The numbers have been crunched like fall leaves underfoot. Spreadsheet, database and calculator put to the task: November’s top stocks are in!

The Best of the Best

In the upper strata of dividend investing, there exist only a small selection of stocks that meet the strict criteria of the Dividend System™.  I guess that expecting companies to share their profits with their investors certainly does separate the wheat from the chaff.  

This month, there are 648 stocks that have paid increasing dividends for five years and up. Of those, only 151 dividend paying stocks made the cut to be included in our portfolios and recommendations for further consideration.

November’s Best

Each month we sift through the universe of dividend stocks to find the top stock in each sector. Our system incorporates factors for safety, stability, predictability, and growth, selecting stocks that have potential for a total return that trumps the market’s.  Here are November’s selections:

  • Basic Materials: Linde PLC (LIN) Score: 19.5
  • Communication Services: Activision Blizzard Inc (ATVI) Score: 28.5
  • Consumer Cyclical: Ross Stores Inc (ROST) Score: 50.7
  • Consumer Defensive: Church & Dwight Co Inc (CHD) Score: 21.6
  • Energy: Marathon Petroleum Corp (MPC) Score: 31.2
  • Financial Services: Visa Inc (V) Score: 49
  • Healthcare: UnitedHealth Group Inc (UNH) Score: 46.5
  • Industrials: Canadian National Railway Co (CNI) Score: 28.9
  • Real Estate: CubeSmart (CUBE) Score: 34.1
  • Technology: Accenture PLC (ACN) Score: 24.1
  • Utilities: UGI Corp (UGI) Score: 7.4

And in order of preferred recommendation for further consideration below:

  1. Consumer Cyclical: Ross Stores Inc (ROST) Score: 50.7

  2. Financial Services: Visa Inc (V) Score: 49

  3. Healthcare: UnitedHealth Group Inc (UNH) Score: 46.5

  4. Real Estate: CubeSmart (CUBE) Score: 34.1

  5. Energy: Marathon Petroleum Corp (MPC) Score: 31.2

  6. Industrials: Canadian National Railway Co (CNI) Score: 28.9

  7. Communication Services: Activision Blizzard Inc (ATVI) Score: 28.5

  8. Technology: Accenture PLC (ACN) Score: 24.1

  9. Consumer Defensive: Church & Dwight Co Inc (CHD) Score: 21.6

  10. Basic Materials: Linde PLC (LIN) Score: 19.5

  11. Utilities: UGI Corp (UGI) Score: 7.4

The score after each stock is their Dividend System™ 5 year score, our gauge of a stock’s potential to create market-beating returns. A higher score is better, but the typical range depends on each sector. Here are the average scores for all of this month’s qualified stocks, by sector:

  • 40.8 Basic Materials
  • 31.3 Consumer Cyclical
  • 31.2 Energy (only one stock)
  • 28.5 Communication (only one stock)
  • 24.3 Real Estate
  • 23.4 Industrials
  • 22.8 Technology
  • 20.2 Healthcare
  • 19.7 Utilities
  • 19.4 Financials
  • 16.8 Consumer Defensive

These lists are a starting point for further research on each of the companies selected.

Beyond the mathematical and technical safety factors built-in to our system, there other subjective issues that must be studied before commiting hard-earned cash to a company’s stock:

  1. Does the company’s management have integrity?
  2. Does the company have a “moat” that gives them a competitive advantage?
  3. Is revenue growing or shrinking?
  4. Is the company’s industry contracting or expanding?
  5. Could a technological innovation make the company disappear?
  6. Does management have a shareholder- and dividend-friendly history?

  7. Are institutions selling or buying shares? What about insiders?

The list could go on and on. Ultimately you’ll develop a list of questions whose answers will make you comfortable (or save you from) making the plunge!

Happy November!