December Dividend Stocks Watch List

December Dividend Stocks Watch List

December Dividend Stocks Watch List 2015

It’s time for this month’s dividend stocks watch list. It’s unlikely I’ll buy something totally new, as I haven’t had time recently to research new stocks in which I don’t already own shares. If baby TV #2 hasn’t arrived yet, it’s likely that I’ll be doing a top-up of Aberdeen Asset Management or Carillion, since I can use recent market downward trends to average down my purchase price quite nicely, especially on the the former.

As regular readers will know, I have an important set of screening criteria which are applied to the entire stock list from Trevor’s website. These criteria are just to initially weed out any glaring undesirables from the list, however I understand many of you would like to keep some of the booted stocks e.g. tobacco companies or gambling companies, so you can always adjust the criteria to suit yourself. After I’ve got this list generated, I look into much more detail at stocks which seem to be good value. But just remember, there are value traps out there! Moreover, the low PE approach I use can be made a lot more subtle by using something like EBIT/EV, which should give a more nuanced insight into these potentially high value, low cost stocks.

Essentially, this list is a first port of call when looking to make another purchase. It is not a recommendation to buy or sell any of the stocks. You must do your own research and consult a finance professional if required.

This month, I decided to only look for stocks yielding 3% or more per year. If you can safely get 3% interest on money (£3k-£20k) in a bank account like the Santander 123, why bother with the stock market? Obviously, we are looking for dividend growth stocks, but I wouldn’t want to start below what I can already get with low/no hassle. I also looked at stocks which have a dividend cover of 1.2 upwards, instead of the usual 1.5 and preferably 2x  cover. However, I make adjustments to my criteria because large infrastructure companies, investment trusts, and the like do not operate the same as ‘normal’ businesses. So, which stocks did my screening criteria generate this month? This is the initial list, sorted by yield and is of the entire UK stock market (including FTSE Fledgling and AIM stocks):

EPICNameIndexSectorYield
HSPHARGREAVES SERVICAIM-100Support Services10.58
CLLNCarillion plcFTSE-250Support Services5.82
NBINORTHBRIDGE IND SAIM-A/SIndustrial Engineering5.68
CSNChesnara plcFTSE-A/SLife Insurance5.50
VODVodafone Group plcFTSE-100Mobile Telecommunications5.24
NG.National Grid plcFTSE-100Gas, Water & Multiutilities4.79
ITEITE Group plcFTSE-A/SMedia4.63
IRVInterserve plcFTSE-250Support Services4.27
PAYPaypoint plcFTSE-250Support Services4.22
AMLAmlin plcFTSE-250Nonlife Insurance4.13
RPSRPS Group plcFTSE-250Support Services3.97
BMYBloomsbury Publishing plcFTSE-A/SMedia3.91
HCFTHighcroft Investments plcFTSE-FLReal Estate Investment Trusts3.74
CTHCareTech Holdings plcAIM-A/SHealth Care Equipment & Services3.48
IPFInternational Personal Finance plcFTSE-250Financial Services3.44

A few things stand out in this table of results. Firstly, Amlin is on there – but it’s being taken over by a Japanese company. Secondly, there are only two companies from the FTSE100 in this list. The rest of the stocks are from smaller indices – 6 out of the 15 are from the FTSE250 and the rest are pretty small companies, being on FTSE FLedgling and AIM, etc. Now, some people might not worry about investing in small companies, but there are sometimes issues with a lack of trading going on. You may find it difficult to buy the amount of shares you want, or even to sell them if you have to. In my own experience, this has never been a problem on the UK indices, however this is not to say it might not happen to me in future.

What do you think of this list? Anything you’d jump at buying right now? Anything you wouldn’t touch with a bargepole? Let me know, leave a comment below!

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19 Comments

  1. The eur/usd has debilitate a considerable amount, so I took another chance to purchase more EU stocks. Ideally, when the euro bounce back, my stocks (common reserve, my organization don’t permit singular stocks) will be worth more.

  2. Hi TV

    I read your recent post on buying National Grid, Im a novice invester and I would like to make a start by getting some NG. What are they currently paying re dividents? Do they pay monthly? What is the cheapest way to invest, I am looking to put a lump sum down rather than drip feeding every month to maximise the dividend payout? I have been put off by some investing platforms seem expensive unless you are a regular trader?

