Watchlist January 2016

Happy New Year! I hope you had a great time over the holidays with family and friends. The holidays are always a good time to catch up with those closest to us, and to reflect on the past year. 2015 was a big year for me and I look forward to seeing what 2016 will bring. I’ll provide an update on how I fared with my 2015 goals and will flesh out the 2016 goals in more detail in a separate post.

There will be a lot to look forward to in 2016! I plan on travelling, moving home from overseas, buying a house, building up my savings, starting a business, and working on language skills more regularly. It should be a very busy year to come!

What better way to start of the year than with a fresh watchlist for the next addition to the Niche Fund? This month I will focus on the health care sector. I plan on this being one of the top sectors in my DGI portfolio as I continue to add new holdings based on my foundation watchlist.

Looking back at the last three months of 2015, there was a decent rebound in North American markets following the rollercoaster rides in August and September. Here is how these major markets fared Oct 1-Dec 31, 2015: (DJIA 7.5%, S&P 500 6.7%, NASDAQ 8.8% and the S&P/TSX -2.1%). This represented a rebound from some rather steep sell offs in August and September. The 2015 full year figures painted a different story though: (DJIA -3.3%, S&P 500 -1.9%, NASDAQ 4.2% and the S&P/TSX -10.8%). While many index investors would rather forget this kind of year, dividend growth investors who regularly added to their portfolios had the opportunity to add quality equities at attractive prices and generate additional passive income.

This is my shortlist of equities for consideration this month:

JNJ – Johnson & Johnson
NVS – Novartis

I will screen these contenders against several other health care equities to find the best value, dividend and EPS growth, and forward passive income combination.

Johnson & Johnson (JNJ) has more than 250 companies located in 60 countries around the world and is organized into several business segments comprised of franchises and therapeutic categories. The three major segments include consumer healthcare, medical devices, and pharmaceuticals.

Ticker JNJ
Stock Price $100.98
EPS $5.23
Dividend $0.75 $3.00
P/E 19.30
Dividend Yield 2.97%
Payout Ratio 55.6%
Div Growth Rate 2.5% 2014/TTM

Novartis AG ADR (NVS) develops, manufactures, and markets healthcare products. It operates through the following segments: Pharmaceuticals, Alcon, Sandoz, Vaccines & Diagnostics, and Consumer Health.

Ticker NVS
Stock Price $85.60
EPS $2.98
Dividend $2.67 $2.67
P/E 28.7
Dividend Yield 3.11%
Payout Ratio 76.3%
Div Growth Rate 3.69% 2013/2014

Do you have either of these dividend stocks in your portfolios? Do you have any views on any other options to look into?

Disclosure: no current holdings in JNJ or NVS.

 

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