My Watch List for July 2014

I’m always looking out for good quality securities, and if they are under valued that’s great and if they yield high dividend income, even better! However, emphasis is owning quality blue chip companies to grow passive dividend income.

I’ve been pondering about following companies since some time. As soon as more capital becomes available, I’ll be gnashing my teeth in some of these great companies 😉

1) ExxonMobil Corp. (XOM)

ExxonMobil started its humble beginning in 1859 when Colonel Edwin Drake and Uncle Billy Smith drill the first successful oil well in Titusville, Pennsylvania which led to the oil gold rush. Since then, ExxonMobil has evolved into the world’s largest publicly traded oil and gas company, largest refiner and marketer of petroleum products, and it’s chemical division ranks among the world’s largest.

XOM is trading at P/E ratio of 14.00 with a nice dividend yield of 2.69% and market cap of $442.80B. Its 52 week high was $104.61 and currently trading at $102.73, close to its highest level. ExxonMobil’s dividend payments to the shareholders have grown at an average annual rate of 6.3% over the last 31 years. However, considering long-term growth prospective of XOM in oil & gas arena, I consider it an excellent prospect and found in Warren Buffet’s holding via Berkshire Hathaway Inc. (BRK.A /BRA.B) 🙂

2) Reynolds American Inc. (RAI)

Reynolds Amercian Inc. is the parent company of R.J. Reynolds Tobacco, American Snuff Comp., LLC, Sante Fe Natural Tobacco, Niconovum USA, Inc. and R.J.Reynolds Vapor. RAI was founded in 1875 and is the leading company for cigarettes and tobacco products, next only to Altria, Inc. (MO), after acquisition of Lorilland company (LO) is completed. 

RAI is trading at P/E ratio of 20.30 with a healthy dividend yield of 4.57% and Market Cap of $31.44B. It ran up to $63.39 at its 52 week high and currently trading at $58.65, almost 7.5% lower. With the acquistion of LO, RAI will occupy a dominant position in growing menthol based products and therefore, potential for growing earnings and dividend income.

3) Deere & Company (DE)

Deere & Company manufactures and distributes agricultural, construction and forestry equipment worldwide. The company was founded in 1937 and has headquarter in Moline, Illinois. It has growing dividends for last 11 years and compares favorably with its main competitor: Caterpillar Inc. (CAT).

DE is trading at P/E ratio of 9.60 with a good dividend yield of 2.74% and Market Cap of $31.88B. Its 52 week high was $94.89 and currently trading at $87.73, almost 7.7% lower. Due to growing population and diversified foot print across various geographies, I consider it a long-term prospect and also owned by Oracle of Omaha, Warren Buffet 🙂

DE was one of the recent buy by Dividend Mantra as well.

Full Disclosure: I plan to purchase above securities in near future.

Are you also considering to purchase these securities in near future? 

Thanks for reading.

12 thoughts on “My Watch List for July 2014

  1. PIM,

    Thanks for including my link!

    I don’t think you can go wrong with DE here, but XOM is also always a fine candidate.

    I haven’t taken a good look at RAI in a few years now, but will likely own a piece of the company after the LO merger.

    Hope you’re having a great weekend.

    Best wishes!

    1. Hi Jason,

      Absolutely! Looks like DE is quite a favorite 🙂 With RAI/LO, we would be happy shareholders.

      Thanks for including my post as well.

      Enjoy your rest of weekend.

      Best wishes!

    1. Hi DividendMongrel,

      Great to hear that! Looks like DE is a hot property now 🙂

      RAI is a fantastic company and with LO in its kitty, it’ll have a bigger moat and a safer bet!

      Good weekend!

      Best wishes.

    1. Hi Dear Dividend,

      Thanks for your kind words. Always appreciated support from like-minded.

      I’d have to say both XOM and CVX are keeper, with CVX having a little higher yield of 3.28%. They are hitting their highest levels ever. But, as Warren says: it is good to buy great companies at fair price rather than buy fair companies at great price. This holds true to these companies as well. I want to put skin in the game and slowly add to the positions. I’d be happy either way, if price corrects, buy more and if price rises, happy that I bought at fair price 🙂

      Enjoy your weekend!

      Best wishes.

  2. Thanks for sharing your stock considerations for July. I have to say this is quite a varied list of companies. While I like XOM in the energy space I still m fond of the financial sector with banks and insurance. I have been buying and looking at more AFL, CB, WFC and USB. I just wrote a blog post about Canadian bank stocks that have paid dividends for over 100 years and was surprised to learn about their high yields and dividend friendliness. Still, the above are all solid choices. Maybe look up north too?

    1. Hi Keith,

      Thanks for liking my stocks list and nice words!

      I totally agree with you while Energy, Pharma and Consumer sectors are fantastic to own, but, with improving economy that will start firing on all cylinders at some point, financial sector will take leadership position. I really like those companies: WFC, AFL, CB along with TD, BNS and RY from up North and plan to add some of them into my portfolio in future. You add a great point about Canadian Banks and they are certainly great companies.

      Thanks for stopping by from North! Its always interesting to hear views from diverse geographies.

      Good weekend!

      Best wishes,

  3. Only one I currently don’t have is Reynolds company (I also recently purchased DE… hard to pass up with that low PE in this market).
    But I hate cigarettes… maybe next time someone is puffing smoke, knowing that my dividends are getting fluffed will help 🙂

    1. Hi Kipp,

      Haha! That’s a nice way at looking things with a positive thinking 🙂

      RAI is a solid dividend gusher and with LO, should be in even better shape.

      Thanks for stopping by!

      Best wishes.

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