Tuesday, January 24, 2023

February 2023 Dividend Stock Watch List

As I'm writing this blog post, it is January 19th. The temperature here in Central Wisconsin is a balmy 30 degrees Fahrenheit, which is above-average for this time of the year!

With that aside, the end of January will be here before we know it. That's why I will be sharing three dividend stocks that are on my watch list for next month.

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Dividend Stock #1: Digital Realty Trust (DLR)

The first dividend stock that I am watching for next month is Digital Realty Trust (DLR). For readers interested in my investment thesis, I would refer them to my Motley Fool article from earlier this month.

The gist of it is that DLR is a leader in the growing data center industry. On top of that, the stock's 4.6% dividend yield is well-covered and much higher than the S&P 500 index's 1.7% yield. And at a price-to-FFO-per-share ratio of 15.6, the stock is a good value at the current $105 share price (as of January 19, 2023).

Dividend Stock #2: Fastenal (FAST)

The next dividend stock on my watch list in February is Fastenal (FAST). FAST's 12.9% hike in its quarterly dividend per share yesterday to $0.35 grabbed my attention.

Analysts believe that the construction equipment distributor will generate high-single-digit annual earnings growth over the medium term. Paired with the stock's 3% dividend yield, this is a nice mix of starting income and growth potential. That's especially the case given that FAST's dividend payout ratio will still be manageable in the low-70% range for 2023.

At a current year P/E ratio of 24.1, FAST isn't the cheapest stock out there. But since the stock just became a Dividend Aristocrat, it is arguably worthy of the premium valuation that it garners at the current $47 share price (as of January 19, 2023).

Dividend Stock #3: WEC Energy Group (WEC)

The third dividend stock that I am paying attention to for next month is WEC Energy Group (WEC). Even though my previous Motley Fool article on the stock (and Main Street Capital and Energy Transfer) was last June, the investment thesis remains intact.

Nearly 5 million customers throughout the Midwest depend on WEC for electricity and natural gas services. As the company updates and expands its infrastructure, analysts expect 6.4% annual earnings growth over the next five years. Coupled with a 3.4% dividend yield, WEC could offer strong total returns. And the stock is trading at a reasonable forward P/E ratio of 19.9 at the current $92 share price (as of January 19, 2023).

Concluding Thoughts:

It's hard to believe that the first month of 2023 will soon be over. I will likely have deployed between $3,000 to $3,500 in capital in January. And I believe that I'll be able to maintain that pace of capital deployment in February as well.


Are any of DLR, FAST, or WEC on your radar for next month?

If not, what stocks are on your watch list for February 2023?

Thanks for your readership. I welcome your comments below!


  1. I was just checking out FAST again after this latest increase. I'd love to see it around $40, but it's a fantastic company. I wouldn't mind some more utilities exposure and WEC is a company that I've rarely looked at but have heard it talked about for a quite a while. That nearly 3.5% yield sure is enticing. I wonder what the population flow is into their service areas because I know there's areas of the midwest that have seen a hefty exodus. Also congrats on deploying a good amount of capital in January we're still in a holding period as we sort out some other opportunities but should those fall through we'll be looking to start re-deploying our cash.

  2. Thanks for reading and commenting.