September 2021 Dividend Growth Stock Watchlist

After lockdown, I made a point of trying to spend as much time outdoors and away from the screen as possible. Although, I have to say, sometimes it was liberating not taking a phone or any electronic device with me. However, September is here, which means Summer is officially over. 

The little ones back in school and the shorter days will free up some more time to write and study a little more. When creating watchlists, I Usually take inspiration from the community. This blog has enabled me to interact with investors from all over the world. Some are new Investors, some are experienced, some are retired. They all have exciting stories, and I try to learn as much as I can from everyone to make me a better investor.

Before I continue, A friend of mine, Dave, who runs DAVEFIRE, is hosting a FIRE event where speakers like JL Collins and Kel Galavan will be available to answer your questions. I have attended the last event, and I am looking forward to this one as it keeps getting bigger and bigger.

If this interests you, I would love it if you could join me at the event. By using my link (CLICK HERE)  and using my Code DEREK50,  you will get 50% off.

For total transparency, I am an affiliate of this event, and I will receive a small sum for each signup. However, this is a fantastic event, and anyone who has read the Simple Path to Wealth will undoubtedly want to speak and ask JL Collins some questions.

With that said, here is my watchlist for September 2021!

Dividend Growth Stock 1 – ABBVie  (NYSE -ABBV)

The first company on my September 2021 Dividend Growth Stock Watchlist is ABBVie

• Current Price – $112
• Target Buy Price $100 ish
• Dividend Yield – 4.5%
• Dividend Growth – 49 Years

ABBV  is a company that is best known for its Blockbuster  HUMIRA drug.  Since spinning off from Abbott Laboratories, ABBvie has seen solid growth in Revenue, EPS, and Cash flow. 

If you take these numbers in isolation, ABBV looks like a no-brainer at their current share price. However, if you dig in deeper, you will see some risks with ABBV. 

1. How will they replace the revenue from HUMIRA when the patent expires?
2. Can they manage their vast debt load

I believe both of these questions can be answered by looking at the company’s future growth. The Acquisition of Allergan, which increased the companies debt load, looks to be a shrewd move. The company also has a strong pipeline of products coming through, such as RINVOQ and SKYRIZI.

 

What has caught my attention this month is the sudden drop in share price for ABBV. This is because RINVOQ, a JAK-inhibitor prescription drug, will now be sold with a label cautioning users that such medications raise the risk of heart-related severe events, cancer, blood clots, and even death.

RINVOQ accounts for less than 5% of revenue, so this news doesn’t concern me now. However, I hope that more fear will kick in and the company will drop to near the $100 mark.

Dividend Growth Stock 2 – Blackstone  (NYSE -BX)

The second company on my September 2021 Dividend Growth Stock Watchlist is Blackstone

• Current Price – $129
• Target Buy Price –  Not yet defined
• Dividend Yield – 2.35%
• Dividend Growth – 3 Years

Okay, the heading is slightly misleading here as these are not a typical dividend growth company. While they have a clear policy of paying out 85% of Distributable earnings, this could lead to fluctuations in the final dividend paid. 

After a bit of a nudge from Charles from financial freedom is a journey to read his freshly published review of the company.

I have put them on my watchlist because Charles has a firm belief in investing in high-quality companies. Reading his analysis will leave you with no doubt that he has left no stone unturned. 

The question for me now is if this is a company that suits my own investment goal and style. There was a time where I may have followed companies like this blindly, but I have learned over time that while you can copy someone else’s strategy and buy the same companies, you cannot copy someone else’s conviction. 

I have put this company on my watchlist so I can do my due diligence this month. I will try to do a short write-up when I have completed this right before the 17th, which I usually purchase companies each month. 

Dividend Growth Stock 3 – Lockheed Martin (NYSE -LMT)

The last company on my September 2021 Dividend Growth Stock Watchlist is LMT

• Current Price – $356
• Target Price –  $320
• Dividend Yield – 2.9%
• Dividend Growth – 19 Years

Lockheed Martin is one of those companies that investors love or love to hate. Unfortunately, you only have to look at their products to realize why some investors are not comfortable investing in this sin stock. 

On the other hand, I have yet to talk to any of my friends in the USA who dislike this company. For example, my good buddy Russ from Dapper dividends bought a share cheap at $347 while passing on an expensive 6 dollar meal.

With that said, there is a lot to like about Lockheed Martin. First, 70% of revenue comes from the US government. I would imagine that once a company is working this close to the Department of Defense, it would be hard for another company to come in and take its place. For me, this is a substantial competitive advantage.

I also see future growth because, unfortunately, war or the threat of conflict never really goes away, and countries like the US, China, and Russia spend vast amounts of money in this area. Earnings have grown substantially over the last ten years, and it does not look like it will slow down anytime soon.

Of course, there are risks such as regulation changes, while pressure to reduce costs may mean that new technology may not work as it should. ( think of Boeing here).

Summary

Overall, LMT show solid fundamentals, safe dividend, and future growth potential. This is why they have made it to my watchlist for September. Let me know what you think of these three companies below. Also, let me know what companies you are watching.

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