Dividend Diplomats

About the Author Dividend Diplomats

We are the Dividend Diplomats. Two guys in their Mid-20’s in a race to gain more time now before we hit 59.5 years of age for the “normal” retirement age. You can see our goals at the linked page. The Dividend Diplomat journey began in a 1997 Toyota Celica that was struggling over the 200,000 mile mark on our way to Clearfield, PA… One individual had over $1.5K in projected dividend income and the other had more money in his pocket than projected dividends in his portfolio, and let’s just say – most people don’t hold that much cash, if you catch my drift. This is when the journey truly began, a nice 3.5 hour conversation from two CPAs in a beater of a car talking about breaking free from the chains of working as a CPA. We both were fired up, eagerly talking investing strategies and that is when the one Diplomat began his preaching on the Dividend Investing topic and how it takes the nonsense out of the ridiculous world of investing and suddenly made it very clear on the strategy to truly build a cash flowing, incoming thriving portfolio. Here is where we will describe who we are in a short brief as well as a longer story from where we have come from and where we are about to go. Thank you for visiting our site, as we update you on or purchases, stock analysis’, goal status, portfolio updates and, of course – our dividend income monthly breakdowns. Let’s all try to learn and push each other to new lengths to fully reach financial independence, here we go!

Johnson & Johnson (JNJ), Procter & Gamble Co (PG), Diageo plc (ADR) (DEO): The 2017 Stocks-to-Watch List

Now that 2016 is coming to an end, I am very excited to ring in the New Year.  Putting back up the Christmas Tree, cleaning out any items that are needing to be thrown away and creating more simpleness in my house had me thinking about the big stocks I’m looking forward to in 2017.  There are many reasons why I am trying to look at things more from a “bigger picture” and refining/tightening/sharpening a focused strategy in 2017, as it relates to investing.  The S&P 500 is up over 10% through Christmas and due diligence is going to be that much more “fun.”

2017 Stocks to Consider: The Intro

I didn’t want this to be specifically about a watch list.  I didn’t want this to be a full-blown stock analysis, either.  My goal here is to simplify my direction and strategy for 2017, very similar to what I had performed to maximize in the most tax-efficient manner in my 3 part series, earlier this year.  I will provide that post, that relates to this one at a further date, but my mind and fingers were burning to type out my favorite companies I am looking forward to buying for 2017.  Instead of constantly preaching about the top 5 dividend stocks for your portfolio or how important the dividend growth rate is; that ends up being all fine and dandy- but what are the stocks that correlate with these areas that will provide a great source of dividend income for your portfolio, further closing the gap on being financially independent?

I am excited for the most basic, easy to understand companies and I want to build either new or add on to the current positions that I already have, and truly place more brick and mortar on the foundation that I have.  We can even call this the second story to my portfolio- really fine-tuning what I want this house to be built upon.  This list will be about companies that are decently priced today and on future earnings- as well as are companies that we all know and use their products; products that are in the hands of most individuals and families.  I want to be able to walk into a house or a business and nod my head, as I point out the companies that are being used to provide product and services to others.

Let’s continue forward and see the stocks I am excited about as we go into the year of 2017:

The Stocks

1.) Johnson & Johnson (NYSE:JNJ) – This one is ALWAYS on the list.  At $115.96; the stock is up 12.89% YTD, but is down from it’s 52 week high of $126.07 (8% decline).  JNJ was on my December dividend stock watch list, is a top 5 foundation dividend stock, and is also on Bert’s 5 “always buy” stocks.  At a forward EPS of $7.14, the price to earnings is still in the sweet spot at $16.24.  This stock is beloved by all dividend investors and I’m almost ready to make the gamble they are in most portfolios.  JNJ represents only 3.46% of a position within my taxable account, therefore, is not that significant; even though I own almost 42 shares.  I wouldn’t mind it if I owned in the mid 80’s to round out the position closer to $10,000.  I could build in a low cost automation strategy at $3.95 per trade to continue to purchase JNJ in smaller increments to reach this goal – somewhere between 5-10 shares on a semi-weekly basis.  At 85 shares, this would produce over $270 in annual income.  I absolutely love the brand, with staple products like Johnson’s Baby, Aveeno, Neutrogena, Band-Aid, Motrin, Tylenol, Benedryl, Listerine, and more.  Strong company and looking forward to owning more in 2017!

