Top 2016 Picks
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NamePickPrice on Jan 1, 2016Price on Dec 31, 2016Dividends Paid in 2016Total ReturnReason/Comment
Angry Retail BankerKMI$14.91$20.71$0.5042.25%This is a stock that's been beaten down, and you know what they say to do when there's blood on the streets (you buy stocks, not call the police because we're not talking about actual blood. It's an expression). Kinder Morgan has solid assets in terms of its pipeline network, is a bet on natural gas (which I think will one day replace oil as our primary fuel source), and is only indirectly connected to oil prices. Richard Kinder is a major shareholder and, as such, is committed to paying and raising that dividend. And the 75% dividend cut, meanwhile, shows me that they take the health of the business seriously and will make the neccessary short term sacrifices to ensure a safe dividend for years to come (rather than an oversized one today). It's near it's 52 week low. This may be a once in a lifetime chance to pick up a solid, high quality business at a ridiculously great value while it's facing short term issues.
TalesFromTheTapeIPL.TO$22.21$29.64$1.5740.50%Well run company - great dividend track record. Beaten down with the rest of the energy sector, good play on storage of oil and gas on top of transportation.
Dividend DiggerIPL.TO$22.21$29.64$1.5740.50%Very well priced for any dividend growth investor looking for value. Despite low oil prices, interpipeline still generates steady revenue through bulk liquid storage as they are one of the biggest independant tank storage business in Europe.
Dividends in HandTRP.TO$45.19$60.54$2.2638.97%TransCanada's stock was hit with the perfect storm of bad news in 2015: oil prices plummeted, President Obama vetoed the company's Keystone XL pipeline, and the pipeline industry's financing model came under fire forcing Kinder Morgan to slash their dividend. These negative factors have led to TransCanada trading at around a 19X P/E and with a dividend yield of 4.6%. With $12B of near-term, small scale growth projects scheduled, management expects to grow their dividend by 8% a year through 2017. The company's A-/Stable and Baa1/Stable corporate credit ratings reflect their moderate leverage, adequate short-term liquidity, and stable nature of their cashflows.
My Own AdvisorBNS.TO$55.97$74.76$2.8838.72%Whether interest rates go up or down, this big Canadian bank will make money for years to come thanks to its international diversifcation; operating in over 55 countries. At the time of this pick this stock is yielding almost 5%.
JCulleyMAIN$29.08$36.77$2.7335.81%Between the rock solid monthly dividend and the twice yearly special dividend you get a near 10% annual return. Buy below $29. This is the O of BDCs.
Retire29BOFI$21.05$28.55$0.0035.63%Bank of Internet is sitting in a secular sweet spot of banking, with a generational shift to consumers who are comfortable with a branchless bank. BOFI has thus far sported best-in-industry LoanLoss and efficiency ratios. In 2016, they will fully integrate H&R Block's deposit base. They are trading at just a 12 forward P/E but are growing at 30%. In 2015, a frivolous class-action lawsuit (that was seeking a very small amount of damages) was brought forth by a disgruntled former employee. The claims are outrageous, but the sight of any lawsuit has created a temporary buying opportunity. The stock is down some 35% from its highs, which is why simply the return to proper valuation will be cause for great returns in 2016. The federal reserve's rising interest rate policy also helps. Typically, all banks benefit from rising rates. However, BOFI, being primarily a deposit bank, will benefit more than a normal money center bank, as the net-interest-margin will expand disproportionately to industry norms. BOFI is well positioned to benefit from rising interest rates, demographic changes, and recent business acquistions. The shadow of a frivolous lawsuit creates a buying opportunity and a complete misvaluation at just $21/share.
Simply Safe DividendsFUL$36.47$48.31$0.5533.97%FUL manufactures a variety of adhesives products. The company has proven to be very durable (in the same business for 100+ years) and is significantly improving the efficiency of its operations and the profitability of its sales mix. I believe the company has above-average dividend growth potential and is attractively priced at less than 10x my estimate of 2017 free cash flow. Several macro challenges and short-term executional hiccups have caused the stock to appear cheap.
Kingston TraderCWB.TO$23.38$30.34$0.9233.70%Canadian bank in Western Canada. Its been hammered due to oil's drop. Still growing, low PE, low dividend Payout, ~4% yield. Buy low!
Tristan @
ASX: CGF$8.72$11.24$0.3332.63%A great Aussie company. Challenger Limited has a good dividend, 80% of the Australian annuity market and will grow for decades. Australians are living longer with an increasing aging population and people want to have their money in a safe place for those retirement years. Annuities are relatively new to the Australian mindset and the growth in this area has the potential to be huge.
Div4SonADM$36.68$45.65$1.2027.73%Great dividend history with dividend growth. The yield within the sweet spot and the price is currently pretty discounted. Not for everyone, but it should do well if you buy and hold.
