But since our other two ATR posts went relatively well, and the two related stock purchases are up 11.41% since we bought them (see chart below), we figure we will try to continue to do a ATR post once a month and maintain these stocks in a separate portfolio just to see how they perform.
So for each ASK THE READER post, we will select four stocks on our watch list that we feel are worth buying. But to add some fun into our buying process, we have decided to put our faith in our fellow bloggers and readers once a month.
Please spend a few minutes to vote for one stock from the four companies listed below. Tell us why you like the stock that you picked.
Thanks in advance for your STOCK PICK!
STOCK #1 (BAX)
- Sector: Health Care - Medical Instruments & Equipment
- Market Cap: 36.8 Billion
- Dividend Yield: 3.0%
- Consecutive years of dividend increase: 6 Years
- Paying Dividends Since: 1934
- Payout Ratio: 60%
- P/E Ratio: 14.8
- Sector: Health Care - Pharmaceuticals & Biotechnology
- Market Cap: 280.4 Billion
- Dividend Yield: 2.8%
- Consecutive years of dividend increase: 52 Years
- Paying Dividends Since: 1944
- Payout Ratio: 46%
- P/E Ratio: 17.6
STOCK #3 (PM)
- Sector: Consumer Products - Tabacco
- Market Cap: 128.4 Billion
- Dividend Yield: 4.8%
- Consecutive years of dividend increase: 6 Years
- Paying Dividends Since: 2008
- Payout Ratio: 82%
- P/E Ratio: 17.45
STOCK #4 (TD)- Sector: Financials - Banking & Savings
- Market Cap: 79.4 Billion
- Dividend Yield: 3.6%
- Consecutive years of dividend increase: 4 Years
- Paying Dividends Since: 1857
- Payout Ratio: 51%
- P/E Ratio: 13.04
**LET US KNOW WHICH STOCK YOU WOULD PICK AND WHY**
Ive been asking this question myself and am considering all the stocks mentioned above. But I think the answer is probably different for each person depending on what is present in his/her portfolio.
ReplyDeleteI decided to initiate a position in TD this month as I thought it was worth the risk considering all of my other positions. But without delving too much into details of your portfolio composition, I would pick either JNJ or BAX. If you are willing to take a bit more risk, BAX could potentially pay off, but if its absolute safety you are looking for, go with JNJ.
My $0.02
R2R
R2R - I agree that the pick would be different for each person. Thanks for the comment. I guess I need to clarify on my next ATR post that I am looking for the stock they think has the best valuation as a long term holding. :)
DeleteFrom your comment, it sounds like you're split between JNJ and BAX so I will consider both as your picks.
AFFJ
AFFJ,
ReplyDeleteIt comes down to Baxter or PM for me, depending on what industry you want. If you want a large company who stiff arms companies out of the way - Phillip Morris, get a high yield and great dividend growth to boot as well - and the payout ratio is high as that is where they target. Consolidation in that industry could also open up new synergies - as Lorillard was bought out by Reynolds, etc..
However - I feel as a dividend investor - Baxter has a lot left in the tank to unlock. What I'll say is you can't go wrong with either, and depends on where you see the allocation fit in your portfolio!
Good luck
-Lanny
Thanks for your picks Lanny. It sounds like you've made a good argument for both and favor both equally, therefore, I'll count both picks when deciding. :) AFFJ
DeleteI have extremely small positions in all but BAX. I would go with TD since you say on your portfolio page that you are seeking companies with long histories of dividend payments. They have been paying dividends almost dating back to the Gold Rush (used since you live in CA). While the dividends did not grow during the GR, many view that as a once in lifetime event (let's hope so).
ReplyDeleteFD - Great to hear that all four are in your portfolio...that is comforting to see others have confidence in these companies. We already on TD in our portfolio but wouldn't mind adding to our shares if the vote comes out that way. A long history of dividend payment is definitely something we consider when making our purchases and TD definitely provides that.
DeleteBTW...nice Gold Rush reference. :) AFFJ
AFFJ
My vote would be for TD. They are becoming very popular in the states. Good size dividend payout and fairly priced at the moment.
