3 Stock Considerations for November

ID-10022024 3 Stock Considerations for NovemberWhen working on my stock considerations for the month, I like to use the CCC spreadsheet which is run and maintained by Dave Fish. When looking at the spreadsheet, I like to add my own data filters. This helps me find companies that meet my set of criteria. After the filters were added, I now had a list of companies that I can start researching. This is how I came up with the four stocks listed today.

 

 

 

 

AT&T Inc. (T)

I am considering AT&T as a potential stock buy because of its high safe dividend that it pays out. Matter a fact, I made two buys already. You can read my analyses on ATT and check out my second buy.

ATT currently has a dividend yield of 5.82%. The 5-year average is 5.2%. I like to look at this dividend yield of today vs. the 5-year average because it helps me determine if the company is worth my time for further research.

The next question I like to ask myself is “Can ATT continue to pay this dividend?”

The answer is yes, ATT can.

ATT has a dividend payout ratio of 91%. This payout is a lot higher than what I normally like. However, when looking at the Free Cash Flow Per Share and comparing it to the dividend we get a payout ratio of 70%. This tells me that ATT does have the cash to continue to payout this fantastic dividend.

Another metric I like to look at is the current PE, the PE 5-year average, as well as Forward PE.

Right now ATT sits at a PE of 15.8 with a 5-year average of 27. This tells me that ATT is extremely undervalued compared to its 5-year PE average. Not only is it undervalued now, but its forward PE is 11.2.

Here we have a chart from F.A.S.T. Graphs and whenever the black line is under the orange/blue line, it is considered to be undervalued. Here we see that ATT is indeed undervalued since it is under both the blue and orange line.

 Screen-Shot-2017-10-26-at-7.58.57-PM 3 Stock Considerations for November
 Source: Fastgraphs.com

Cardinal Health Inc (CAH)

I am considering Cardinal Health as a likely stock buy because of its very low valuation. Matter a fact, I made two buys already. You can read my analyses on CAH and check out my second buy.

CAH currently has a dividend yield of 2.86%. The 5-year average is 2.0%.

The next question I like to ask myself is “Can CAH continue to pay this dividend?”

The answer is yes, CAH can.

CAH has a dividend payout ratio of 45%. This is very low. This kind of payout gives a company like CAH a lot of room to continue to grow its dividend. As you see in the chart below, CAH earnings are expected to continue to grow.

Now let’s look at CAH current PE, the PE 5-year average, as well as Forward PE.

Right now CAH sits at a PE of 16.07 with a 5-year average of 27.3. We see here again that CAH is undervalued when comparing to its 5-year PE average, and CAH is sporting a forward PE is 13.5.

In this chart, we see that CAH is certainly undervalued since it is under both the blue and orange line. 

 Screen-Shot-2017-10-26-at-8.26.37-PM 3 Stock Considerations for November
  Source: Fastgraphs.com
  

CVS Health Corp (CVS)

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I am planning to buy more shares of CVS because of the same reason why I am planning to buy CAH. They both very undervalued with really good upside.
CVS has a current dividend yield of 2.90% and a 5-year dividend yield average of 1.5%.
CVS can continue to pay its dividend as well as continuing to grow it because it currently has a payout ratio of 37%. That is a very low payout. As we see in the FastGraph, we see that earnings are projected to continue to grow. The best part about this is that analyst has been correct with predicting earning 100% in a one-year time frame and 93% looking forward two years.
CVS PE is now at 13.75. CVS 5-year PE average is 20. Based on todays prices and future earning, CVS forward PE is at 10.8.
 Screen-Shot-2017-10-26-at-10.00.10-PM 3 Stock Considerations for November

Conclusion

All tree company I currently own and will be adding to them each in the near future. All three company dividend payout is safe and all three have been increasing their dividend for at least 14 years.
I feel super excited about the three company and can’t wait to add to them.

Thanks for reading, and don’t forget to follow me:

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Comments

  1. FV –

    Holy $*%#, literally – I have the SAME 3 stocks to consider for November and my article is currently going through the review phase right now!! Glad I am not the only one. I like AT&T above them all, then CAH. CVS and retail is the part that is to be determined for me. Great list, haha, and yes – that’s a bias response!

    -Lanny

  2. Thanks for sharing and for showing your Fast Graphs. I love that tool. I don’t own it anymore, but when I did, it was used daily. I like all three picks. I added 100 shares of AT&T last month, but I don’t own any CAH yet. Maybe it’s time to buy some.

    • IH, you are welcome. Thanks for reading. I love Fast Graphs also. Like you, I use it every day. I plan to add more shares to my CAH holding. Thanks for stopping by and commenting.

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