Martin @ Hellosuckers.netADM$36.68$45.65$1.2027.73%Great dividend history (40 years of consecutive dividend increases) and great dividend growth (with 13.6% average growth the stock will pay 17% dividend on the original investment in just 10 years).
Pollies DividendADM$36.68$45.65$1.2027.73%Well it is hard to pick one stock. I have several stocks in mind. I choose ADM. This stock has taken a beating in the second part of 2015. It is a great company and i think (and hope ) that it will do good in 2016.
Freedom 35 BlogRY.TO$74.15$90.87$3.2426.92%Canadian banks are growing earnings and dividends. Royal Bank is among the best in the bunch.
Income SurferBRK.B$131.96$162.98$0.0023.51%I am expecting significant volatility in 2016. During volatile times, when the stock markets are declining I expect the Buffett/Munger team to put the cash from their stable of business to good use. I am disappointed/surprised by the recent purchase of Percision Castparts, but I think Berkshire's management deserves time ot let their acquisition play out. Berkshire's stock is down for 2015, and the valuation is reasonable. A great company at a fair price!
DivGroMMM$150.64$178.57$4.4421.49%With the bull market getting long in the teeth, I'm looking for extreme safety. Therefore, my pick is MMM, a Dividend Champion with 57 consecutive years of dividend increases. Yield is 2.62% and 5-year DGR is 10.9%. Dividend growth is accelerating and MMM can afford it -- the payout ratio is only 53%. According to Morningstar, the company has a 4-star rating and trades about 6% below fair value ($160.00). On the other hand, S&P Capital IQ has a 3-star Hold recommendation, a fair value estimate of $126.80, and an A+ Quality Rating. If safe and boring is not your cup of tea and you're looking for growth, SBUX and NKE seem to be great choices.
Dividend HawkEMR$47.83$55.75$1.9120.54%Hard to pick one, but I chose Emerson Electric. Short-term headwinds like stronger US dollar, growth slow-down in emerging markets and low oil prices have driven down EMR's stock price. In my opinion there is much to like about Emerson Electric stock, 59 years of consecutive dividend increases, shareholder friendly management, in recent years EMR's management has been restructuring significantly and also plans a spinoff of its Network Power operations in 2016. I expect double-digit total returns of a year.
Dividend Growth InvestorSCHD$38.56$43.57$1.2616.26%If I had to select just one investment, I would have to pick an ETF or Mutual fund. I am big on diversification, which explains why. This ETF is a diversified portfolio consisting of 100 quality dividend payers such as ExxonMobil, Procter & Gamble, Johnson & Johnson etc.. Many of these equities have a track record of consistent dividend growth. This ETF yields 3%, is commission free at Charles Schwab and has a low expense ratio of 0.07%.
The Broke Dividend InvestorWMT$61.30$69.12$1.9916.00%I believe the negativity around WMT will create extremely pessimistic earnings expectations. WMT has some headwinds but the tailwinds of growing consumer confidence, rising wages, and cheap oil will propel WMT to beat one or two of its earnings. Combine with the escape of high yields due to increased interest rates and the desire for yield, WMT will become a safe haven for the chaotic 2016 trading session. At $61 or $60 entry point I expect a solid 13-13.5% rate of return
Lanny and Bert, The Dividend Diplomats
JNJ$102.72$115.21$3.1515.23%Always attractively valued, always consistent. Yield...growth...products. A stock that has found a way into every one of our screeners. This year most companies weren't as ambitious with their dividend growth and JNJ was there. We consider ol' reliable. A great pick, period.
It Pays DividendsVTI$104.31$115.32$2.2212.68%I have absolutely no idea what is going to happen next year. Are commodoties going to bounce back? How will the interest rate raise (and potential raises) affect stock overall? Given these sorts of factors that are hard to foresee, I like to keep a foundation of the Vanguard Total Stock Market Index ETF in my portfolio. My upside may be capped, and I may even lose some money, but I know that I will be tracking the overall market which over the long-term always goes up.
Monsieur DividendePWF.TO$31.81$33.56$1.5510.37%An eventual increase in interest rates will bode well for our insurance companies. Hence my pick of Power Financial, a stock I already own. PWF has three main assets: Great-West Lifeco, IGM Financial and Pargesa, a Belgium-based holding companywith large stakes in quality European stocks such as Pernod Ricard and Total. PWF trades at a good discount at the moment and I like its new stake in WealthSimple a company that offers robot-advisers services.
Dividend WispAQN.TO$10.91$11.39$0.549.32%Year over year the growth of this company has been amazing. Consistent stream of new, long-term fixed contract renewable energy projects with a ~5% dividend yield. Divs paid out in USD gives additional benefits for CAD trading accounts. Wish I had bought more when i started out and it was at $7.50!
A Frugal Family's JourneyWFC$54.33$55.11$1.524.22%With interest rates on the rise again, we like banks prospects for growth as profits should increasingly get easier as rates continue their long awaited climb.
