Dividend investing is BACK baby!  Talk about undervaluation finally coming out of the wood work!  So pumped up to add to my dividend stock portfolio, as the stock market is down over 600 points in the S&P 500 heading into June 2022.

In addition, dividend increases have been a plenty.  Dividend investors can argue that 2022 has been another fantastic year for dividend investors, despite inflation, a rising interest rate environment with the great resignation happening.

Therefore, as I do every month, here is the Dividend Stock Watch List for June 2022!

Dividend stock watch list

Another dividend stock watch list!  The stock market has been more volatile than ever since the pandemic of 2020.  What does that mean?  New undervalued dividend stocks are coming to light baby!  It’s all about buying dividend income producing stocks – the best source of passive income source on your journey to financial freedom!

The stock market, specifically the S&P 500, is below 4,200, still!  From the all-time highs of 4,800, dropping below 4,000 and holding steady now above 4,100.  What a volatile time period we are in!  Chart is below:

Interest rates are still low on your savings, including high yield savings, accounts, as well as money market accounts & funds.  However, rates are rising, now that the fed has increased the fed funds rate by 75 basis points.  Ally, where I hold a significant amount of cash, is yielding 0.75%, but I am using two accounts to boost my APY, one is SoFi, which offers a 1.25% checking and savings account, as well as Yotta.

I keep MORE savings in my Yotta Savings Account, that has earned consistently over 1.50% APY and earned over 1% in March 2022 and well over 2% in April 2022.  The account is FDIC-insured, of course.  Definitely sign up if you want to have fun and earn more yield on your savings account!

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Related: Sign Up For Yotta Savings

What else has been going on?  I have been investing more and more into Fundrise, as of late – finally crossing over $10,000+ invested there.  See my Q3-2021 review.  In addition, I have been LOVING the SoFi financial app and platform.  In fact, check this article out, as I showcase how SoFi has helped me build wealth this year.  You can earn bonus money for opening an account, as well as free stock!  Definitely check it out.

As a dividend stock investor, it’s been harder and harder to find an undervalued dividend stock.

See – Why I Don’t Time or Predict The Market

In addition, given the uncertainty, I continue to make smaller, weekly investments into Vanguard Exchange Traded Funds (ETFs).  The specific ETF my wife and I have been loading up on is Vanguard High Dividend Yield (VYM).  We are investing approximately $400-$500 per week into Vanguard (pending the VYM stock price), to stay invested in the market, during the uncertain times.  In addition, I am also investing $50 per day into Vanguard S&P 500 ETF (VOO)!

Related: Why I’m Investing $500 Weekly with Vanguard ETFs

Related: Dividend Investing Strategy Added – BUYING $50 per day of VOO

Therefore, on the road to financial freedom, acquiring assets that produce cash flow or income is the goal!  Like I always say, there is always a diamond in the rough.  How do I find an undervalued dividend stock?  Time to introduce our beloved Dividend Diplomat Stock Screener!

Dividend Diplomat Stock Screener

If you don’t know already, we keep the stock screener metrics to THREE SIMPLE items.  They are:

  1. Price to Earnings Ratio – We look for a price to earnings ratio < than the overall Stock Market.
  2. Payout Ratio – We aim for a payout ratio between of less than 60%.
  3. Dividend Growth – We like to see history of dividend growth in a company.

See the video below, for further details and explanation.  If you don’t like to watch videos – see our Dividend Diplomat Stock Screener page!

Time to find the answer to… how did the dividend stocks on my watch list grade on the stock screener?

Dividend stock watch list

Here is the list of dividend stocks that are on my radar going into the month of June 2022.  I typically like to keep it at 3 dividend stocks, keeping the focus locked in.  Finding dividend stocks isn’t easy, but there are also other factors, such as composition of my portfolio by industry (such as – am I overweight/underweight in an industry), as well as exposure to one stock and the concentration there.

There, the dividend stocks on my list cater to those other facets when building a dividend stock portfolio.  This is a fairly defensive, consumer-goods intensive, dividend stock watch list!

Armanino Foods of Distinction (AMNF)

Armanino Foods (AMNF) is back on my dividend stock watch list.  Who would have thought this smaller capitalization company would be back on my dividend stocks to buy radar?  Well, I do already own a ton of their shares.  I’d like to own 1,000 shares in total, which I currently have over 800.  In addition, AMNF weathered the pandemic quite well and came out with a better balance sheet and rejuvenated dividend payout.

First, however, we MUST run Armanino through the Dividend Diplomats Stock Screener, which is focused on these 3 metrics.

