Stocks Of The Month: INTC, UNH, V

Welcome to the third edition of the The Fourth Quarter Dividend. Previous editions can be found here and here.

This month I will choose from the "2"s of my portfolio. (Meaning, each of these stocks are roughly target allocated for 2% of my total portfolio.) The candidate stocks are:

Activision Blizzard (ATVI)
BlackRock (BLK)
Chubb Limited (CB)
Comcast (CMCSA)
Costco Wholesale (COST)
Intel (INTC)
Nike (NKE)
Starbucks (SBUX)
UnitedHealth Group (UNH)
Visa (V)
Waste Management (WM)

ATVI: 0.68% dividend yield, 45% payout ratio, $7.2B revenue, -7% revenue growth, $2.0B operating cash flow, $2.1B free cash flow
BLK: 3.08% dividend yield, 33% payout ratio, $13.4B revenue, 2% revenue growth, $3.8B operating cash flow, $4.3B free cash flow
CB: 2.17% dividend yield, 26% payout ratio, $33.1B revenue, 1% revenue growth, $5.0B operating cash flow, $1.2B free cash flow
CMCSA: 1.97% dividend yield, 14% payout ratio, $88.2B revenue, 5% revenue growth, $24.1B operating cash flow, $8.7B free cash flow
COST: 0.99% dividend yield, 30% payout ratio, $141.6B revenue, 5% revenue growth, $5.8B operating cash flow, $2.6B free cash flow
INTC: 2.58% dividend yield, 36% payout ratio, $69.2B revenue, 19% revenue growth, $29.8B operating cash flow, $7.9B free cash flow
NKE: 1.23% dividend yield, 63% payout ratio, $37.3B revenue, 10% revenue growth, $5.7B operating cash flow, $3.1B free cash flow
SBUX: 2.11% dividend yield, 36% payout ratio, $24.7B revenue, 11% revenue growth, $11.9B operating cash flow, $2.0B free cash flow
UNH: 1.33% dividend yield, 26% payout ratio, $219.9B revenue, 12% revenue growth, $10.7B operating cash flow, $7.9B free cash flow
V: 0.75% dividend yield, 19% payout ratio, $20.6B revenue, 12% revenue growth, $12.7B operating cash flow, $10.5B free cash flow
WM: 2.01% dividend yield, 35% payout ratio, $14.7B revenue, 3% revenue growth, $3.5B operating cash flow, $1.1B free cash flow

While there are plenty of good candidates here, the standouts are Intel, UnitedHealth Group, and Visa. They happen to have the top 3 revenue growth rates in the bunch, and on large base revenues; UNH's 12% growth to nearly $220 billion is particularly impressive.

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Tesla (TSLA) 15.92%
Amazon (AMZN) 14.85%
Apple (AAPL) 12.50%
NVIDIA (NVDA) 9.93%
Alphabet (GOOGL) 6.47%
Intuitive Surgical (ISRG) 4.37%
Microsoft (MSFT) 4.32%
Facebook (FB) 3.68%
Adobe (ADBE) 2.76%
Nike (NKE) 2.34%
UnitedHealth Group (UNH) 2.28%
Salesforce (CRM) 2.28%
Visa (V) 2.24%
Intel (INTC) 2.24%
Starbucks (SBUX) 1.65%
Waste Management (WM) 1.61%
Costco Wholesale (COST) 1.38%
Chubb Limited (CB) 1.33%
Booking Holdings (BKNG) 1.31%
BlackRock (BLK) 1.24%
Autodesk (ADSK) 0.98%
Comcast (CMCSA) 0.65%
American Water Works (AWK) 0.58%
CSX (CSX) 0.51%
Norfolk Southern (NSC) 0.51%
Union Pacific (UNP) 0.47%
Canadian National Railway (CNI) 0.42%
Aqua America (WTR) 0.42%
Activision Blizzard (ATVI) 0.37%
Kansas City Southern (KSU) 0.33%

Stock Of The Month: MSFT

Welcome to the second edition of the The Fourth Quarter Dividend. The first edition can be found here.

