March 2015 – Dividend Stocks Watch List
Welcome to the March 2015 edition of the TV Dividend Stocks Watch List. Which stocks made it into our third watch list of the year? You may remember that last month, we lost several stocks from January to February. What will March bring us, other than milder temperatures and lovely brighter evenings?
Well, hopefully it will bring opportunities to buy more dividend growth stocks – they are one of our strategies for wealth through passive income. We’ve only recently started investing more seriously, after both completing several years as students. In the intervening years following job loss, we mostly used p2p lending as a strategy to earn money. Now, we’re returning to the stockmarket as a way of diversifying our income streams, because we believe that certain stocks and markets are cheap right now.
Dividend Value Stocks Screening Criteria
Here is a quick reminder about our initial screening methods. The criteria we mentioned in our first watch list help to eradicate what we would consider to be the less safe and less good value stocks. However, the results of our screener must be further investigated, to make sure that the companies are worthwhile investing in. Moreover, you need to check your data on a variety of websites, as sometimes the data is incorrect, as Dividend Drive recently pointed out to us is the case with the FTSE 100 services company – Babcock. Yahoo Finance or Google Finance may differ from iii.co.uk, which may differ from Investegate, which may differ from Digital Look. You are on your own, we are not financial advisors or IFAs, none of this is a recommendation to invest. Remember, this site is just for informational, educational, and entertainment purposes only. Always do your own research and consult a certified professional for proper advice.
So, without further ado, onto this month’s list.
FTSE 100 Value and Dividend Stocks
As you can see, it’s slim pickings this month. In our February watch list, we had 12 comapnies, we are now down to a measly 7 stocks to choose from. Out are Aggreko, Diageo, Capita, Intertek, and Pearson.
| Epic | Name | Sector | Yield | Dividend Cover | P/E |
| ADN | Aberdeen Asset Mgmt | Financial General | 3.92% | 1.80 | 14.2 |
| BA. | BAE Systems | Aerospace | 3.82% | 1.90 | 12.7 |
| MRW | Morrison Supermarket | Retailers | 6.40% | 1.90 | 8.2 |
| PRU | Prudential | Insurance | 2.10% | 2.70 | 18.4 |
| SBRY | Sainsbury (J) | Retailers | 6.25% | 1.90 | 8.4 |
| SKY | Sky | Media | 3.24% | 1.90 | 16.1 |
| VOD | Vodafone | Telecomms | 5.03% | 1.60 | 12.6 |
FTSE 350 Value and Dividend Stocks
This is where the story gets more interesting. We have gained 1 company from February to March – but some of the constituents in the rest of the list also changed slightly. Aveva, DCC, and Fisher James are out. Dunelm, Informa, Jardine Lloyd, and Victrex are in.
| Epic | Name | Sector | Yield | Dividend Cover | P/E |
| AMEC | AMEC | Oil and Gas | 4.75% | 2.10 | 13.9 |
| ATK | Atkins | Support Services | 2.58% | 2.60 | 15.0 |
| BEZ | Beazley | Insurance | 3.31% | 4.60 | 8.4 |
| CCC | Computacenter | Tech/Software | 2.48% | 2.50 | 16.8 |
| COB | Cobham | Aerospace | 3.32% | 1.70 | 14.9 |
| CWK | Cranswick | Food/Beverages | 2.34% | 2.60 | 16.5 |
| DNLM | Dunelm | Retailers | 2.33% | 2.20 | 20.0 |
| HSX | Hiscox | Insurance | 2.80% | 3.00 | 12.1 |
| IMI | IMI | Indust. Engineer | 2.83% | 2.10 | 18.3 |
| INF | Informa | Media | 3.43% | 2.10 | 14.0 |
| IRV | Interserve | Support Services | 3.76% | 2.60 | 12.8 |
| JLT | Jardine Lloyd | Insurance | 3.01% | 1.90 | 17.6 |
| MCRO | Micro Focus Int. | Tech/Software | 2.70% | 2.30 | 17.5 |
| MTO | MITIE | Support Services | 3.81% | 2.20 | 12.2 |
| PAG | Paragon | Financial General | 2.15% | 3.50 | 13.1 |
| PAY | PayPoint | Support Services | 4.32% | 1.50 | 15.9 |
| RPC | RPC | Industrial General | 2.79% | 2.70 | 14.0 |
| RPS | RPS | Support Services | 3.43% | 2.60 | 12.2 |
| SGC | Stagecoach Holding | Travel & Leisure | 2.88% | 2.70 | 13.1 |
| SMWH | WH Smith | Retailers | 2.66% | 2.30 | 16.7 |
| SXS | Spectris Ord 5p | Electronics | 2.09% | 2.70 | 16.8 |
| ULE | Ultra Electronic Hdgs | Aerospace | 2.56% | 2.80 | 13.6 |
| VCT | Victrex | Chemicals | 2.42% | 2.10 | 19.6 |
| WG. | Wood | Oil and Gas | 2.74% | 3.10 | 13.5 |
So, the FTSE 350, as usual, provides many more stocks for us to choose from. As you know, we recently bought Beazley and Interserve from this list, and we are hoping to pick up some more bargains towards the end of March. I am looking at increasing our Beazley and Interserve holdings, but I’m not sure what else I would consider right now.