ReplyDeleteThanks Mongrel - we actually initiated shares ourselves last month but if the readers picks TD as their favorite, we would have not problem adding to those shares. As with all four mentioned, we agree that TD is fairly priced. AFFJ
DeleteBAX is a good investment but its dividend won't be safe after the spinoff. I would go with JNJ or BAX. I would only buy TD if I had a 401k or roth to avoid foreign taxes
ReplyDeleteThanks for stopping by and for your pick...If I reading the message, I think you are saying to go with JNJ since BAX might be a risk after spinoff and TD would be more for a 401K or Roth. :)
DeleteThanks again for your pick. AFFJ
AFFJ,
ReplyDeleteTough call. All are great companies and I don't see how or why you'd go wrong buying any of them. I'm most confident in JNJ's prospects over the next 10-20 years, which is why it's my largest investment. I think PM might be the best buy on a valuation and risk/reward basis right now, however.
Happy shopping!
Best regards.
Jason - agreed, its a tough call and that one of the reasons why I wanted to do these posts. Well, that and to make it fun at the same time. I've personally learned that adding fun to what you do makes it much more enjoyable...I try to add some fun to almost everything I do. :)
DeleteI think that based on your comments, I will count both JNJ and PM as your votes. Sounds like both are companies you would consider buying. AFFJ
Thanks everyone for your picks!! It's going to a close call as the tally so far is:
ReplyDeleteBAX- 2; JNJ- 3; PM-2; TD-2
I am planning to make the purchase on Tuesday or Wednesday so PLEASE KEEP THE PICKS COMING! Let's see if clear winner can be established.
At current prices, I would rank them in the following order:
ReplyDelete(1) BAX
(2) JNJ
(3) PM
(4) TD
I think when BAX finalizes the spin-off, it will provide greater clarity to those lines of businesses and the future of its dividend payments, so a revaluation is likely. Look at the track record for prior Baxter spinoffs -- now traded as (or as part of) EW, CVS, and CAH -- and I think they know what they're doing when they grow and spin-off businesses. FWIW, I own PM, JNJ, and BAX. I no longer invest in banks, so that's a personal bias that affected my vote.
Thanks Bruce for your rankings and thoughts on BAX. I will add it to the tally. AFFJ
DeleteI would, without much hesitation, go for JNJ - and keep in mind that JNJ is not only my favorite amongst the four candidates you proposed, it is also one of my absolute favorite stock picks in the current market. I personally initiated my position in JNJ about a month ago, much because I believe it to be a value-creating case for the upcoming years (to quote the brilliant W. Buffet: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."), and because it is a true dividend aristocrat (with a stellar 52 years of consecutive increasing dividends).I believe that the price compared to the value is more than fair, and the company has much room to increase its price (as compared to many other wonderful companies whose current valuations are becoming increasingly too expensive in regards to their fair value). And finally, JNJ is a global leader in its market, and considering that the market is consumer products and healthcare (healthcare is an area of bransch in which there is much room for increasing revenues and profit due to the (i) aging population in the western world, coupled with (ii) the now booming emerging markets with increasing purchasing power amongst its consumers, private corporations and public sector).
ReplyDeleteGood luck with your investments! :)
Thanks Alarik. You are right, it certainly is hard to bet against a 52-year streak! We don't currently own JNJ but it is certainly on our bucket buy list! :) Great stock and company as you've clarified so well above. AFFJ
DeleteAFFJ,
ReplyDeleteBAX gets my vote. I am looking forward to their upcoming spinoff and the price drop makes it attractive at this time. There's some risk involve (just as any other stock), JNJ is the safer bet, but with the higher risk on the spinoff the higher the reward!
Goodluck and I wish you well, no matter which one you pick, you sure will harvest it in the future.
FFf
Thanks for your pick....it sounds like BAX does come with risk but even after weighing in on that risk, many would still choose BAX. That speaks volumes when you are in a race with three other quality dividend payers!
DeleteThanks again. AFFJ
I would add TD and JNJ in my case. BAX looks interesting too though.
ReplyDeleteTawcan - sounds like you have split between TD and JNJ so I'll count both in my tally. Thanks for stopping by and providing your pick. AFFJ
DeleteSo after roughly 39 hours, the tally so far is as follows:
ReplyDeleteBAX- 4; JNJ- 5; PM-2; TD-3
I'm going to rely on one more full day of responses...I am planning to make my purchase on Wednesday. PLEASE KEEP THE PICKS COMING!
