth stocks.

Here are the ten highest ranked stocks in DivGro for October. Only one stock earned 7-stars this month. The rest are all 6-star stocks:

T. Rowe Price Group, Inc (TROW)	• discount     7%	• ★★★★★★★
General Dynamics Corporation (GD)	• premium    6%	• ★★★★★★☆
Valero Energy Corporation (VLO)	• discount   19%	• ★★★★★★☆
3M Company (MMM)	• premium  14%	• ★★★★★★☆
Nike Inc (NKE)	• premium    7%	• ★★★★★★☆
Target Corporation (TGT)	• discount   11%	• ★★★★★★☆
AbbVie Inc (ABBV)	• discount   25%	• ★★★★★★☆
Cisco Systems, Inc (CSCO)	• discount    7%	• ★★★★★★☆
Qualcomm Inc (QCOM)	• premium    3%	• ★★★★★★☆
Johnson & Johnso (JNJ)	• premium    6%	• ★★★★★★☆

The premium on MMM shares is too high for my taste. Of the remaining stocks, I’ve invested less than 1% of available capital in GD, NKE, and TGT (as mentioned earlier).

GD is my top performing stock with an annualized total return of 37%. GD is also DivGro’s first home run stock. NKE currently yields 1.24%, way below what I normally require. However, the company’s dividend growth rate is impressive (2), and with a dividend payout ratio below 30%, NKE could afford to continue growing its dividend at a healthy pace.

TROW, CSCO, and QCOM made my list of 10 Dividend Growth Stocks for October 2016. TROW placed second after a stock I don’t (yet!) own. CSCO and QCOM placed ninth and tenth, respectively.