What are your thoughts? Which of these stocks piques your interest? Or do you have an entirely different list, and you’re thinking ‘how on earth is their list so different?!’
Let me know, leave a comment below.
picture credit: bplanet/freedigitalphotos.net
Hello
Novice investor here. I am interested in buying shares but haven t a clue how to go about it, i.e. where etc. I am interesting in starting off with national grid. How often do they pay dividends?
Could you tell me how you work out the rate of return. Are dividend’s taxed at source or paid gross?
Thank you very much
Hi Claire, thanks for visiting and thanks for your questions!
The first thing to think about, is if you’re British you will probably want to invest through an ISA, now called a NISA. When you buy shares through a NISA, you receive the dividends and there is no extra tax to pay on them. Shares already have something called ‘dividend tax credit’ applied to them, which is 10%, and unfortunately, you can’t claim that back. You can contribute up to £15,000 this tax year into your NISA.
There are several companies you can open an account with such as Interactive Investor (who we use) – they offer a regular investing servie where you can buy shares once per month for £1.50 – I think this is the cheapest way to buy shares I have ever found in the UK.
If you want to know the rate of return on a share (dividend yield) you can either look it up on a website such as Investor Ease, or whichever company you choose to open an account with. Or you can work it out yourself:
dividend yield = annual dividend per share/share price
British shares usually pay dividends twice per year. You get about 1/3 of the dividend, and then about 6 months later (or less) you get the other 2/3 of it. There are a very few British companies which pay every 3 months, such as Royal Dutch Shell, and most American companies pay every quarter too.
I hope this answers your questions, please let me know if you need any more help. I am not an IFA or any kind of certified professional, but I am just an average person, a fellow investor.
Best Wishes
Hi M
Thank you very much for your reply, I am very grateful:) I really love your site and you have a knack for explaining things so that they are easily understood.
I followed your link to investorease to the info spec on National Grid, there it quotes a yield of 4.9712, does this mean that if I invest say 10k that I will get an annual return of 4.9712%? Sorry for the basic questions!
THanks
Claire
Hi Claire,
thanks for popping back, and thanks for your kind comments. Essentially, yes your 10k would earn you 4.9712%, as long as National Grid honoured their announced dividend payments. Sometimes, companies cut their dividend as Tesco and Centrica (the gas company) did recently. I think Morrison’s supermarkets are also going to cut their dividend this year too. Sometimes, companies keep it steady (often German companies do this) and sometimes companies raise their dividends. With a share like National Grid, it is not a company that is growing at enormous rates, but it is considered to be a steady and fairly safe company to invest in. Therefore, it is likely that dividends will be held steady or will increase by a very small amount. This is usually the case with large utility companies.
As the price of shares fluctuates on a daily basis, the yield will go up and down accordingly. The yield you get will be based on the price you pay when you buy the shares. Hopefully, National Grid will raise their dividend in line with inflation, or keep it steady so we will get a decent amount of money returned to us.
The other thing to note, is that you can either buy the shares using a lump sum of say 10k, or you can ‘drip-feed’ into the account by buying some shares every month. This averages out the cost of your purchase, so you would basically have paid the average price over the course of a year, instead of buying at just one moment and then seeing the price go up and down through the year. Of course, you can always deposit the money in one go into your account to take advantage of this year’s NISA allowance, but you wouldn’t have to do anything with it until you wanted to.
Thanks again for your questions,
CHEERS
M,
Great list once again!