JNJ would be my pick. It is extremely rare that a company of this quality enters discussions about stocks trading at a value. You won't regret it.
ReplyDeleteThanks for your pick...JNJ is the current leader among the four we are contemplating buying. If capital was endless, I'd love to simply buy all four. But until that day, I must do my best to pick the leader of the pack. We will happily be a JNJ shareholder if that is what comes out on top. :) AFFJ
DeleteI also vote for JNJ and TD. I actually ended up purchasing 150 shares of JNJ this month, so I guess you can say I put my money where my mouth is :)
ReplyDeleteBest wishes! Will look forward to see what you end up buying.
FI Fighter...Great to hear that your vote comes with confidence and your own money! :)
DeleteThanks for stopping by and leaving your pick. AFFJ
Personally, I would vote for TD. The PE and yield are decent and I've read that Canadian banks are more regulated than here in the states. I own all and have a sell order on PM when it hits $86 a share, that'll be above my cost which is why I put in the order at that amount.. I do see PM getting to that point, but believe there's better use for my money. I think there will always be people who smoke and PM won't go away, but I don't think it'll have the growth it once did unless it drops by 20 - 25%. If it did, I'd consider looking at it at that time. This is my 2 cents, looking forward to what you do.
ReplyDeleteTD is a good stock and we would be more than happy to add to our current holding should the votes come out that way. Also, thanks for the feedback on PM. I have mixed emotions about PM myself but thought I'd include it because I know a few bloggers here favor PM.
DeleteThanks for your pick. AFFJ
Go JNJ, Tobacco is not cool anymore :)
ReplyDeleteThanks ANHA. You're the second (in a row) to dislike PM. Is it the potential legalization of marijuana? Is it the e-cig movement? Whatever the reason, the message has been received. It doesn't appear that PM will end up the winner but I'll certainly research tobacco stocks in greater detail beforehand If I decide to invest.
DeleteAFFJ
I vote TD. They pay a great dividend and like I saw mentioned above, they have become very popular in the states.
ReplyDeleteI personally use TD as my brokerage, and can say hands down that they are the best broker I have ever used. Great customer service and amazing software for the retail investor.
Thanks Gen Y...TD is good and we own it. Since we live in US, we do take a little tax hit so that is also factored into my choice to buy TD. It's certainly top 4 for me but I think I am favoring JNJ over the rest. AFFJ
DeleteI would go
ReplyDeleteTD - 1
BAX - 2
JNJ - 3
PM - 4
Thanks for your picks HHWG...all four are winners in my book. Unfortunately, there only enough capital to put one company to work at the moment. :)
DeleteBased on the field winner, I will be picking up JNJ for this months Ask The Reader pickup. Hoping to keep the winning streak alive with these ATR picks! AFFJ
Based on the votes we have tallied thus far, I am planning to pick up JNJ sometime in the next few days. I'm hoping to grab it under $100 so hopefully we can make that happens. In case you are interested, the voted ended as follows:
ReplyDeleteBAX- 4; JNJ- 8; PM-2; TD-6
Thanks everyone for your picks! AFFJ
Well I guess I'm partial to TD as I just picked some up myself. From the list above my other potential pick would be JNJ. It's been a long time since I added to my position and after I'm done increasing my financial sector holdings I'd like to boost my health stocks too.
ReplyDeleteDivHit...Good to hear that JNJ would have been your second pick. We've set a limit order at $100 so hopefully it executes soon. :)
DeleteRegarding TD, we picked up shares last month and we are considering picking up some more this month. I just need to wait and see if there is extra capital at the end of the month. Property and income taxes are due soon so the next two months are somewhat impacted. :( AFFJ
I own all but TD but TD might be making it's way into my portfolio soon. I'm looking at adding another financial and TD looks pretty good. Just speaking from what I've seen there were BAX boxes everywhere in the hospital. And when someone's in the hospital they don't really have the option to price shop.
ReplyDeleteInteresting, we are the exact opposite....of the four stocks, we only own TD. But we hope to bring the other three into our portfolio one day. For different reasons, we like all four stocks mentioned and wish we had the capital to buy all four! AFFJ
Delete