    Thanks

    Sylvie

    1. Hi Sylvie,

      thanks for your questions. NG.’s yield fluctuates based upon the share price. At the time of writing, they’re paying ca. 4.3% which means that for every £1000 you put down, they’ll pay you £43 across the year. They pay twice per year, with a split of ca. 35:65 – meaning you’ll get 35% of the dividend in January, and 65% in August.

      I think the cheapest way to invest is via a broker that does regular investing e.g. Interactive Investor, AJBell, or Halifax Sharedealing. You can set up your regular investment, then it will buy your shares with a £1.50 cost (+ stamp duty). Once they’ve been purchased, you can just cancel the regular investment until you’ve got money to do another one.

      Hope that helps?

      Cheers

  3. The Euro has weaken quite a bit, so I took another opportunity to buy more EU stocks. Hopefully, when the euro rebounds, my stocks (mutual fund, my company don’t allow individual stocks) will be worth more.

    How do you get the list of these stocks? Just curious if you have a method.

  4. Hi, nice watch list

    Regarding Bloomsbury i see that their stock price hasn’t been going up for the last 10 years.
    Do you actually don’t have a criteria like “total returns” in your watch list to measure , for example , the returns by shares price after X years?

    Thanks in advance

    mati

    1. Hi Mati,

      Thanks for your question. Other than when I first purchase the stock, share price is largely irrelevant. This is because I don’t plan on selling the shares. I want to collect dividends for as long as possible! I only consider selling in limited scenarios e.g. if the fundamentals of a company have changed drastically, or if I have some kind of plan in advance to sell at a certain point (unlikely though).

      ‘Total return’ I’d meaningless unless you sell your shares and realise that return, otherwise you may as well just count the dividends and only look to total return if you sell up.

      Cheers,

      M

      1. thanks,
        yes i understand, i am looking for some stocks (in addition to dividend growth stocks) that i will need to sell in the near mid future : 3-7 years
        I use DGI for the very long term… but my question was directed to an additional sub-portfolio that i am trying to build… (i know that is dangerous because we don;t know what the market will do in the next 3-7 years 🙂 )

        best

  5. There are awesome yields!!

    It seems like we are at the beginning of a recession. Dividend paying stocks will out pace the non-dividend paying stocks.

    Keep at it!

    Happy new Year!

    1. I already own the company, so this is my chance to top up at a great price! The performance problems are down to the problems in China/Asia as ADN has large exposure to the region. I don’t see any other problems with the company, so I’m happy to buy more.

      Thanks for the link, will check it out!

  6. Any thoughts on Centrica (CNA) ? Currently just over £2 after a high of £4 in Sep 13, and even though the dividend was cut this year, the yield must still be fairly high given the low price.

    1. Hey Fad, thanks for stopping by. As far as I can recall, Centrica has never made it past my criteria. It may have just been missing out narrowly in the past, I don’t know, but I’ve never researched it in detail because of this. With the dividend cut, it would’ve been ruled out completely for several years.

      Having said that, I do like utilities to some extent, as they *tend* to have dependable dividends, even if low/no growth. National Grid is an example of this. However, again, Centrica’s dividend cut would put me off… It’s more likely I’d look to the perceived safety of national grid and just buy more shares of that instead.

  7. Ciao M,
    Bloomsbury is an interesting stock, I never considered it before. Right now I have WPP on my radar, but not at these prices, while I share Interserve and Carillion with your list, but despite the interesting evaluation at the moment I am not moving into them.

    Thanks for sharing the list anyhow, it’s a great source of inspiration for me (as well as the whole site/newsletter),

    ciao ciao

    Stal

    1. Buongiorno! Totally agree that WPP is a bit pricey right now, in fact that was one of the reasons I went into Bloomsbury in the first place.

      Glad you like the site, and keep up the good work on your side!

      Ciao

  8. Interesting list as ever, M, many of which I hadn’t heard of before.

    I’m likely to top up Bloomsbury at some point and intend to invest in NG. Soon, soon!

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