  1. Price to Earnings Ratio: Due to AMNF being a smaller cap company, not many analysts follow them.  Now, during Q1-2022, Armanino earned $0.0453 earnings per share.  Therefore, if we annualize that out, they are projected to be at least $0.18 in earnings per share.  This is 28% higher than the same quarter last year, this stock is on the move!
  2. Payout Ratio: The forward dividend income is $0.03 per share, per quarter or $0.12 per share.  The payout ratio is around 67%, a little on the higher side and exceeds our 60% threshold that we do set.  Hmm..
  3. Dividend Growth: Armanino has officially increased their dividend by 9% this year, to $0.03 per share, per quarter.  They typically increase each and every year, except they did take a back step during the pandemic, which they used the capital to pay down any debt, essentially becoming an even leaner company.

The dividend yield is also at 3.50%, well above the S&P 500 and is a better yield on average than most stocks, as well as is a higher yield than my overall dividend stock portfolio.

LyondellBasell (LYB)

It comes without question that LyondellBasell will be on the dividend stock watch list!  They just announced a 5.3% dividend increase AND a $5.20 special dividend that is coming THIS June!  In fact, we also came out with a YouTube video on the news announcement:

I’ve been watching them over the past few years and even buying this stock throughout the last few years.  So much, that I even accumulated over 100 total shares of this now.. dividend growth monster!  Why are they back on the stock watch list?  The dividend stats, of course.

Let’s run them through the Dividend Diplomats Stock Screener and I’ll bring in the statistics from my previous article on why LYB is a dividend growth stock from last week, to save some time.

1.) P/E Ratio: Analysts are expecting $16.65 in earnings for this large chemical company.  Based on LYB stock price of $117.08, the P/E ratio is SO LOW at only 7.03.  WOW.  The S&P 500 p/e ratio is currently 21x earnings.

2.) Dividend Payout Ratio: They didn’t land in the “perfect” payout ratio, BUT they are actually better – as it’s lower than the 40%, versus being higher.  LYB has an extremely safe dividend payout ratio of 28.59%.  Think of it like this – LYB retains 70% of their earnings to develop, invest and research new products and pays out almost 30% of their earnings to shareholders.  If earnings were cut in half, the dividend would still be… SAFE!

3.) Dividend Growth Rate: LYB keeps is consistent.  Though they just announced a MASSIVE special dividend, the dividend growth rate has trended just under 6% over the last 5 years on average.  Solid overall.

Lastly, we’ll take a look at the dividend yield.  As an investor, you want to know how much owning this dividend stock pays you now!  The yield for LY  is 4.07%.  That is higher than the S&P 500 by approximately 250 basis points.  Not too shabby.  This is also higher than most CDs and high yield savings accounts!

Store Capital (STOR)

Store Capital (STOR) is back on the dividend stock watch list.  For those that do not know, Store Capital (STOR) is a single tenant operating real estate company.  Hence, their acronym and ticker is STOR.

Due to rising rates, this REIT is now down quite a bit, now down over 21% through May 27th.  It’s interesting, because revenue is up over 20% for Q1-2022 vs Q1-2021.

We will review their dividend stock metrics.  Keep in mind, we will use the Adjusted Funds From Operations (AFFO) ratio vs. the price to earnings ratio, since this is a REIT and that is the common valuation metric.

  1. Adjusted Funds From Operations (AFFO): The AFFO at Q1 was reported at $0.57.  When you take that over the course of the year, that represents $2.28 per year.  At a stock price of $27.29, the AFFO ratio is 12.  Fairly undervalued right now.
  2. Payout Ratio: Store Capital (STOR) pays a quarterly dividend of $0.385 per share, per quarter or $1.54 per year.  The dividend payout ratio is approximately 67%.  Plenty of room for the REIT to pay and even increase this dividend, since most of the earnings goes to the shareholders.
  3. Dividend Growth: STOR has been increasing dividends for over 6 years at an average dividend growth rate of 5.86%.  Excited to see what STOR does this year.

Thought I own over 200 shares of Store Capital (STOR) and wanted to stop there, it’s hard not to look at them at these prices.

Dividend Stock Watch List Conclusion

Dividend investing is real and is happening!  Here is our latest video covering two recent dividend stocks:

Of course, prior to making any purchase, I definitely will make sure to run them through the Dividend Diplomat Stock Screener once more.

Talk about great, every day dividend growth stocks.  My order, right now, would be the same order as you see above – AMNF, LYB and STOR.  Let’s continue to build assets baby!

Related: 5 Reasons Dividend Income is the Easiest Passive Income Source

As you have noticed, I have trickled many articles on this page.  The goal is to educate new dividend investors out there, or to sharpen the terminology for current dividend investors.  As always, stick to your investment strategy and dividend stocks will be there.  What do you think of these stocks above?  Thank you, good luck and happy investing everyone!

-Lanny



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