This month I will choose from the "5"s of my portfolio. (Meaning, each of these stocks are roughly target allocated for 5% of my total portfolio.) The candidate stocks are:

Alphabet (GOOGL)
Facebook (FB)
Microsoft (MSFT)

Of course, MSFT wins by default; the other two do not pay dividends. Just for fun though, let's compare all three by the same dividend-related metrics.

GOOGL: $123.9B revenue, 26% revenue growth, $41.9B operating cash flow, $21.7B free cash flow
MSFT: 1.7% dividend yield, 69% payout ratio, $110.4B revenue, 18% revenue growth, $43.9B operating cash flow, $25.1B free cash flow
FB: $48.5B revenue, 42% revenue growth, $28.0B operating cash flow, $11.3B free cash flow

Both GOOGL and FB could easily support dividends whenever they are ready. I expect GOOGL will declare a quarterly dividend in the next five years.

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Tesla (TSLA) 14.74%
Amazon (AMZN) 14.25%
Apple (AAPL) 14.11%
NVIDIA (NVDA) 13.07%
Alphabet (GOOGL) 6.27%
Intuitive Surgical (ISRG) 4.18%
Microsoft (MSFT) 4.06%
Facebook (FB) 3.86%
Adobe Systems (ADBE) 2.59%
Nike (NKE) 2.28%
Salesforce.com (CRM) 2.16%
Visa (V) 1.89%
UnitedHealth Group (UNH) 1.76%
Intel (INTC) 1.63%
Starbucks (SBUX) 1.54%
Waste Management (WM) 1.45%
Costco Wholesale (COST) 1.35%
Booking Holdings (BKNG) 1.27%
Chubb Limited (CB) 1.22%
BlackRock (BLK) 1.20%
Autodesk (ADSK) 0.91%
Comcast (CMCSA) 0.63%
Activision Blizzard (ATVI) 0.53%
American Water Works (AWK) 0.51%
Norfolk Southern (NSC) 0.49%
CSX (CSX) 0.48%
Union Pacific (UNP) 0.43%
Canadian National Railway (CNI) 0.42%
Aqua America (WTR) 0.39%
Kansas City Southern (KSU) 0.33%

Stock Of The Month: AAPL (The Fourth Quarter Dividend Edition)

Historically, I've thought of the last quarter of the year as the time to buy my favorite dividend stocks...though having searched back, I cannot find much formal evidence of this (a recurring - and not-so-reassuring - theme). So let's fix that.

Welcome to the first edition of the The Fourth Quarter Dividend.

This month I will choose from the "16"s of my portfolio. (Meaning, each of these stocks are roughly target allocated for 16% of my total portfolio.) The candidate stocks are:

Amazon (AMZN)
Apple (AAPL)
NVIDIA (NVDA)
Tesla (TSLA)

AMZN and TSLA can be eliminated from consideration right away: neither pays a dividend.

Now let's compare the remaining two candidates.

AAPL: 1.3% dividend yield, 24% payout ratio, $255.3B revenue, 17% revenue growth, $73.0B operating cash flow, $41.4B free cash flow
NVDA: 0.2% dividend yield, 9% payout ratio, $11.9B revenue, 40% revenue growth, $4.9B operating cash flow, $2.5B free cash flow

As you can see, this is not a particularly close contest. Apple is one of the safest, most well-funded dividend stocks in the market, perhaps ever. It will almost certainly increase payouts year-over-year for the foreseeable future.

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 15.22%
Apple (AAPL) 15.09%
NVIDIA (NVDA) 14.79%
Tesla (TSLA) 11.11%
Alphabet (GOOGL) 6.61%
Intuitive Surgical (ISRG) 4.26%
Facebook (FB) 4.07%
Microsoft (MSFT) 3.04%
Adobe Systems (ADBE) 2.67%
Nike (NKE) 2.29%
Salesforce.com (CRM) 2.27%
Visa (V) 1.87%
UnitedHealth Group (UNH) 1.80%
Intel (INTC) 1.59%
Waste Management (WM) 1.52%
Starbucks (SBUX) 1.35%
Costco Wholesale (COST) 1.34%
Chubb Limited (CB) 1.27%
BlackRock (BLK) 1.27%
Booking Holdings (BKNG) 1.25%
Autodesk (ADSK) 0.91%
Activision Blizzard (ATVI) 0.59%
Comcast (CMCSA) 0.58%
American Water Works (AWK) 0.53%
Norfolk Southern (NSC) 0.51%
CSX (CSX) 0.50%
Union Pacific (UNP) 0.46%
Aqua America (WTR) 0.44%
Canadian National Railway (CNI) 0.43%
Kansas City Southern (KSU) 0.34%

