Best Dividend Stocks to buy in October 2023
In this series of articles called “Monthly buying sessions” I will show you how I make my investment decisions every month taking no more than 10 min a month. I will provide full transparency of my stock picks and show you real portfolio performance.
This is something I always wanted to see when I was initiating into stock investing, but haven´t actually seen anyone doing on the web. Professional investors usually like to give recommendations and sound like experts, but will never tell you when the outcome is not as expected.
I will call this new portfolio as HOD public portfolio with the objective to share with you the way I take decisions on my own investments and the method I use to pick the best stocks every month.
This may be especially good for those that find it hard to give their first steps into the stock market and those who simple want to learn more and read different perspectives.
Assumptions
- I will invest $1,000 every month in Dividend Aristocrats stocks
- All dividends will be reinvested (Never use the automatic reinvestment tool offered by brokers)
- I will buy the best stock each month, except for diversification constrains once the portfolio starts to grow (we don´t want to concentrate too much risk in a few stocks)
Target companies aligned with my investment will meet below conditions:
- Pay interesting dividends yields (>3% depending on current market conditions)
- Have decent dividend growth ratios (ideally above inflation) and had been incrementing dividends for at least 25 consecutive years (All dividend aristocrats meet this last condition)
- Companies with reasonable payout ratios, since I focus on long term investments. Companies with high payouts are more likely to cut dividends that those with a reasonable one. (With exceptions, depending on the business sector, reasonable payouts are below 65%)
- Healthy business model. I won´t invest in companies with high debt ratios, nor companies with decreasing sales or profit margins. I will also avoid companies with known relevant legal issues until potential contingencies are cleared
Analysis
As usual, I started this month stock screening using up to date dividend aristocrats data on the dividend aristocrats section of my website 2023 Dividend Aristocrats, where you will find entire list of relevant stock ratios.
If we order by growth target, we can have an idea of the upside potential expected by analysts. However, not all the stocks above may be a good fit for my investing strategy.
The pillars of my investment strategy:
- Stocks that pay attractive dividends yields (generally above 3% depending on current market conditions)
- Have decent dividend growth ratios (ideally above inflation) and
- had been incrementing dividends for at least 25 consecutive years (All dividend aristocrats meet this last condition)
- Companies with reasonable payout ratios, since I focus on long term investments. Companies with high payouts are more likely to cut dividends that those with a reasonable one. (With exceptions, depending on the business sector, safe payouts are below 65%)
- Healthy business model. I won´t invest in companies with high debt ratios, nor companies with decreasing sales or profit margins. I will also avoid companies with known relevant legal issues until potential contingencies are cleared</li>
It is very important always to stick to your investment strategy, since many times you may be tempted to buy bargains or take shortcuts driven my specific market conditions or some news you may have heard on the press. <strong>Stay focused!
Why did I bought Pepsico this month?
Pepsico at current market conditions seems to be a very attractive stock.
- Due to current stock downturn dividend yield increased to 3.11% and now fits within my investment strategy (I have been waiting for Pepsico to be above 3% for a long time)
- Recent dividend increase of 10%, plus a track record of consistent dividend growth of 6.7% average during the last 5 years</p>
- Consistent and sustainable earning increase</p>
- Impressive stock revaluation along the years with very few exceptional periods
Conclusion
In my opinion and for my 10min a month investment strategy, Pepsico (PEP) is the best dividend stock of the month. I purchased 6 shares at $157.59.
Happy investments and see you for next month buying session
There are other tools that I have developed for myself that I do use to facilitate and speed up my stock picking process covering many other ratios and indicators I didn´t mention in this simplified analysis. Some of those are currently being enhanced and adapted to make it available to you on this website. If you like this article or are interested in receiving a notification when new tools or content is available register to our newsletter at the bottom of this page (I don´t spam).
Disclaimer: The information provided in this article is for educational purposes only and should not be considered as investment advice. Always conduct thorough research and consult with a financial advisor before making any investment decisions.