2.) Procter & Gamble Co (NYSE:PG) – PG is also on my list for stocks to look out for in 2017.  They only represent 1.26% of my taxable portfolio; but there are reasons it has stayed low.  Their dividend growth has been minimal at best, as well as being in a very “substantial” refinement of who they are as a company – dropping Duracell, new appointed CEO in 2015; this has changed P&G’s landscape a bit.  Their yield is at 3.15%, are up 6.99% YTD, down 6% from their 52 week high and promote a forward P/E ratio of around 21 (not the greatest looking ratio), but their brand portfolio speaks volume.  Similar to JNJ above, they hold brands such as: Gillette, Luvs, Pampers, Gain, Tide, Mr. Clean, Crest, Dawn, Tampax and the list can also keep rolling.  I own only about 21 shares, so a march towards 50 “looks” better in the portfolio for 2017 and would produce almost $134 going forward.  They’ve also increased their dividend for 60 years going strong and that won’t be stopping any time soon.  Did I mention they were also on the Top 5 dividend stocks for your foundation in creating a portfolio?

3.) Consolidated Edison, Inc. (NYSE:ED) – Where it all began! I am sure you remember my battle about FirstEnergy Corp. (NYSE:FE) and buying ED, a long time ago.  Well, Bert ended up purchasing them, so I am very sure he has been happy with that investment.  At $73.63, the forward P/E on $4.14 of forward earnings places them around $17.80- not too shabby.  Further, they are a wonderful top 5 stock, which I current do not have a position in myself.  They are an aristocrat that has increased the wonderful dividend amount for what I project as 41 plus years.  ED is a massive company based in New York and I don’t believe electricity is going anywhere. Additionally, consolidation is more than likely to occur.  I find this industry fascinating for one reason – we all use electricity in our every day lives.  Take your pick of what you need to charge- you plug it into the wall.  Until Solar energy becomes a full-on solution, I believe electric utility companies are here for quite some time.  What better than to buy a stock we all use in our every day lives?  I currently own $0 of this utility aristocrat, as I own National Grid plc (ADR) (NYSE:NGG) and FirstEnergy; however – am willing to purchase ConEd in bunches throughout the year, as well.  The desired share amount would be between 30-35 shares, which should add some wattage to my portfolio.

4.) Diageo plc (ADR) (NYSE:DEO) – This was another stock on the December watch list.  With countries like Ireland, Germany, Russia, US – where the consumption of alcohol per capita is high, who wouldn’t want to own a piece of the action?  Diageo has brands, such as Tanqueray, Captain Morgan, Smirnoff, Ketel One, Ciroc, Johnnie Walker, Crown, Baileys, and Guinness.  DEO’s position in my taxable account is a meager 0.79% and the stock’s price hasn’t done a thing, which I would attribute to the currency fluctuation impact.  The company’s current yield is around 3.35%, but given  that they pay only twice a year, I am not in the most immediate rush to stock pile this company. However, I would love to keep my eyes on DEO to figure out the best plan of action in building up this portion.  Similarly, adding another 10-15 shares would be preferable (currently trading at $103.39).

Stocks for 2017: The Conclusion

The above names/companies are those with products that we reach for every single day.  Whether it is flicking a light switch or brushing our teeth – these companies and their branding are here to last for quite some time.  Most have been around for over 100 years and are rapidly on their way to pushing 200.  If they can persist through every single cycle for that length of time, I am almost certain they can do it for another 100 years- no doubt.  My goal is to build another level on the house of stock that I have- one that will further add substantial passive/portfolio income along while placing new stones on my path to financial freedom.