Watchlist Update and Additions

The Dividend Geek Watchlist has been fully updated based on David Fish’s latest end of March updates to his list of dividend champions, challengers and contenders. Also, all of the latest fair values estimates have been updated.

I did some research and found four new dividend growth stocks to add to the Dividend Geek Watchlist, one REIT, one technology company and two that are part of the utility sector. They are:

National Health Investors (NHI) – This REIT owns a diversified mix of 205 healthcare properties. It has increased its dividend for 15 consecutive years, and has a narrow economic moat rating. I really like its high current dividend yield of 5.20% and long term growth potential to increase its annual dividend payment in the 6%-8% range. Currently its trading around $73 which is 6% overvalued (fair value is $69), I’m thinking of initiating a partial position around $68 and then adding to the position if it drops down to around $65 (3 year support).

Corning Inc. (GLW) – Is engaged in manufacturing of specialty glass (think Gorilla glass for smartphones) and has increased its dividend for 7 consecutive years. Corning has an impressive 5-year average dividend growth rate of 19.1% and with a low EPS payout ratio of only 19% and a projected 5 year future growth rate of 8.9% this dividend contender has a lot of room to continue to raise its dividend payout in the double-digit range for years to come. Corning is currently trading at fair value of $26 per share. I’ll be watching for GLW for pullbacks to $24.50 (3 month support) and $23 (8 month support) for possible entry positions.

NiSource Inc. (NI) – This is a 100% regulated natural gas and electric utility company that serves 4 million customers across seven states. They have a narrow economic moat rating and have increased their dividend payout an average of 12.1% over the past 5 years. NI has traded at or above its fair value for the past 8 years, and is currently trading at $23.78 which is 13% above its $21 fair value rating. I’ll be watching for dips down to the 6 month lows of $21.50 for a partial position.

Aqua America Inc. (WTR) – This is a strong and steady water utility company that has raised its dividend for 25 consecutive years. Its 1, 3, 5, and 10 year dividend growth rates are 7.7%, 8.1%, 7.9%, and 7.6% making a solid and consistent 8% dividend growth history. It is currently trading at $32.50 which is near fair value of $32. The downside is that its current yield is a little low at 2.35%. I would be more interested in opening a partial position at $30 which would be below fair value and bring the initial dividend yield up above 2.5%. There are certainly dividend growth stocks with higher yields and dividend growth rates, but this is a nice low-risk investment that helps diversify a portfolio by adding weight to the utility sector and still get solid dividend growth.

Filed in: Dividend Growth Investing • Uncategorized