February saw a strong rally in the indexes with the S&P 500 gaining 4.3% after a dismal January. The markets are currently a bit spooked from the Ukraine situation and energy might be an interesting play over the next few days/weeks. My strategy for the the month of March is to play the waiting game, trying to build up my cash reserves.
My Holdings
Provided the right conditions, I intend to add to my positions in Chevron Corp (CVX, Financial), Johnson & Johnson (JNJ, Financial), Kinder Morgan Inc. (KMI, Financial), Qualcomm (QCOM, Financial) and/or Rogers Communications Inc. (RCI.B.TO).
Chevron (CVX, Financial) is the fourth largest oil and gas company in the world operating in both Upstream and Downstream. CVX is a component of the Dow Jones Industrial Average and is a dividend champion raising its dividends for 26 consecutive years. The five-year DGR is 9% and 10-year DGR is 10.6%. The company has come under some pressure recently and hasn't performed as well, but is a great long-term play. The current levels are definitely attractive to pick some shares up at.
Johnson & Johnson (JNJ, Financial) is a behemoth in the health care and consumer goods sectors. The double play on the two sectors makes this a great pick. JNJ is a dividend champion that has been raising dividends consecutively for 51 years and has five-year DGR of 7.6% and a 10-year DGR of 10.8%. The recent pullback has made the evaluations a bit more interesting and I will be keeping an eye to add to my position.
Medtronic Inc. (MDT) manufactures and sells device-based medical therapies worldwide. Medtronic is a dividend champion that has been raising dividends for 36 years and has a five-year DGR of 11.6% and 10-year DGR of 14.9%. The recent correction in the stock market coupled with a couple of failed trials have made the current valuation very attractive.
Qualcomm (QCOM, Financial) designs, develops, manufactures and markets digital communications products and services base don CDMA, OFDMA and other technologies. QCOM is the leader in ARM-based processors which are found in the bulk of Windows, BlackBerry and Android devices. QCOM has been raising dividends for 11 years and has a five-year DGR of 12.3%. Overall, everyone seems to be bullish about QCOM and the tech sector in general, with some of the lowest short interest across the sector. I am staying a bit reserved about picking up more shares at this moment but will be keeping an eye on it.
Rogers Communications Inc. (RCI.B.TO) is the largest wireless service provider in Canada and is growing its business segments in cable and media aggressively. Rogers has been growing dividends for nine years and has a five-year DGR of 14.7%. After the recent quarter's stumble, the stock is at attractive valuation and I will be looking at adding more to my position.
My Watchlist
I am also considering various stocks that are not currently in my portfolio. I have decided to clear out some old names from my older watchlist and added a bunch of new ones as I need better diversification. I am starting to look more closely at the following sectors: Industrials and Services.
Industrials:
- Deere & Co. (DE) is one of the largest manufacturers of agricultural and construction vehicles and equipment. Deere & Co. also manufactures residential, recreative, commercial and forestry vehicles. Deere & Co. is a dividend challenger who has been raising dividends for 10 years. DE has a five-year DGR of 13.4% and a 10-year DGR of 16.3%.
- Illinois Tool Works (ITW) is a manufacturer of diversified range of industrial products and equipment with operations in 58 countries. The company operates in seven segments: transportation, power systems and electronics, industrial packaging, food equipment, construction products, polymers and fluids, and all other. ITW is a dividend champion that has been raising dividends for 39 years. ITW has a five-year DGR of 9.9% and a 10-year DGR of 12.6%.
- Parker-Hannifin Corp (PH) is a full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components. The company's motion and control technologies and systems are used in the products of its three business segments: industrial, aerospace, and climate and industrial controls. PH is a dividend champion who has been raising dividends for 57 years. PH has a five-year DGR of 16.2% and 10-year DGR of 12.9%.
Services:
- Canadian National Railway (TSX:CNR) engages in transportation of goods including petroleum and chemicals, grain and fertilizers, coal, metals and minerals, forest products, intermodal, and automotive products. The company operates 20,100 route miles of track that spans Canada and mid-America connecting the three coasts of the Atlantic, Pacific and Gulf of Mexico. CNR is a dividend contender that has been raising its dividends for 17 consecutive years and has a five-year DGR of 13.9% and a 10-year DGR of 17.4%.
- Norfolk Southern (NSC) engages in rail transportation of raw materials, intermediate and finished goods operating approximately 20,000 router miles across the southern and eastern US. NSC and other railroads stand to benefit from the oil boom in continental U.S., and before permanent pipelines are put in place, railroads are the only option available to transport the huge supplies. NSC is a dividend contender raising its dividends for 12 consecutive years and has a five-year DGR of 10.8% and 10-year DGR of 21.1%.
Other:
- Aqua America (WTR) is a water utility company based in Pennsylvania but also provides services in seven other states. WTR is a dividend contender having raised dividends for 22 years consecutively. WTR has a five-year DGR of 7.4% and 10-year DGR of 7.9%. Water utilities are a great fit as an essential resource and the company provides very agreeable dividend growth for the sector.
- Procter & Gamble (PG) is a giant in the consumer packaged goods field. PG has five segments: beauty, grooming, health care, fabric care and home care. PG has been raising dividends for 57 years; it has a five-year DGR of 10.2% and a 10-year DGR of 10.8%.
- Index Funds - China ETF, Emerging Markets:Â I am also considering adding a new index fund to my portfolio to track the Chinese market/economy. Everyone is dumping the emerging market equities these days, and I am looking for the right time to jump in. Read about my comparison of available China ETFs here. I am also considering using an emerging market ETF instead of China-specific ETF and need to weigh out the options available.
What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist?
Disclosure: My full list of holdings are available here.
