I now have a link at the top of my page to my Watchlist. This watchlist is made up of companies only on the CCC list. That’s the Champion, Contender and Challenger list of companies with at least 5 years of dividend increases.
I’ve included several companies that I’d like to own at some point. Companies such as Unilever (UL), Procter & Gamble (PG), Lowe’s (LOW), Aqua America (WTR), Baxter (BAX), and General Parts Co. (GPC) just to name a few.
It’s impossible to own every good company. I’m targeting a 40 position portolio if you saw my Business Plan. The reason I don’t already own some of these companies is not that they aren’t great companies. It’s mainly because I found a better opportunity at the time. Remember what Warren Buffett said? “Price is what you pay. Value is what you get”
There’s exactly 50 companies on the list. This is primarily for two reasons. First, Google Docs will only let you have 50 importhtml functions in a single spreadsheet. Second, I’ll never add an additional 50 companies to my portfolio. This is more than large enough to find a solid company at fair value.
Notice that the companies are sorted by starting yield, with the highest at the top. I’ve also got columns for their current price (updated in real-time), % above/below their 52-week low, beta, market cap, and sectors.
If a company is within 10% of their 52-week low, it’s highlighted in green automatically. This could be a buying opportunity or it could be a warning. Further research would be required.
I think this is a quick and easy snapshot of 50 companies. All of this information is pulled automatically so I find it helpful. I may add/remove companies at my discretion.
How do you utilize a watch list? Any companies you think I should have included/excluded?
First, is this a watchlist for any stock you might purchase or only stocks not owned in your portfolio? That would affect my answer to, “Any companies included/excluded?”.
I’m looking to see some other REITs, ARCP, DLR and O, for example. I checked both your portfolio and watchlist and did not see either.
Thanks,
WE#1
Hi Wallet,
To clarify, these are companies that I don’t own already. Since I already monitor the companies I own, there’s no point in adding them to the watchlist. I essentially have the same information for companies I own from my portfolio page.
You’re right, there are some great REIT’s that I haven’t included. The main reason for that is that my real estate exposure is going to mainly be from buying rental properties. I plan to limit myself to the REIT space for that primary reason.
Thanks for the input!
Hi – Just came across your blog. Your approach to a watchlist seems to make enormous sense. Each of us would want different stocks but the concept is a good one. How do you automatically update the watchlist?
Hi AlBeaMaine,
I’m using a Google Docs spreadsheet to automatically pull the data. There is a list of standard formulas that’s easy to find. The only column that is tricky is getting the dividend yield which uses an importxml function. If you are interested in specific formulas shoot me an email and I can help you. The spreadsheets simplify things a lot since it’s updated in real-time and automatically.
Thanks for stopping by!
My watch list includes information about historical dividend growth rate (e.g., 5-year DGR), which I use to come up with a reasonable estimate of the future dividend growth rate. The estimated DGR is used in a Dividend Discount Model (DDM) calculation to arrive at a fair value estimate (I use the current yield plus the estimated DGR as the discount rate). I also get the fair value estimate from Morningstar, then use the average of the DDM and Morningstar fair value numbers as my overall estimate of fair value. From there, I can calculate the margin of safety based on the current stock price, and set a target purchase price based on a desired margin of safety. Here are some of the columns in my watch list spreadsheet:
– Stock ticker
– Current price
– Annualized dividend
– Current dividend yield
– Historical DGR
– Estimated DGR
– DDM fair value estimate
– Morningstar fair value estimate
– Overall (averaged) fair value estimate
– Margin of safety (current price vs. overall fair value estimate)
– Target price
– Percent difference between current price and target price
The columns for margin of safety and percent difference between current and target prices have conditional highlighting, such that they “light up” different colors when a specific margin of safety is reached (e.g., 10%) or a stock’s current price is within a few percent of my target price.
I also have additional columns for fundamentals, allowing me to look at P/E, P/S, and P/B ratios, as well as other metrics (e.g., ROE). Altogether there are over 40 columns. A long time ago I used to include 52-week high/low information and percent difference from those numbers, but I found it to be of limited use (e.g., a stock can be near its 52-week high yet still offer a nice margin of safety). Thus, I no longer include that information in my watch list.
