October 2019 Stock Watch

October 2019 Stock Watch

Last Years Pumpkins

October 2019 Stock Watch

Another day, another dollar. It’s time to put those dollars to work.

The market is starting to look pretty red, while that’s horrible if your in your draw down phase for people accumulating stocks this is great.

Will the market keep falling? Maybe. Will it rebound? Eventually. My portfolio has changed quite a bit over the last couple years and I definitely can sleep pretty well at night, without thinking about my portfolio. It has slowly evolved into a portfolio full of blue chip stocks that should be around for quite a while. (There’s still a couple positions I could cut though)

Ultimately I just try to stay the course by buying every month and not trying to time the market, it’s worked out pretty well so far.

Now let’s look at where I may possibly deploy this month’s capital.

Canadian Stocks

Brookfield Property Partners – BPY.UN

This is an existing position of mine that has done pretty well, but recently has pulled back. The company owns some of the best real estate in the world, but the market continues to have mixed feeling’s about their acquisition of GGP. I don’t feel that malls are dead. Maybe I’m old school but I still enjoy going to the mall to go shopping especially around Christmas time. Bpy is also planning on adding residential units on top of select malls which will also be a huge improvement to their income and mall traffic.

For us Canadian’s I think Brookfield Property Partners offers us some of the best diversification in real estate out there and they currently seem cheap.

At around 25 a share they seem pretty undervalued and BPY understands that, as they were trying to buy up shares left right and centre earlier this year at a higher price than today.

My real estate allocation will also be taking a hit after Dream Global Reit gets acquired in December, so it’s nice to add to a lagging sector.

  • P/E – 13.6
  • 52 Week High 28.49 – Current Price – 25.17 – $3.32 off 52 week high
  • Div Yield – 6.96
  • Div Streak – 6 years
  • 5 yr Div Growth Rate – 20.3
  • Moat – narrow
Telus – T

One of my favourite stocks in the portfolio, although the price hasn’t increased much. The wife loves Telus too, as she uses them for her cellphone provider. The recent acquisition of adt is a great one in my books. This further diversify’s them, adds to future growth and keeps them competitive against rivals who also acquired security companies to bundle their products.

The communication sector continues to be one of my most under funded sector’s and could use a cash infusion. Although once the government matches our last resp contribution, it will be put to bell (bce) to allow that position to drip.

  • P/E – 16.2
  • 52 Week High 51.22 – Current Price – 47.59 – $3.63 off 52 week high
  • Div Yield – 4.76
  • Div Streak – 15 years
  • 5 yr Div Growth Rate – 9.1
  • Moat – narrow




US Stocks

I continue to shop south of the border to better diversify our portfolio. While its not optimal at current dollar values, sector as well as global diversification is key.

Disney – Dis

The stock that is on my watch list every month. I had it in my head this would be my go to this month but the market is creating some great opportunity’s. Disney plus will be coming out next month. I’m excited for it. They should do very well but its going to cost a lot and I wonder if the stock price will skyrocket or go sideways.. Do I just kick the can down the road and eventually buy it, or stick to the plan and buy another tranche.

  • P/E – 16.6
  • 52 Week High 147.15 – Current Price – 128.95 – $18.20 off 52 week high
  • Div Yield – 1.36
  • Div Streak – 2 years (switched to bi annual payments)
  • 5 yr Div Growth Rate – 21
  • Moat – Wide
Caterpillar – CAT

This is a stock I have wanted to add to the portfolio for awhile. In my line of work I see these machines all the time and cat is definitely the favourite out there. They have a very low payout ratio and are targeting high single digit dividend growth moving forward. Bonus they pay their dividend in my lowest payouts months. (While this isn’t a massive factor it’s nice)

  • P/E – 11.7x
  • 52 Week High 159.37 – Current Price – 118.92 – $40.45 off 52 week high
  • Div Yield – 3.43
  • Div Streak – 25 years
  • 5 yr Div Growth Rate – 11.5%
  • Moat – Wide
Johnson and Johnson – JNJ

The watch list is pretty repetitive. JNJ is constantly on the list and after they recent 8 billion dollar deliberation (which they are fighting) the stock has pulled back once again. They are currently fighting sooo many lawsuits, its actually a little shocking. Their lawyers are good though, I think JNJ will be around for a long time still.