Stock Of The Month: NVDA

This month's choice is (once again) NVIDIA (NVDA), which reported earnings on August 16th...and the market actually did a better-than-usual job of absorbing another outstanding quarter:

NVDA since 8/17/18

Revisiting the catalysts for NVIDIA to outperform the market for the foreseeable future:

• NVIDIA is at the heart of technologies shaping our future:  deep learning, artificial intelligence, datacenters/cloud computing, and automated driving.  Note that cryptocurrency, which was (supposedly) responsible for the market's initial disappointment, was not and is not part of the story.
• NVIDIA's market cap is currently $172B, while Intel's (INTC) is $221B.  Within the semiconductor industry, Intel is the best-in-class manufacturer, while NVIDIA is the best-in-class designer.  If someone wants the most powerful chips in the world, they choose NVIDIA.  Therefore, I believe NVIDIA's market cap will eventually exceed that of fairly-valued Intel's - currently implying a minimum 28% upside.
• The market still cannot catch up to NVIDIA's earnings growth.  Q3 2017 to Q4 2017 earnings growth was over 40%, yet the market believes Q3 2018 to Q4 2018 earnings growth will be negative (from Yahoo! Finance):

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 16.27%
NVIDIA (NVDA) 16.08%
Apple (AAPL) 13.38%
Tesla (TSLA) 11.47%
Alphabet (GOOGL) 6.61%
Intuitive Surgical (ISRG) 4.20%
Facebook (FB) 4.10%
Microsoft (MSFT) 2.88%
Adobe Systems (ADBE) 2.69%
Salesforce.com (CRM) 2.25%
Nike (NKE) 2.21%
Visa (V) 1.86%
UnitedHealth Group (UNH) 1.69%
Intel (INTC) 1.55%
Waste Management (WM) 1.42%
BlackRock (BLK) 1.30%
Costco Wholesale (COST) 1.28%
Chubb Limited (CB) 1.23%
Booking Holdings (BKNG) 1.21%
Starbucks (SBUX) 1.19%
Autodesk (ADSK) 0.97%
Comcast (CMCSA) 0.57%
Activision Blizzard (ATVI) 0.52%
CSX (CSX) 0.49%
American Water Works (AWK) 0.48%
Norfolk Southern (NSC) 0.48%
Union Pacific (UNP) 0.41%
Aqua America (WTR) 0.41%
Canadian National Railway (CNI) 0.40%
Kansas City Southern (KSU) 0.34%

Stock Of The Month: NVDA

This month's choice is NVIDIA (NVDA), who happen to be reporting earnings on August 16th. I see three clear catalysts for NVIDIA to outperform the market for the foreseeable future:

• NVIDIA is at the heart of technologies shaping our future:  deep learning, artificial intelligence, datacenters/cloud computing, and automated driving.
• NVIDIA's market cap is currently $153B, while Intel's (INTC) is $229B.  Within the semiconductor industry, Intel is the best-in-class manufacturer, while NVIDIA is the best-in-class designer.  If someone wants the most powerful chips in the world, they choose NVIDIA.  Therefore, I believe NVIDIA's market cap will eventually exceed that of fairly-valued Intel's - currently implying a minimum 50% upside.
• The market seemingly cannot catch up to NVIDIA's earnings growth (from Yahoo! Finance):

Here's my current portfolio (buy and hold). As always, I believe in all of these stocks - until I sell them.

