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Intro
Friends, I want to share a few thoughts on two companies sitting on my watchlist right now. I think walking through them openly can be just as useful for you as it is for me.
As many of you already know, I keep a running list of companies I track closely. My goals with every pick are simple and consistent:
Get paid from day one. Dividends at the moment of purchase matter to me. The bigger the check, the better.
Dividend growth. I want those payouts climbing year after year. The faster the growth, the more powerful the compounding.
Capital protection. My money needs to be safe.
Capital growth. Over time, I want the value of my shares to rise too.
That’s how I pick companies—both for my family’s core portfolio and for my public “experiment portfolio,” the one I started from scratch a year ago with the goal of building $12,000 per month in dividends within 10 years. That’s the public target.
To reach it, I stick with financially strong businesses, undervalued at the moment, paying me well today while also offering clear paths for dividend and capital growth. The MaxDividends app helps me a lot with that analysis.
I’m conservative when it comes to managing money. But I also believe stocks are one of the best ways to lock in a rising stream of passive income—and, with time, the freedom to live life on your own terms.
First Company — Why It Caught My Eye
On paper, this one looks solid. Here’s where it shines:
Dividend growth has been clockwork ever since the company started paying.
Current dividend yield sits at about 3%, higher than its 10-year average.
Payout ratio is under 30%, which gives me confidence in future raises.
EPS is strong and running well ahead of its 10-year average.
The company buys back shares regularly—8 out of the last 10 years.
Right now, the stock trades below book value.
What’s the catch? It’s still a young dividend payer. No 15-year streak yet. That’s my first screen. But the intent is there, and management clearly wants to build that history. For me, that makes it worth watching.
Second Company — Strong but With Caveats
This one’s a bit more established, but not without questions:
Dividend history: Paid for 12 years straight, with increases in 10 of them. But one year, they paused. Not a cut—just no raise. For a conservative dividend investor like me, that’s a red flag.
Payout ratio: About 65% right now. That’s fine, but ideally I want it below 60%, even better if it’s under 50%. Gives more cushion in tough times.
The good stuff:
Current yield near 5%.
Dividend growth of about 15% per year over the past decade.
Another raise likely coming soon.
Stock looks undervalued versus the market and its own 10-year history.
Solid fundamentals: revenue, operating profit, balance sheet—all better than peers in its space.
Consistent share buybacks (again, 8 of the last 10 years).
The upside? Analysts see potential for about 50% capital appreciation from here. If payout drops below 50% on a trailing basis, and the price stays where it is (or even better, goes lower), I’d likely buy. But right now, I’m staying patient.
So Where Am I Putting My Money?
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