Quick question though: how do you feel about adding VOD now that they won’t be able rely on the fresh Verizon cash anymore? I didn’t care about it too much when I invested in VOD back in November of last year because I think they telecoms operator now can use its huge pile of cash to make further strategic investments, but it could put some folks off.
Cheers,
NMW
No More Waffles recently posted…Net Worth Update: €58,694 (+4.44%)
Hey man, thanks for stopping by my Belgian friend!
I am totally okay with investing in Vodafone. The only problem is, that I bought last year when it was really cheap, so now if I add to my position I am having to pay over 15% more, which is kind of shocking, BUT it still comes out pretty well in my screener, so it is still a good value share right now. I think the huge cash pile can only be a good thing, right?
BAE have been on my watch list for a while now. Likely to buy soon, probably next month.
weenie recently posted…February 2015 Savings + other updates
Yup. I managed to buy right at the bottom in 2014, although now I’m reticent to add because it looks so much more expensive than what I first paid for it! I should just get over myself though, because it’s still great value
I know the feeling. I prevaricated when it was sitting at about 440p for ages. Since then my mind seems unwilling to accept that it is still a bargain despite the price rise!
Such are the flaws of a human mind!
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
that is always my problem. I am so reluctant to buy quite a few of my stocks now because they’ve gone up so much in the last year or so!
Yes, it is a weakness many of us suffer from. I am increasingly trying to gather data not from chart but from tables (I have set one up in Google Drive) so that I can’t see whether the trend is up or down. I then tend to look before purchasing but hopefully by then I would have overcome the mental block a little.
I don’t know whether it will work or not yet! Too early to tell!
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
hopefully, it will!
Haha, hopefully indeed! I think it has a good chance of working…
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
keep those fingers crossed, or as our friends in Germany would say ‘Daumen druecken’
Nice list. Have you considered Tesco? I confess, i have not looked into the company valuations. As a tourist, I find a lot of Tesco stores in London.
Dividend Dreams recently posted…Buying More General Electric – GE
I sold my Tesco shares quite a while ago. I do still own Sainsbury’s though, their nearest competitor. Tesco have recently cut their dividend following an accounting scandal as well as profit slumps in the light of market share being taken away by the German discount stores – Aldi and Lidl
I’m surprise BP is not part of your watch list, as it’s a British company?
Hi Viviane, thanks for your comment. My criteria for screening stocks include: having a 7 year increasing dividend payment history; having a dividend cover of 1.5+ (preferably 2); paying at least 2%; and raising the dividend by at least 2% every year (amongst other criteria). If a company doesn’t meet this, then they get kicked out of my list. That being said, I do very occasionally invest in companies that don’t meet all of the criteria – e.g. Natinal Grid and Royal Dutch Shell B’s – this is because they a re highly defensive and have some kind of wide moat or other strong reason to invest such as having a huge monopoly.
Cheers
The FTSE 100 looks very sparsely populated indeed for you! Sky I have held for a while.
BAE and the Pru I have been watching for some time. Incredibly robust companies who have managed to survive the various difficulties their industries encounter. However, each time I have nearly initiated a position something else has caught my eye!
The FTSE 250 looks much more diverse. Obviously, Interserve and Beazley (as we have discussed before) look very good. Informa is another highly appealing company. It has changed itself a lot recently and has shown to have a very resilient business. A bit like Pearson, it is shifting the nature of its business quite a bit.
Interesting list in general! Some I will have to look into more!
Thanks for sharing.
Dividend Drive recently posted…How does your Broker’s Foreign Exchange Charge affect your Yield?
Pearson have been pretty great to be honest, always a strong contender for a dividend portfolio. I’ve got Sky, but I want o buy another company, Informa may just be the one. I’ve also been considering PRU, as a backup insurance company. I’m not that keen on insurance companies, but there are a couple of good ones and PRU is obviously so much more than that.
Thanks again for your comments, very much appreciate the discussion!
My pleasure. Same to you!
Yes, I greatly regret not adding Pearson when they were out of favour and very reasonable value. They are still reasonable value. But now the likes of Informa are far more attractive!
The Pru is a remarkably well managed company and a really clear and stable vision for long term growth. It does appeal to me greatly. In general I am less keen on life insurers (preferring specialist insurers and reinsurers) but the Pru is appealing. I hold Old Mutual at the moment and a large amount of other financial companys so I am reticent to add much more to that group!