Amazon (AMZN) 15.16%
Tesla (TSLA) 14.40%
NVIDIA (NVDA) 13.90%
Apple (AAPL) 12.69%
Alphabet (GOOGL) 7.04%
Facebook (FB) 4.43%
Intuitive Surgical (ISRG) 4.12%
Microsoft (MSFT) 2.91%
Adobe Systems (ADBE) 2.66%
Nike (NKE) 2.27%
Salesforce.com (CRM) 2.16%
Visa (V) 1.84%
UnitedHealth Group (UNH) 1.69%
Intel (INTC) 1.67%
Waste Management (WM) 1.45%
BlackRock (BLK) 1.37%
Booking Holdings (BKNG) 1.33%
Chubb Limited (CB) 1.31%
Costco Wholesale (COST) 1.26%
Starbucks (SBUX) 1.21%
Autodesk (ADSK) 0.87%
Comcast (CMCSA) 0.57%
Activision Blizzard (ATVI) 0.53%
American Water Works (AWK) 0.50%
Norfolk Southern (NSC) 0.49%
CSX (CSX) 0.48%
Union Pacific (UNP) 0.43%
Canadian National Railway (CNI) 0.43%
Aqua America (WTR) 0.42%
Kansas City Southern (KSU) 0.35%

Searching With My Good Eye Closed: 97 Stocks That I Don't Own, And Wish I Could (2018 Edition)

If I took you for a ride, would you take it wrong?
Or would you make it right, make it right?
Looking for a pedestal that I can put you on
And be on my way, on my way

Fun fact: I have 12 "watchlists", broken out by sector, which in total contain 543 stocks. These watchlists mostly consist of stocks that at some point in time made me say "wow, that is interesting", followed by me forgetting about them entirely, followed by me looking at them and saying "what is this, and why is it here?"

I also have a 13th watchlist entitled "Short List" consisting of the stocks that I actually pay attention to, and have varying degrees of intent for addition to my portfolio in the future.

I have completed the yearly effort to update the "Short List" by combing through all 13 watchlists, looking for one particular characteristic: the stock must have consistently outperformed the market, across several historical time horizons.

The following 97 stocks made the cut. They may have questionable valuation/financials, or lack upside due to shear size, or participate in a boring business, or represent additional risks going forward; but if the point of investing in individual stocks is to beat the broader market, all of these stocks have a history of doing exactly just that...which may be the most fundamental characteristic of all.

I will track these and post an update one year from now. Find out how the choices of the last two years performed: 2017, 2016.

