March 2019 – Watchlist
March 2019 – Watchlist
Hope you all are having a fantastic month. I have been so far. The sun is shining and the snow and ice are melting. Its a great time of the year. Unfortunately the market has also been hot lately. This may be good for some people, but for us I’d rather it be lower since we are in the accumulation phase.
Anyways there are a couple stocks I’d love to buy these days, lets check them out.
Bank of Nova Scotia – BNS
Isn’t this one on most of the lists? I love what the Bank of Nova Scotia is doing but the market doesn’t. They are making some nice acquisitions in some big growth markets. They are one of Canada’s Big 5 Bank’s but they are the most internationally diversified. This is huge for my portfolio as I try to diversify myself even better both with sector’s and geographically. Most of the bank’s reported some “meh” results last quarter and the market’s didn’t get to excited about it. (BMO did report a great quarter though!)
My position in BNS is actually down 3% overall. This doesn’t seem like much, but I thought they were a steal before and here we are with a higher yield (after their last dividend raise) and a lower price. I currently have 51 shares and would need 84 total to enable a drip next month at current prices.
BNS currently has a P/E ratio of 10.9 and a dividend yield of 4.65% and a 50.08% payout ratio (based on trailing 12 months of earnings) Morning star currently has a 3 star rating and a fair value of $72.03, not much upside based on morning star.
All these number’s look great and once those acquisitions are fully integrated BNS shouldn’t be at these levels anymore.
Transcontinental – TCL.A
Transcontinental is a massive printing company making its way into the packaging business. Let’s face it traditional print media is a dying business. I’m sure there will always be some need for it, but their shift toward packaging is what gets me a little excited. With their solid history in the print business, I would think they can pull the transition off. With the rise in e-commerce packaging seems to be the obvious way for them to go.
I started my position with them late last year and after their recent quarterly report the stock has tanked. Management doesn’t seem to concerned as they continued to raise their dividend by 4.8%. This is the 17th year in a row they have raised their dividend.
My original position is down 12% which I believe to be short term noise. Its now trading just above its 52 week low at 17.34 but way off its 52 week high of 32.89. Transcontinental sports a P/E ratio of 8.2 times… pfft and also comes with a hefty 4.91% yield. The payout ratio is %38.95
Morning star currently has a 5 star rating on them and fair value at $23.12 representing a potential 29% increase to fair value from today’s price.
The numbers all look good as well but this is probably a riskier buy as you wait for the transition to come to fruition.
CVS Health Corp – CVS
Well here is a stock that has absolutely been crushed lately. Sure a lot of health care stocks have taken a dive after the change in U.S narrative but come on. CVS got killed. Now the last 2 days the stock has came up quite a bit but it is still trading low!
They took on a lot of debt with the aetna deal. There is no question about that. Was it a good move? I think so. You now have a massive health care pharmacy that will provide health insurance as well. Talk about a good fit, and also a nice shield if amazon were to move into the business.
They have stalled their dividend raises though, to focus on paying down some of that debt load. This sucks in the short term as a dividend growth investor, but the potential especially at this price seems great.
Currently Cvs has a p/e ratio of 15.33 times, a dividend yield of 3.66% and a payout ratio of 36.38%. Morning star has it at a 5 star rating with a fair value of $79.93 suggesting it’s currently %41.29 under fair value.
Abbvie – Abbv
Another health care stock. Abbvie’s price hasn’t really changed at all since all the drug talk in the states like cvs. Basically it has went down all because of Humira. Sales fell as similar products in Europe ate away at their profits. This is still a massive drug, that will continue to funnel money Abbvie’s way. They have a bunch of new drugs in the pipeline some are already showing great results while some big key ones are slated for an fda approval decision in April this year.
Abbvie currently has a higher P/E ratio than the others mentioned at 21.7 times earnings. It does come with a %5.44 dividend that they have not been shy in raising the last couple years. The dividend growth rate will surely slow as humira sales fall overall though. It’s payout ratio is now just north of 60%, while it is getting higher that is still a good number. Morningstar currently gives it a 4 star rating with a fair value of $98.75. If abbvie were to get to fair value that would be a 25% increase not including dividends, yeah not bad……
Well there’s the 4 stock’s I’m really considering adding this month. With the recent news with Boeing, I’ll be keeping an eye on them as well. Especially after both Canada and the U.S grounded flights of their 737 Max 8 planes yesterday. I would really love to get BNS dripping for us, but the other 3 are certainly tempting at these prices. 2 of these positions would add to our monthly dividends next month while the other 2 would start in May.
What are your thoughts? Anything you have been buying or watching this month?
*These are just my thoughts. Always do your own research or consult a financial advisor before making any investment decisions*
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.