September 2015 Stock Considerations

What a wild ride August has put us through. The month has shown us that no place was safe to hide as the Dow, S&P, NASDAQ and practically all commodities swooned violently and recovered somewhat before closing out on the 31st. The seeming financial contagion has seen its roots take hold across Asia as China’s Shanghai Composite Index fell a whopping 12.49% while Hong Kong’s Hang Seng ended the month down 11.94% and the Nikkei declined 8.23%. Of course, European markets performed poorly as well, and the American markets saw its biggest monthly decline since 2010. What does all this mean for a long term dividend investor? Sale! After such a poor performing August multiple stocks across various sectors are looking a lot more attractive. Many industrial names are suddenly sporting much better valuations as well as yield along with a few consumer staple names that are starting to make my consideration list for September.

August was a light month for new buys in my portfolio as only one purchase was made the whole month. I’m looking to buy more in September, especially if the market continues to provide opportunities for me to average down on some quality dividend payers I already own.

With that being said, let’s take a look at my September stock considerations.

First on my list is Caterpillar Inc. (CAT). A dividend stalwart that needs no introduction, CAT has fallen dramatically out of favor as troubles in China and the energy sector weigh on this cyclical giant. With a current dividend yield sitting around 4% this industrial name is hard to ignore.

In similar vein, another industrial giant that has been taken to the wood chipper and has caught my eye is Emerson Electric Co. (EMR). Another dividend “giant” with aristocrat status, EMR is sitting near 52 week lows and also sports a relatively high dividend yield approaching 4%.

Sticking with the industrial theme, Dover Corporation (DOV) is another September consideration of mine. A company with a very long history of dividend raises is no doubt feeling a bit of pinch because of lower oil prices as demand for their oil and gas services are weakening in the near term. While not the highest yielding of the bunch, DOV looks a lot more attractive in recent months as valuation is coming more in line with present cash flow.