Dividend ChimpHACK$25.90$26.44$0.192.82%I'm super conservative and I stick with stocks with long track records of dividend increases for my investments, but for fun, if we are speculating for big gains, I would go with the area of cybersecurity taking off in 2016. HACK cybersecurity ETF provides diversification in the cybersecurity industry. More and more companies are attacked each year and this ETF has reached a 1 billion market cap in under one year showing that investors are very interested in the cybersecurity space.
TawcanGOOGL$778.01$792.45$0.001.86%I'll go out on a limb and pick a non-dividend paying stock. After the recent company restructuring and name change, many different divisions have been set up to re-focus on the respective businesses. The new structing will allow Alphabet (or Google as it used to be called) to continue its dominance. Alphabet currently doesn't pay dividends but I wouldn't be susprirsed if they start paying in near future.
Dominic @ Gen Y Finance GuyCash0.00%2015 struggled and volatility reared its pretty little face a few times, but couldn't get the traction it needed to give the over heated market a much needed correction. At some point we always get reversion to the mean. So my hypothesis is either we will have an extended period of low to no returns in order for this to happen OR we will get a large correction to the downside. I think the probability of negative returns is much higher than positive returns in 2016. Therefore I am recommending Cold Hard Cash. Personally I will continue building up my Cash Reserves, will be long Volatility via short puts, and will continue paying down the mortgage early as I don't see any point touching bonds with a 10 foot pole. I have a 4 tier system armed and ready to seize opportunity and all the patience in the world.
Dividend DiatribesSBUX$60.03$55.52$0.85-6.10%Howard Schultz is the man! SBUX keeps growing the dividend too. They have recently added beer, wine, and delivery services. I do not think this company is going away anytime soon. I believe it will do extremely well again in 2016!
Roadmap2RetireSBUX$60.03$55.52$0.85-6.10%Starbucks is one of the best run companies with a top ranked brand value that is seeing rapid expansion across the world. The company boasts amazing revenue growth numbers the outlook for 2016 is no different. While earnings can be manipulated by share buybacks, there is no such manipulation available for top-line revenue growth numbers. In addition to seeing increased traffic and growth in same store sales numbers, the company continues to open new stores and currently plans 1,800 new stores in 2016 (that's 4.9 new stores per day!) with 70% of those coming in international markets. In addition, its a great time to invest internationally with a strong US$. If US$ turns direction, that will add extra tailwind in the coming quarters/years. Another added bonus the fall in commodity/coffee prices providing extra tailwind for the company's financials.
Passive-Income-PursuitCMG$479.78$377.32$0.00-21.36%A bit of a different pick from me but Chipotle looks like a great rebound pick for 2016. The share price is down over 35% from it's 52 week high after concerns of E.Coli at some of their restaurants. However, what's lost in that story is that the problem is correctable and the company can still grow tremendously. The valuation is now at a reasonable level to allow investors to capture future growth. For more of a traditional dividend growth pick I think UPS looks solid here as well. More and more packages get delivered daily and UPS also helps other companies with logistics and optimization. The yield is now up over 3% so 10% total returns should be very achievable from here; however, if the economy slows down after the rate increase is fully digested returns could easily be limited to just the dividend over the next year.
Dividend LordGILD$101.19$71.61$1.84-27.41%Picking only one stock seemed overwhelming at first, but soon it became clear which I should choose. Firstly it should be from my actual portfolio. Is there any clearly undervalued stocks? Well, from my point of view at least, there is one. Gilead Sciences has shown excellent earnings for the short time I have been a shareowner. Yet the stock hasn't really taken off. Resulting in forward P/E below 9. Company has very low payout ratio too, so they have a possibility to increase dividend significantly if they choose. Also this fits well my personal 2016 strategy, where investing in healthcare is one of top priorities.
FI FighterUUUU$2.95$1.64$0.00-44.41%Although I believe that the deflation in commodities is far from being over, this particular uranium stock is just so beat up that it should recover nicely in 2016, in spite of any prolonged weaknesses in the spot price. Energy Fuels has about a hundred million pounds of resources in the ground, both ISR and conventional production, and should be well positioned to ride the next wave up, as soon as the market turns. This is my favorite non-expiring call option on uranium
Retire Before DadLC$11.05$5.25$0.00-52.49%Since the guidelines for this exercise were broad, I'm going to keep it interesting by choosing a growth stock for total return. While I typically invest in index ETFs (primarily VTI) and dividend growth stocks, a small portion of my portfolio is speculative. Only two holdings in my portfolio do not pay a dividend. Those two are Berkshire Hathaway and Lending Club (LC). I'm choosing Lending Club because I believe the fintech industry and this best-of-breed company should continue to grow aggressively in 2016. Short interest is very high (27%) while the company is expected to grow revenues at 70% next year and earnings at 100%+ annually over the next five years. Short-term news and the current distaste for "unicorns" has lowered the stock price into a more reasonable valuation.