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Deep Value Dividend Growth Index Month 11 Update: The Top 30 Undervalued Dividend Growth Stocks To Buy Right Now

Posted On October 1, 2017 2:14 pm
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Portfolio Stats:

Portfolio Holdings: 200

Yield: 7.61% (S&P yield 1.87%)
Yield on Cost: 7.75%

Lowest Yielding Holdings:
MercadoLibre (MELI): 0.23%
NVIDIA (NVDA): 0.31%
Shire PLC (SHPG): 0.60%
MarketAxess Holdings (MKTX): 0.72%
Charles Schwab (SCHW): 0.73%
Perrigo (PRGO): 0.76%
Expedia (EXPE): 0.83%
McKesson Corp (MCK): 0.89%
Fedex (FDX): 0.89%
Cintas (CTAS): 0.92%

Highest Yielding Holdings:
Uniti Group (UNIT): 16.37%
Dynagas LNG Partners (DLNG): 12.12%
New Residential Investment Corp (NRZ): 11.95%
Alliance Holdings (AHGP): 10.50%
Golar LNG Partners (GMLP): 9.94%
Sprague Resources (SRLP): 9.88%
Hoegh LNG Partners (HMLP): 9.27%
Ciner Resources (CINR): 9.05%
Delek Logistics Partners (DKL): 9.02%
Global Medical REIT (GMRE): 8.91%

Valuation Metrics

PE: 19.93 (3% below S&P 500)

Price/Fair Value: 0.84

FCF Margin: 19.21% (vs S&P 500’s 19.96%)

Return on Assets: 4.80% (37% below S&P 500 average)

Return on Equity: 18.09% (16% below S&P 500 average)

Average Market Cap: $6.1 billion (93% below S&P 500 average)

Projected 5 Year Dividend Growth: 6.96% (18% above S&P 500 20 year median of 5.9%)

Projected Annual Total Return: 14.71% (62% above the market’s historic CAGR since 1871)

Potential Annual Total Return (assuming valuation regresses to the mean): 15.20% (66% above market’s historical return)

Smallest Market Cap Holdings:
Gladstone Land (LAND): $180.5 million
Global Medical REIT (GMRE): $190.6 million
Jernigan Capital (JCAP): $298.0 million
MedEquities Realty Trust (MRT): $366.6 million
Landmark Infrastructure Partners (LMRK): $387.9 million
City Office REIT (CIO): $417.3 million
PennantPark Floating Rate Capital (PFLT): $472.9 million
WhiteStone REIT (WSR): $503.1 million
Sprague Resources (SRLP): $553.5 million
Westwood Holdings Group (WHG): $600.2 million

Largest Market Cap Holdings:
Apple (AAPL): $800.4 billion
JPMorgan Chase (JPM): $336.6 billion
Wells Fargo (WFC): $278.3 billion
Bank Of America (BAC): $266.2 billion
AT&T (T): $241.3 billion
Procter & Gamble (PG): $232.2 billion
Anheuser-Busch InBev (BUD): $231.3 billion
Pfizer (PFE): $212.9 billion
Oracle (ORCL): $202.9 billion
Novartis (NVS): $202.7 billion

Portfolio Composition: 

REIT:                            34.71%
Consumer Cyclical:    15.80%
Energy:                         14.55%
Industrials:                   9.26%
Healthcare:                  7.04%
Tech:                              5.08%
Basic Materials:           4.97%
Consumer Defensive: 3.91%
Finance:                         2.42%
Utilities:                         1.29%
Telecom:                        0.98%

Largest Holdings:

Uniti Group (UNIT): 23.50%
L Brands (LB): 7.83%
Helmerich & Payne (HP): 7.43%
Shire (SHPG): 2.70%
NetEase (NTES): 2.22%
Delek Logistics Partners (DKL): 2.12%
Kimco Realty (KIM): 2.01%
Ciner Resources (CINR): 1.98%
Dynagas LNG Partners (DLNG): 1.95%
Golar LNG Partners (GMLP): 1.86%

Top 10 Holdings: 53.60%

Worst Performers:
Kroger (KR): -6.55%
Uniti Group (UNIT): -6.51%
Physicians Realty Trust (DOC): -6.38%
Welltower (HCN): -3.91%
American Campus Communities (ACC): -3.35%
Disney (DIS): -3.07%
NetEase (NTES): -3.01%
Brookfield Renewable Partners (BEP; -2.89%
Ventas (VTR): -2.50%
Ramco-Gershenson Properties (RPT): -2.45%

Best Performers:
Novo Nordisk (NVO): 46.18%
D.R Horton (DHR): 43.82%
Unilever (UL): 37.61%
Constellation Brands (STZ): 35.55%
Thor Industries (THO): 29.72%
IDEX Corp (IEX): 29.61%
TD Ameritrade (AMTD): 25.96%
HollyFrontier (HFC): 29.52%
Gildan Activewear (GIL): 25.26%
Prologis (PLD): 25.26%

Portfolio Performance:

Portfolio Annualized Total Return: 24.26%
S&P 500: 17.48%
Outperformance (Alpha): 6.78% Beating Market For Last 8/11 months, currently beating market by 39% so far

This performance is especially impressive given that Uniti Group has been falling off a cliff (why we’ve been buying hand over fist), and should only improve once that stock begins to recover.

About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, Investorplace.com, and TheStreet.com. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 20 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 4% to 5% yield 2. Offers 9% to 10% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

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