As I'm writing this blog post, it's currently Friday, June 6th. The temperature here in Central Wisconsin is expected to reach a high of 72 degrees Fahrenheit later today, with the forecast being partly sunny. That temperature is less than the average for this time of year, but arguably perfect.
Having likely completed all of my dividend stock purchases for the month, I believe now is a great time to look ahead at three stocks at the top of my watch list for July 2025.
Stock #1: Amazon (AMZN)
First up on my watch list for next month is Amazon, which is no stranger to this blog post series. I just discussed it in my May 2025 Stock Watch List blog post. Interested readers can also find my investment thesis in my recent Seeking Alpha article.
The crux of my investment thesis is that Amazon is a leader in industries with secular growth trends like e-commerce and cloud computing. The company is also a financial fortress, with an AA-rated balance sheet. Trading at a forward 12-month P/OCF ratio of 15.1, shares are also substantially discounted relative to the 10-year average P/OCF ratio of 23.8 per FAST Graphs. The current share $214 share price (as of June 6th, 2025) is substantially less than my fair value estimate of $304 a share.
Stock #2: Enterprise Products Partners (EPD)
Next up on my watch list for July 2025 is Enterprise Products Partners. EPD's most recently appeared in my April 2025 Stock Watch List blog post. Curious readers can also check out my investment thesis in my Seeking Alpha article from last month.
The heart of my investment thesis centers around $7.6 billion in major projects that EPD currently has under development. Most of these projects ($6 billion) are going to be finished in 2025. I'm also confident that any future projects the company initiates construction on will earn excellent returns for unitholders. This is because of EPD's reputation for having a high return on invested capital. The 6.8% distribution yield is also well-covered. The company also has the only A-rated balance sheet among its midstream peers. Topping off the buy case, units are trading at a forward 12-month P/OCF ratio of 7.6 from the current $31 unit price. This is cheaper than the 10-year average P/OCF ratio of 9.6 per data from FAST Graphs and my fair value of $36 a unit (based on my fair value P/OCF ratio of 8.6).
Stock #3: Union Pacific (UNP)
The final stock on my watch list for July 2025 is Union Pacific. The last time I covered this one on my blog was in my December 2022 Dividend Stock Watch List blog post. Readers can find my investment thesis in an iREIT+Hoya Capital listicle from March.
The gist of my investment thesis is that railroads have efficiently moved big and bulky freight for roughly 200 years. As the economy continues to grow and Union Pacific invests in becoming even more efficient, this bodes well for future earnings growth prospects. The company's 2.4% dividend yield is also secure and positioned for payout boosts in the years ahead. Union Pacific also enjoys an A-rated balance sheet. The stock is also trading at a forward 12-month P/E ratio of 18.5, which is below the 10-year average P/E ratio and my fair value multiple estimate of 21.2. That implies shares are worth $257 each and moderately undervalued from the current $223 share price.
Concluding Thoughts:
Another month. Three more excellent companies on my watch list. I'm planning on a roughly 40% weighting to AMZN, with the remainder being pretty evenly split between EPD and UNP. This will help me stay close to a weighted-average yield of 3%, while also providing my portfolio with growth and value.
Discussion:
Are any of AMZN, EPD, and UNP on your watch list in July 2025?
If not, what stocks are on your radar in the coming weeks?
I appreciate your readership and welcome your comments below!