  • P/E – 21.9x but I think the forward p/e is like 15 x
  • 52 Week High 148.99 – Current Price – 129.22 – $19.77 off 52 week high
  • Div Yield – 2.96%
  • Div Streak – 56 years
  • 5 yr Div Growth Rate – 6.40
  • Moat – Wide
3m – MMM

3m yet again… Is this a falling knife? The price keeps dropping and yet I keep trying to throw money at it. While they have some litigation issues as well, I think that’s got to be priced in at these levels. We are almost under 150 a share for this king! Sure earnings these days ain’t stellar, the trade war is real. I wonder how long this will go on or if this is a ploy to spark the market once China and the US come to an agreement. I’d love to add more under 150 bucks, heck 144 a share is a 4% starting yield.

  • P/e ratio – 18.3x
  • 52 Week High 219.75 – Current Price – 150.99 – $68.76 off 52 week high
  • Dividend Yield – 3.82%
  • Dividend Growth Streak – 60 Years
  • 5 year Dividend Growth Rate – 14.8%
  • Moat – wide
Conclusion

Well that concludes my October 2019 Watch List. There seems to be more options out there for our money. Seems a lot of people are starting to hoard some cash and expecting a big crash. Who knows what will happen short term. Long term, I have confidence in these stocks and would like to start or grow our positions in them all.

One concern I have with 3m in particular is tax loss selling. With the end of the year approaching there could be more room to fall as people sell their losers of 2019.

What are your thoughts? Where are you putting your money to work? stocks or savings? Any stocks you have been buying?

Have a great day

cheers and Go Leafs!



8 Responses

  1. PCI –

    Love your list. DIS has been strong on ours and damn, hard to pull with the sub 1.40% yield… agh… love the entirety of your list though!

    -Lanny

  2. Cris says:

    All companies are good to have in your portfolio. Based on what will happen with the entire market, each of them will act differently:
    T – I just initiated a position of 50 shares at 47 but, I sold some BCE at 65. For diversification in same sector and I think Telus is a better entry from valuation perspective
    BPY.UN – if there will be another correction or recession I think will be the most volatile. I will wait for a 22-23 entry.
    DIS – There is a gap at 120 which might be reach. Is fair priced at this level ~130 but a 120 will be a better entry.
    CAT – it is in a downtrend. I will wait for under 100 special that the economy/industrial are slowing down everywhere.
    MMM – I will say that is the best entry. Is in a downtrend and possible to reach 135 (big support area) but still I consider it undervalued.
    JNJ – it is overvalued in my opinion. I will wait for a better entry level.

    I will recommend you to look into FedEx, CVS and Nutrien

    Cris

    • Rob says:

      hey Cris

      Great breakdown. Fedex has too much working against it at the moment, with amazon and now ups drone delivery. Crazy stuff, but they should be fine long term.Cvs is one id like to either see some more div growth or lower their debt levels after aetna acquisition.

      Nutrien is a big one i want back in my portfolio though. I agree with your breakdowns although jnj at a forward p/e of 15x seems good to me. Nice buy with telus. With bells current price I dont know if I will be adding to them at these levels. Id love to, to get that drip going but agree t is the better value.

      Everyone talks about this gap with disney, lets see if it plays out. This is one id love to get to 5% of my portfolio.

      As always appreciate your comments Cris. Thanks!
      cheers

    • German says:

      Hm… I would add Telus since you’re uder exposed in that sector. Canadians are getting hooked by new gadgets and telcos keep on raising the ARPU (average revenue per user)

  3. Terry Falk says:

    I’m new to this post and new to investing as well. I have several companies, but very few stocks held right now. How long have you been investing, and how long did it take you to grow this portfolio to what it is today? Very impressive for sure…..!! I have a few blue-chip stocks that you hold as well, but I am holding them in compushare to avoid fees, but will be soon bringing them over to Direct Investing RBC. How old are you and when do you plan to retire and live off your dividends?

    Thanks, Terry

    • Rob says:

      hey Terry

      Welcome to the site and the investing world in general. I have been investing for just under 3 years now and just make it a priority to invest 1-1.5k a month. When I started I did pull some money out of our mortgage to get us started and invest in our solar panels as well as the private investment, that got the ball moving quicker.

      Im currently 36 years old. I don’t have a set date as I enjoy working. When I get a lot of time off work (winters) I tend to get a little depressed. I dunno if I would ever want to be fully retired. My goal is to be more financially independent so I can take off work whenever I would like and the freedom to do whatever I want.

      Hopefully by continuing my journey in dividend growth investing and other passive income sources, I won’t have to worry about money in the future!
      All the best Terry, thanks for the comment. I always appreciate the input from others.
      cheers

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