Dividend Drive recently posted…How does your Broker’s Foreign Exchange Charge affect your Yield?
I’m reticent to add those sectors too, but not because I have much exposure… in fact, it’s the opposite case. I think Pru would be a really great addition, and maybe both Informa AND Pearson? Totally wish I’d bought Pearson like you say, when it was more out of favour
Yes, I just looked at Pearson again today. With the current predicted growth rates it does still look pretty good value.
According to consensus predictions we could see a PEG of about 1.29 and 2 for this year and next. For a £11 billion market cap company that is pretty impressive. What is more, with a yield heading towards 4% again it does look good.
Yes, Pearson and Informa would be pretty solid. Though Bloomsbury is equally (or perhaps even more) tantalising. Really shifting its focus recently capitalising on its profits from Potter et al to move into the more stable academic realm!
Dividend Drive recently posted…How does your Broker’s Foreign Exchange Charge affect your Yield?
I nearly bought Bloomsbury last month! It’s still near the top of my list of potentials
I’m not surprised! Bloomsbury has impressed me a great deal. It seems very much a Pearson in miniature. It has a highly successful fiction and a growing non-fiction business which looks good for the future.
Hopefully I will be tempted to actually buy it at some point. Something is holding me back, but I can’t work out why. All I can think is that it all seems too good to be true.
It has a low P/E, low beta, solid yield around 4% covered over two times by earnings and set to continue growing. It also has not debt at last count and about 13p per share in cash.
Maybe it is time to overcome the weird mental frailty Bloomsbury has shown in me!
Dividend Drive recently posted…How does your Broker’s Foreign Exchange Charge affect your Yield?
I’m not sure why I didn’t buy either… I feel similar to you, almost as if it seems to good to be true? Maybe we should just get over ourselves and buy some!
I think you’re right. Everytime I look at Bloomsbury I go back to their recent reports and have never found anything that even mildly concerns me. In my work, I also come across their publications in greater numbers which is also a good sign.
Time to pull ourselves together!
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
serisouly. i might add it to this month’s purchase list. I only have Sky in terms of media-ish companies. I was gonna add Pearson so many times and then never did, as I kept looking at Bloomsbury instead
I think that is part of the problem. The media sector looks like it has so many top-notch companies at not unreasonable prices.
As with you, I only have Sky in the media sector (although another holding, BT, is practically in that industry now).
Bloomsbury (especially!), Informa and Pearson are my obvious favourites to be brought into my portfolio. But even then, the likes of WPP catch my eye each time I am reviewing them as well!
Craziness!
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
Yeah I think ideally it would be Sky, Informa, Pearson, and Bloomsbury – but not in that order of purchasing preference. I used to own BT but sold several years ago and they’ve never made it back through my screener. Sky have been in there for a while, so I really should buy more. Informa are a totally new addition as of this month, and Pearson we had to sell due to a weird inheritance issue. Our good old Bloomsbury doesn’t make the screener, as it only aplies to FTSE350 stocks
Yes, it is around its 1 year low (esp. after today’s fairly hefty drop). It is also, as far as I can gather from my research, trading at below book value. As we said, just seems too good to be true!
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
you know what I think I’m just gonna add it to my monthly purchase list. I think this conversation we’ve been having has pushed me towards it even more. I have literally had no real, logical reason to exclude it so far, but now that the price is so low, it makes even more sense to get in now while the going is good.
Its almost as if the Telegraph is reading our discussion about Bloomsbury. They (or rather a fund manager) have included it in a list of 10 shares to hold forever.
The size difference between it and the other members of the list is rather amusing!
Read it here: http://bit.ly/1HLEGmC.
The rest are all as you would expect for such a list.
Dividend Drive recently posted…BUY: Hansteen Holdings–Made of the REIT stuff?
yes, it’s so small hahah maybe that’s why many people don’t really know about it? I was just looking at my purchase list for the 23rd, might put bloomsbury on there… oooooooo it’s also pretty much around the 52 week low isn’t it?
Yes, I am going to try and give it another once over this weekend to see if I have missed anything. I have paced through its numbers so many times though!
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i’ve added it to my list, although I might make an alternative investment this month instead.
Yes, I have got to work out whether I have enough funds to push that way and when. I may be distracted (again) by something else. We will see. It is definitely worthy of being top of the list!
Dividend Drive recently posted…5 Cheap US Stock Brokers who accept UK-resident Account Holders
agreed