Three New Buys from a Dividend Detective

06/18/2020 5:00 am EST

Focus: DIVIDEND

Harry Domash

Publisher, DividendDetective and Winning Investing

Harry Domash is a long-standing expert on income investing; in his latest Dividend Detective, he highlights a diverse trio of new recommendations among dividend-paying equities — a drug store operator, a REIT and a regional bank.

We’re adding CVS Health (CVS) to our manufacturing and services portfolio. CVS Health is a major drug store chain but also operates a pharmacy benefit management unit. Its drug stores offer prescription drugs plus a wide assortment of general merchandise items.

Pharmacy benefit services include mail order pharmacy services, specialty pharmacy services, claims processing, etc. In 2018 CVS acquired health insurer Aetna. CVS is paying a 3.1% dividend yield and we’re looking for 5% annual dividend growth.

We’re adding Gladstone Land (LAND) to our portfolio of real estate investment trusts. Gladstone owns farmland and related properties in 10 states that it leases to corporate and independent farmers on a triple-net lease basis (tenants pay all expenses).

Although a 2013 IPO, Gladstone is still growing revenues around 10% annually. Gladstone pays monthly dividends equating to a 3.7% yield.

In our U.S. bank portfolio, we’re adding Citizens Financial (CFG), which operates 1,200 full service retail banks and 2,000 ATMs in the New England, Mid-Atlantic and Midwest regions, to the portfolio.

Citizens, trading at 75% of its tangible book value, is undervalued, and analysts expect it to close that gap. Even better, Citizens is a serial dividend raiser; it’s currently paying a 6.5% yield, which is high for a bank.

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