Here are the TWO dividend stocks on my radar this month!  As the Federal Reserve continues their march to fight inflation, the real estate market is in an awkward place and the stock market is more volatile than ever – there are always stocks to buy!

dividend stock watch list

Dividend investing happens, whether the stock market is up or down, whether the fed raises interest rates or lowers.  Inflation or deflation.  It’s all about buying dividend income producing stocks – the best source of passive income source on your journey to financial freedom!

The stock market, specifically the S&P 500, is BACK BELOW 4,000, yet again.  As stated earlier, your stomach needs to be iron clad to go through this volatility and stay the course.  The S&P 500 is up over 4% this year, giving back quite a bit of gains over the last month.

Inflation is still over 6%, which is not good and the Fed’s Powell announced more aggressive rate hikes in the future – welcome to another 50 basis points at the next FOMC meeting at the end of March.

Here is the S&P 500 chart below – rising as high as 4,150, dropping to 3,950 and holding just around 4,000:

Interest rates are steadily rising on High Yield Savings Accounts, with many over 3.75-4.00%!  In fact, I wrote about many in a recent article (see below).

Related: STOP Making Extra Mortgage Payments on Your LOW Rate Mortgage

We have a 50 basis point increase coming up in a couple of weeks from the Fed, more than likely.  Then, we’ll probably see more throughout 2023 – I feel like we are heading towards 6.00%.  Therefore, all of the interest rate increases have increased those savings rate.  Ally, where I hold a significant amount of cash, is yielding 3.40%.  However, there is one specific Bank / Fintech application that I use so much more now…

I keep MORE savings in my SoFi savings account – as it earns me – now – 3.75% on my savings with 2.50% on my checking account.

In addition, I’ve been buying stocks on SoFi’s investing application (hint, if you sign up YOU get free stock!  You can automatically buy partial shares as frequent as you want.  Absolutely love investing with SoFi and cannot stop recommending their platform.

Related: 3 Financial Freedom Products I am using to finish off 2022

In addition, given the uncertainty, I continue to make weekly investments into Vanguard Exchange Traded Funds (ETFs).  The specific ETF my wife and I have been loading up on is Vanguard High Dividend Yield (VYM).  We are investing approximately $400 to $600 per week into Vanguard (pending the VYM stock price), to stay invested in the market, during the uncertain times.  In addition, I am also investing $60 per day into Vanguard S&P 500 ETF (VOO)!

Related: Why I’m Investing $500 Weekly with Vanguard ETFs

Related: Dividend Investing Strategy Added – BUYING $50 per day of VOO

Therefore, on the road to financial freedom, acquiring assets that produce cash flow or income is the goal!  Like I always say, there is always a diamond in the rough.  How do I find an undervalued dividend stock?  Time to introduce our beloved Dividend Diplomat Stock Screener!

Dividend Diplomat Stock Screener

If you don’t know already, we keep the stock screener metrics to THREE SIMPLE items.  They are:

1. Price to Earnings Ratio – We look for a price to earnings ratio < than the overall Stock Market.
2. Payout Ratio – We aim for a payout ratio between of less than 60%.
3. Dividend Growth – We like to see history of dividend growth in a company.

See the video below, for further details and explanation.  If you don’t like to watch videos – see our Dividend Diplomat Stock Screener page!

Time to find the answer to… how did the dividend stocks on my watch list grade on the stock screener?

Dividend stock watch list

Here is the list of dividend stocks that are on my radar going into the month of March 2023.  I typically like to keep it at 2-3 dividend stocks, keeping the focus locked in.  Finding dividend stocks isn’t easy, but there are also other factors, such as composition of my portfolio by industry (such as – am I overweight/underweight in an industry), as well as exposure to one stock and the concentration there.

There, the dividend stocks on my list cater to those other facets when building a dividend stock portfolio.

CVS Pharmacy (CVS)

CVS Health (CVS) is on the watch list.  They’ve been punished, due to a new acquisition they announced of ~$9-$10 billion in size, as well as pressure from Amazon’s (AMZN) prescription business.

Therefore, I wanted to watch CVS, as they’ve come tumbling back down to Earth, wild that they were in the $90’s for share price.

First, however, we MUST run CVS officially through the Dividend Diplomats Stock Screener, which is focused on these 3 metrics.

1. Price to Earnings Ratio: Earnings is approximately $8.84 in earnings per share for 2023.  Therefore, CVS is trading at 9x forward earnings right now, very low at the moment.
2. Payout Ratio: CVS’ current dividend payout ratio, using that metric is actually at 27%.  Therefore, there is plenty of room to pay and increase their dividend.
3. Dividend Growth: See the 10 year chart below.  During the Aetna merger announcement and closure, they were a few years where CVS kept/maintained their dividend, as they paid off debt.  They have now resumed dividend increases again, the most recent being 10%!

The dividend yield is now over 3%, which CVS hasn’t yield that much in quite some time.  Definitely a stock to watch and I like them at these prices.

Johnson & Johnson (JNJ)

The Dividend KING is here!  Yes, good old reliable, one of OUR TOP 5 Foundation Stocks, and is a staple in many dividend stock portfolios.

Stock price is down $25 this year or almost 15%.  Yield is touching 3.00% and this dividend king needs to be talked about here.

Bert & his wife own over 100 shares each now of this dividend compounder.  I am not quite at 100 shares, but I am building and have been buying shares of JNJ stock recently.

Let’s run JNJ through the dividend stock metrics, to see if this could be a dividend stock to buy now.

1.) P/E Ratio: JNJ analysts, per yahoo, are expecting $10.51 earnings per share.  That’s a Price to Earnings / P/E ratio below 15x.  Fairly undervalued, especially for JNJ’s standards.

2.) Dividend Payout Ratio: JNJ pays a quarterly dividend of $1.13 per share or $4.52 per year.  This equates to a dividend payout ratio of 43%.  This dividend king is steady as can be, a perfect payout ratio.

3.) Dividend Growth Rate: JNJ has rocked dividend investors for 60+ years of growing dividends.  The average rate is just over 6%, almost each and every time.

Lastly, we’ll take a look at the dividend yield.  As an investor, you want to know how much owning this dividend stock pays you now!  The yield for JNJ is now yielding 2.96%!

Other Dividend Stocks to buy

I am also considering, as a quick hitter approach here, my eyes are on a few other stocks.  Those stocks are Hormel (HRL), Elevance Health (ELV) and WestRock (WRK).  Stocks that are just beat up, no doubt.

I own each stock and am constantly evaluating the stock market, to see if there are undervalued dividend stocks to buy in this wild market.

Dividend Stock Watch List Conclusion

Dividend investing is real and is happening!  Here is our latest video covering TWO Dividend KINGS showing signs of undervaluation:

Of course, prior to making any purchase, I definitely will make sure to run them through the Dividend Diplomat Stock Screener once more.

I may have to add routinely to all 3 dividend stocks mentioned above.  I think these are dividend stocks to buy in March 2023, but again – I highly encourage you do your own research as this is not financial advice (quick disclaimer!).

Related: 5 Reasons Dividend Income is the Easiest Passive Income Source

As you have noticed, I have trickled many articles on this page.  The goal is to educate new dividend investors out there, or to sharpen the terminology for current dividend investors.  As always, stick to your investment strategy and dividend stocks will be there.  What do you think of these stocks above?  Thank you, good luck and happy investing everyone!

-Lanny