Estimating Future Stock Returns, September 2022 Update

A new year has come. Man oh man did 2022 ever fly by? The market continues its downward spiral and we can see even better prices out there for long term investors. I think this will continue for at least the first half of 23, but who knows.

Long-term investing in dividend stocks provides the following 5 key benefits:

The beginning of every month is exciting for all dividend income investors as we look back at the previous month and see how much passive dividend income our portfolios generated. No doubt, these are the best posts to write and read online as it only provides further proof that dividend investing can work over time and that anyone can create an ever growing passive income stream.

With a new trading year already in full swing it is time, once again, to highlight some of my potential stock purchases. While the market had a nice bounce the last couple of months, there is still no shortage of stocks that are becoming fairly valued to undervalued.

Competition has heated more than ever in almost every sector. As a result, it has become challenging to identify the best buy-and-hold dividend stocks in 2023. However, some companies have a strong business model in place, and thus they enjoy a meaningful business moat. In addition, they have proved resilient to recessions.

As the new year dawns, investors are struggling to see what’s around the corner for beleaguered EV juggernaut Tesla. Hailed as the new darling of Wall Street during the pandemic, Tesla joined Meta and Amazon as one of big tech’s biggest losers in 2022.

Despite boasting 41 consecutive quarters of dividend increases and currently trading with a hefty yield of 6.4%, Cogent Communications is not making a splash with investors.

Enbridge Inc. (ENB) is a Canadian energy infrastructure company that offers a high dividend yield of more than 6% at current prices. While its valuation is not the lowest in the midstream space, the valuation is still reasonable and justified by Enbridge’s higher-than-average quality.

Leggett & Platt may not be a well-known name, but it is likely that millions of consumers come in contact with the company’s products every day. Despite being under the radar, Leggett has increased its dividend for 51 years in a row, meaning it is a Dividend King.

Boot Barn Holdings (BOOT) is considered a BUY up to a price of $73.20. The company has performed well over the pandemic even though it’s in retail.

Stock Market Commentary

The last time The Bank of Nova Scotia (BNS) cut its dividend was back in 1942, in the midst of World War 2.

V.F. Corporation (VFC) has an exceptional dividend growth record, with 50 consecutive years of dividend growth.

Mining stocks don’t really have a reputation for consistently paying substantial dividends due to the industry’s cyclical nature.

Few companies in the specialty chemicals industry have a history of paying consistent dividends over a long period of time.

New York Community Bancorp (NYCB) is currently offering a very attractive dividend yield of 7.4% while it is also trading at a low forward price-to-earnings ratio of 7.4.

Antero Midstream (AM) is currently offering a very attractive dividend yield of 8.1% while it is also trading at a forward price-to-distributable cash flow ratio of 7.3.

LyondellBasell Industries (LYB) is a U.S.-based chemicals and refining company that offers a high dividend yield of more than 5% at current prices.

Based on a stock selection guide analysis, Adobe looks like a buy opportunity with a projected annualized return of 19.9%. Adobe’s recent acquisition of Figma caused Adobe’s stock price to fall off of a cliff last year but has since partially recovered going into 2023.

Western Alliance Bank (WAL) is projected to be a strong buy with a projected annual return (PAR) value of 19.3%. The bank has a terrific return on average assets (ROAA) of 1.86%.