After my last buy of Magna I haven’t made any new purchases. However, I am always looking for new companies to add to my portfolio. There are currently two candidates on my April watchlist: Williams-Sonoma (WSM) and Accenture (ACN).
Williams-Sonoma (WSM) is a consumer retail company that sells kitchenwares and home furnishings through brands that include Williams-Sonoma, Pottery Barn and West Elm.
WSM is a dividend contender with 11 straight years of raising dividends. It’s current yield is a decent 3.15% with a current trailing payout ratio of 46%.
Apart from it’s attractive dividend WSM is also attractively valued - the current P/E ratio is just 14.46 versus a 5 year historic average of 19.26. In fact WSM’s current P/E ratio is close to it’s 5 year low of 13.85.
The conviction that WSM is undervalued is shared by more dividend growth investors given recent articles on Daily Trade Alert and Seeking Alpha. The chart below - with WSM’s price development over the last 12 months - indicates that a price below 50 is an attractive entry point.
Second on my list is Accenture plc. (ACN), a company providing consulting, technology, and outsourcing services worldwide. Accenture - like Williams-Sonoma - is a dividend contender, boasting 12 straight years of dividend increases.
The current yield is 1.93% with a current trailing 12 month payout of 36%. Although a yield below 2% is not something to be terribly enthusiastic about, the 5 year dividend growth rate (12.38%) certainly is.
Accenture’s current P/E is 18.55, close to it’s historic 5 year average of 17.79. As the picture below shows the company is certainly not cheap as compared to the last 12 months. However, given the dividend history, low payout ratio and high dividend growth I am looking to initiate a position.
Apart from these stocks there is also a book I’d like to buy -‘The Tao of Charlie Munger’. The book promises words of wisdom from Charlie Munger—Warren Buffett’s longtime business partner and the visionary Vice Chairman of Berkshire Hathaway.
What do you think about these two companies? What is your watchlist for the month? Leave a comment/reply to share your thoughts!
WSM has been a new one to me recently and I really enjoy what I’m seeing from them.
DD, thanks for stopping by. I like to see WSM stay under 50 for a while - would be a good entry point.
I didn’t have any of these on my watch list but they deserve some closer research. I agree that the yield is not all that is important when choosing what to buy. The dividend growth percent, if stable, will make up for it over time when holding long term. Thanks for sharing.