Nearing the final turn.
As mentioned in my April commentary, there is the saying “Sell in May and Go Away”. Although I don’t advocate a full sell off, it is often a good time to cull out some of the stocks you may have been wanting to shed. I plan on selling a couple of low yield stocks and sit on the cash until my regular fall purchase cycle. I’m looking at MMM and ITW as possible sells.
With the continuous climb in the markets and the increasing likelihood of a pullback or correction over the summer (remember no one can predict the market), I feel this isn’t a good time to buy. However if you have a lot of idle cash and want to get it working, especially with dividend producers, here is a ranking of the best dividend stocks using my rudimentary model. I look at various factors such as dividend yield, dividend growth, PE ratio, Price/book ratio, Price/sales ratio, analyst targets, price relative to 52 week highs and lows and a few other factors. I put it in a spreadsheet and rank each company on the various factors. Then I produce a scoring using the rankings and list them in order of best buy to least best buy. That was the basis of the stocks I analyzed in my last post. And as you saw, it proved to be a very good model for purchase decisions. I did a quick look at the bottom 5 stocks from my December model ant they just kept pace with the market, vs the top 10 that doubled the market during that time.
Here is my current ranking as of May 10, 2014. Keep in mind, these are all good stocks to own, it is just an indication of which ones might be better to buy now. Note that the Canadian banks rank quite well in this model.
If anyone would like a copy of the full spreadsheet, just email me at firstname.lastname@example.org.
|Bank of Montreal||BMO||202|
|Int’l Business Mach.||IBM||239|
|Royal Dutch Shell ‘A’||RDS/A||252|
|Novartis AG ADR||NVS||263|
|Deere & Co.||DE||263|
|Procter & Gamble||PG||264|
|Exxon Mobil Corp.||XOM||275|
|Johnson & Johnson||JNJ||278|
|Automatic Data Proc.||ADP||279|
|Merck & Co.||MRK||293|
|Baxter Int’l Inc.||BAX||298|
|Unilever PLC ADR||UL||314|
|Illiois Tool Works||ITW||333|