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):
|HSP||HARGREAVES SERVIC||AIM-100||Support Services||10.58|
|CLLN||Carillion plc||FTSE-250||Support Services||5.82|
|NBI||NORTHBRIDGE IND S||AIM-A/S||Industrial Engineering||5.68|
|CSN||Chesnara plc||FTSE-A/S||Life Insurance||5.50|
|VOD||Vodafone Group plc||FTSE-100||Mobile Telecommunications||5.24|
|NG.||National Grid plc||FTSE-100||Gas, Water & Multiutilities||4.79|
|ITE||ITE Group plc||FTSE-A/S||Media||4.63|
|IRV||Interserve plc||FTSE-250||Support Services||4.27|
|PAY||Paypoint plc||FTSE-250||Support Services||4.22|
|AML||Amlin plc||FTSE-250||Nonlife Insurance||4.13|
|RPS||RPS Group plc||FTSE-250||Support Services||3.97|
|BMY||Bloomsbury Publishing plc||FTSE-A/S||Media||3.91|
|HCFT||Highcroft Investments plc||FTSE-FL||Real Estate Investment Trusts||3.74|
|CTH||CareTech Holdings plc||AIM-A/S||Health Care Equipment & Services||3.48|
|IPF||International Personal Finance plc||FTSE-250||Financial Services||3.44|
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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image credit: freedigitalphotos.net/bplanet