I'm currently sitting on 24 positions in my dividend growth portfolio. The goal is to hold 30-35 companies representing all sectors. What I notice right now is the following:
-I have nothing from the Materials sector
-I only have one position in Financials and Consumer Discretionary
-I need to beef up Health Care
-I need more foreign holdings
The plan is to slowly make new purchases to rectify these shortcomings. I have 6 slots open before I reach 30 without counting spinoffs from COP and ABT. My goal is up to 35 so I can include spinoffs and other future opportunities. Below is how I anticipate rounding out my portfolio, it is always subject to change depending on future developments.
1) Materials Sector - A few weeks ago I researched the sector and concluded APD would best fit my objectives. With the recent div. increase APD now yields about 2.8% which makes it a good candidate for my strategy. Unfortunately APD is kind of pricey, I can wait. Alternate: CMP
2) Consumer Discretionary Sector - My only holding here is MCD. The best candidate I could find to augment MCD is GPC which has over 50 years of dividend increases and a yield north of 3%. GPC is also pretty pricey right now. Alternate: None
3) Financial Sector - I am weary of this sector after the meltdown a couple years ago. I'm sorry but I cannot trust large banks. Who knows what they are holding or what they are doing. I do, however, feel comfortable with small banks and foreign banks, namely Canadian. I'm also open to insurance companies, there are many choices. Right now I hold SBSI. I'm thinking of adding AFL, BMO, BNS, or RY. I need to look at Canadian banks in depth, but Canada is known to be a banking safe haven.
4) Health Care Sector - Currently hold ABT and JNJ. I haven't made a new purchase in this sector in quite a while. I've looked at potential candidates for a third company and concluded MDT would be ideal. It is currently yielding about 2.5%, I'll wait for a better yield. Alternate: OMI
5) Foreign Stocks - I would like to increase my foreign holdings. I only hold EIFZF (EIF on the Toronto Stock Exchange) from Canada. The problem I usually encounter is two fold: I don't want my dividends withheld, and I want quarterly or monthly payments. There aren't many options outside Canada and the U.K. I am leaning toward Canadian banks listed above and also like UL and EMRAF.
6) MLP - Oil pipelines come to mind for MLPs. What ever company I choose, it will not be a pure natural gas pipeline (I already have that in BWP and TCP). SXL and KMP have shown weakness as of late. I was tempted to make a purchase the past few weeks.
I like the direction my portfolio is headed. It's a good time to be in dividend stocks.