NAME	SYMBOL	CURRENT MKT CAP	# YEARS ON LIST
Alibaba Group Holding Limited	BABA	488.64B	1
The Home Depot, Inc.	HD	228.34B	2
Mastercard Incorporated	MA	216.92B	-
The Boeing Company	BA	201.59B	1
Netflix, Inc.	NFLX	179.75B	2
AbbVie Inc.	ABBV	144.76B	2
PayPal Holdings, Inc.	PYPL	105.83B	1
HDFC Bank Limited	HDB	86.27B	2
Thermo Fisher Scientific Inc.	TMO	85.32B	2
Caterpillar Inc.	CAT	83.36B	1
Dell Technologies Inc.	DVMT	73.04B	-
EOG Resources, Inc.	EOG	71.86B	-
Becton, Dickinson and Company	BDX	65.93B	2
Stryker Corporation	SYK	65.15B	2
Micron Technology, Inc.	MU	64.31B	-
Anthem, Inc.	ANTM	63.95B	1
Aetna Inc.	AET	62.50B	1
Automatic Data Processing, Inc.	ADP	60.57B	-
CME Group Inc.	CME	56.76B	2
Intuit Inc.	INTU	54.84B	-
Valero Energy Corporation	VLO	46.02B	-
Boston Scientific Corporation	BSX	46.00B	2
Electronic Arts Inc.	EA	45.49B	2
Illumina, Inc.	ILMN	44.79B	-
Humana Inc.	HUM	43.47B	1
Moody's Corporation	MCO	34.83B	1
ServiceNow, Inc.	NOW	34.39B	1
The Progressive Corporation	PGR	34.16B	-
Twitter, Inc.	TWTR	33.94B	-
Spotify Technology S.A.	SPOT	33.55B	-
Fiserv, Inc.	FISV	31.75B	-
TD Ameritrade Holding Corporation	AMTD	31.29B	1
Edwards Lifesciences Corporation	EW	31.02B	2
Align Technology, Inc.	ALGN	29.08B	2
Square, Inc.	SQ	26.96B	1
Red Hat, Inc.	RHT	26.61B	1
iQIYI, Inc.	IQ	24.98B	-
Dr Pepper Snapple Group, Inc.	DPS	22.29B	-
NetApp, Inc.	NTAP	21.57B	-
Best Buy Co., Inc.	BBY	20.87B	1
Arista Networks, Inc.	ANET	20.71B	-
Waste Connections, Inc.	WCN	20.64B	2
IDEXX Laboratories, Inc.	IDXX	20.63B	-
Palo Alto Networks, Inc.	PANW	20.28B	-
Weibo Corporation	WB	20.19B	2
TransDigm Group Incorporated	TDG	18.68B	2
VeriSign, Inc.	VRSN	18.12B	-
Total System Services, Inc.	TSS	16.62B	2
Advanced Micro Devices, Inc.	AMD	16.05B	1
Nasdaq, Inc.	NDAQ	15.59B	2
CoStar Group, Inc.	CSGP	15.51B	1
Ansys, Inc.	ANSS	15.14B	1
Citrix Systems, Inc.	CTXS	14.89B	-
Sociedad Química y Minera de Chile S.A.	SQM	13.80B	2
Copart, Inc.	CPRT	13.68B	2
IAC/InterActiveCorp	IAC	13.01B	1
Zillow Group, Inc.	Z	12.65B	2
XPO Logistics, Inc.	XPO	12.26B	1
HollyFrontier Corporation	HFC	11.89B	-
Veeva Systems Inc.	VEEV	11.84B	1
NVR, Inc.	NVR	11.16B	2
Steel Dynamics, Inc.	STLD	11.04B	2
F5 Networks, Inc.	FFIV	10.84B	-
Jack Henry & Associates, Inc.	JKHY	10.59B	2
GrubHub Inc.	GRUB	10.04B	-
DexCom, Inc.	DXCM	9.22B	-
Bluebird Bio, Inc.	BLUE	9.04B	-
HEICO Corporation	HEI	8.99B	2
Tableau Software, Inc.	DATA	8.88B	-
Robert Half International Inc.	RHI	8.14B	-
Canopy Growth Corporation	WEED.TO	7.81B	-
Guidewire Software, Inc.	GWRE	7.64B	1
NICE Ltd.	NICE	6.64B	-
Ubiquiti Networks, Inc.	UBNT	6.56B	2
Paycom Software, Inc.	PAYC	6.53B	2
Proofpoint, Inc.	PFPT	6.42B	2
Columbia Sportswear Company	COLM	6.39B	-
Fair Isaac Corporation	FICO	6.04B	1
World Wrestling Entertainment, Inc.	WWE	5.75B	-
Stamps.com Inc.	STMP	4.95B	-
Roku, Inc.	ROKU	4.91B	-
Cree, Inc.	CREE	4.58B	-
Teladoc, Inc.	TDOC	4.17B	-
Green Dot Corporation	GDOT	4.14B	2
Proto Labs, Inc.	PRLB	3.54B	-
Baozun Inc.	BZUN	3.46B	-
Emergent BioSolutions Inc.	EBS	2.73B	-
CyberArk Software Ltd.	CYBR	2.44B	-
Central Garden & Pet Company	CENTA	2.15B	-
PJT Partners Inc.	PJT	1.98B	-
Editas Medicine, Inc.	EDIT	1.77B	-
The Greenbrier Companies, Inc.	GBX	1.74B	-
Mazor Robotics Ltd.	MZOR	1.60B	-
Radware Ltd.	RDWR	1.21B	-
Comtech Telecommunications Corp.	CMTL	0.82B	-
DMC Global Inc.	BOOM	0.68B	-
Hooker Furniture Corporation	HOFT	0.58B	1