Hi DGM,
How’s the new job treating you? Any plans to start blogging again soon? I noticed you post updates on Seeking Alpha though.
I really appreciate your detailed approach to your watchlist. I also look at DGR and some of those metrics before making purchases. However, I don’t know of a way to automatically pull that data into a Google spreadsheet. If you do, I’d be very interested to know how. I agree with you that percent difference from a high or low doesn’t tell you a whole lot. It’s more like a simple alert to let me know to look into a company more. For me, this is just a starting point. I don’t have plans of adding many more companies to my portfolio since my target is about 40. I hope to find ways to automatically pull in more useful information like I can do with my Excel sheets so I can view it online.
Thanks for stopping by!
Hi AAI,
The new job is treating me well, but it absorbs most of my time and energy. Given that I spent the past 10 years working toward my current position, my job is my main priority in life right now. I am not sure if/when I will blog again on a regular basis, but I plan to continue with quarterly reviews and brief updates (StockTalks) on Seeking Alpha, which are easier commitments for me. (By the way, I am still a regular reader of several DGI blogs — I just rarely comment anymore.)
Regarding my watch list, it does not automatically pull data from anywhere, so it has to be updated periodically. However, I usually focus on a small subset of the stocks at any particular time, making things simpler to manage.
I haven’t decided on a specific target number of stocks for my portfolio (currently at 36 stocks), but I will likely end up at around 40-50. Lately I have been more focused on adding to existing positions than on starting new ones.
Take care,
DGM
I’m glad to hear the new job is treating you well. I completely understand why you took a break from blogging. It does take a lot of extra time that many people don’t have or want to give up. I do a lot of reading on SA but not a lot of commenting. I’ll be keeping an eye on your updates for sure.
Yeah, if there aren’t a huge number of companies then it’s not so bad. I have a more detailed list in Excel but was looking to put up on my site as much info as I can that can be pulled in automatically.
I’m thinking 40 stocks but that could change. I’m with you about just adding to existing positions, I already have near 40 stocks already myself.
Thanks for stopping by to comment!
Good looking spreadsheet! I like the fact that you can pull so much information automatically.
I’m curious to know how the importxml function works and how you use it to import dividend yield into a google spreadsheet.
I just created a new watch list myself and it is surprising to see how much our watch lists differ.
Interestingly, you don’t have any telecoms in your list. I found only 3 of interest in a list of 204 stocks!
DivGro recently posted…My New Watch List of Dividend Growth Stocks
Hi DivGro,
Thanks! This is just a starting point, so I hope to be able to tweak it more.
Here’s how I got the dividend yield for the first stock, UHT:
In Cell M2, I have “=REGEXextract(REGEXreplace(index (importhtml(“http://finance.yahoo.com/q?s=”&A2&”&ql=1”, “table”, 3), 8, 2); “[()]”; “”) ; “([^/]*) “)” without the first and last quotes. In Cell B2, I have “=M2/C2”, where C2 has the price function “=GoogleFinance(A2; “price”)”. That first formula pulls the information from yahoo finance. Let me know if you need any more help.
I’ll have to go take a look at yours now. Keep in mind, I don’t include any companies I already own though so I’d expect them to differ a lot. You’re right, I should include at least one telecom company. I’m currently content with the two I own though, VOD and VZ. I’ll probably add and remove a few companies this week.
Cheers!
Every month I create my watch list. Here is an example of my last one:
http://www.myjourneytomillions.com/articles/march-2014-dividend-champion-watch-list/
The problem with a static list like the one you created is that it won’t update when someone gets kicked off the CCC list. So what I do is take the CCC list and take only those companies with 20+yrs of dividend increases. Then compare each one’s P/E to their industry (by hand which sucks) . Then Operating Margin. Then B/V then Yield.
Evan recently posted…Cash in: Creativity out
Hi Evan,
I’ll check out your watch list. You may have seen my 10-year YOC screen I do each month when the new CCC sheets come out. I like to use that one as a watch list also. I just wanted another list that would update for me automatically.
I agree that a static list probably isn’t the best but I’m sure I’ll be adding and removing companies on it as needed. So in that sense, it won’t be completely static. The thing is, when I already have a 40 position portfolio, I’m not going to be adding a lot more new companies anyways.
Thanks for stopping by!