As I'm writing this blog post, it's Monday, May 11th. The temperature here in Central Wisconsin is set to reach a high of 61 degrees Fahrenheit today, with a sunny forecast. That's a bit below what's typical for this time of the year, but I'll still take it.
Now that I have executed my stock purchases for May 2026, I will be looking ahead to next month by highlighting several stocks on my watch list. Let's jump into it!
Stock #1: American Water Works (AWK)
The first stock on my watch list for the next month is American Water Works. Readers can check out my most recent investment thesis in this February Seeking Alpha article.
The crux of my investment thesis centers on the $18 billion to $20 billion five-year capital spending plan for 2026 through 2030 (not counting capex from Essential Utilities). The company also had over 1.5 million customer connections in its pipeline that it can acquire to further enhance growth. This is expected to support 7% to 9% annual adjusted EPS growth for the foreseeable future. AWK also enjoys an A S&P credit rating with a stable outlook. The 2.8% dividend yield is also well-supported by underlying profits, which positions it for a high-50% payout ratio in 2026.
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Capping off the buy case, the water utility looks to be a solid value. From the current $126 share price, the stock is priced at a forward 12-month P/E ratio of 20.1. This is well under the FAST Graphs 10-year average P/E ratio of 29.2 and 16% less than my $150 fair value per share estimate (a fair value multiple of 24). My friends over at GNG Research think the value is even more compelling, with a $176 fair value of their own.
Stock #2: Mastercard Incorporated (MA)
The next stock on my watch list for June 2026 is Mastercard Incorporated. Interested readers can peruse my investment thesis in this Dividend Kings listicle (if you're not subscribed to the service, it will be posted to Seeking Alpha under Treading Softly's account any day now).
The gist of our thesis is that MA is a leading payment processor alongside Visa. In the first quarter of 2026 alone, its payment network handled almost 44 billion switched transactions and $2.7 trillion in gross dollar volume. Recent business wins and the beauty of its business model (e.g., it benefits from inflation through higher gross dollar volumes) have us confident that MA can keep generating mid-teens percentage annual adjusted diluted EPS in the years ahead. The A+ S&P credit rating also gives it the flexibility to complete bolt-on acquisitions that further complement its business. MA's 0.7% dividend yield is very secure, with a payout ratio poised to be in the high-teens in 2026.
For its overall quality, the payment processor looks to be an intriguing value right now. At the current $501 share price, the stock is trading at a forward 12-month P/E ratio of 24.1. That's considerably below the 10-year average P/E ratio of 34.3 and represents a 22% discount to my $645 fair value per share estimate (a fair value P/E ratio of 31).
Stock #3: MPLX LP (MPLX)
The third stock on my watch list for next month is MPLX LP. Curious readers can find my thoughts in a February Seeking Alpha article that I co-produced for Treading Softly.
Basically, MPLX is steadily growing its volumes. The continued integration of Northwind's Delaware Basin assets into its network is another forward-looking catalyst, with the Titan Complex set to come online in Q4 2026. Adding in the BANGL Pipeline expansion (coming into service in Q4 2026 as well) and Harmon Creek III (expected in Q3 2026), this should lead to consistent mid to upper single-digit percentage annual adjusted EBITDA per unit growth beyond 20%+ growth in 2026. MPLX boasts a BBB S&P credit rating with a stable outlook as well. The partnership's 7.9% distribution yield is secure, too.
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GNG Research
Units look to be a decent value right now. From the current $54 unit price, MPLX is priced at a forward 12-month P/EBITDA ratio of 7.2. That's moderately below the 13-year average P/E ratio of 8.4 and a 4% discount o my fair value per unit estimate of $57 (a fair value P/EBITDA ratio of 7.5).
Stock #4: Microsoft Corporation (MSFT)
The next stock on my watch list for June 2026 is Microsoft Corporation. Readers can pore over my investment thesis in my April 2026 Stock Watch List blog post (which is essentially unchanged with the recent release of the Q3 2026 earnings report).
The big picture is very promising, with the cloud computing and enterprise software markets set for robust growth in the coming years. That should power teens mid to upper teens percentage annual non-GAAP diluted EPS growth over the next several years. With the payout ratio set to be in the low-20% range in FY 2026, MSFT's 0.9% dividend yield is quite sustainable. What's more, the company's AAA S&P credit rating makes it the only tech company with a flawless credit rating from the agency.
At the current $412 share price, MSFT is trading at a forward 12-month P/E ratio of 21.7. This is far under the 10-year average P/E ratio of 29 and a 23% discount to my $532 fair value per share estimate (a fair value P/E ratio of 28).
Stock #5: NVIDIA Corporation (NVDA)
The final stock on my watch list for next month is NVIDIA Corporation. Once again, I would refer interested readers to my April 2026 Stock Watch List blog post linked above.
Basically, the 70%+ non-GAAP diluted EPS growth (to $8.12) forecasted for the current fiscal year is mind-blowing for NVDA's sheer size and scale. Beyond this fiscal year, the ongoing hyperscaler capex bonanza is expected to power firmly double-digit percentage growth over the next couple of years as well. The extent of NVDA's free cash flow and its AA- S&P credit rating are undeniable positives, too.
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GNG Research
From the current $220 share price, NVDA is priced at a forward 12-month P/E ratio of 24.9. That's much less than the 10-year average P/E ratio of 44.3 and the 20-year average P/E ratio of 35.1. Even applying a significant margin of safety (a fair value P/E ratio of 30 and a fair value per share estimate of $265), NVDA is trading at a 17% discount to fair value. GNG Research's fair value is even higher at $295 (a fair value P/E ratio of just above 33), which I could certainly see as being reasonable.
Concluding Thoughts:
There we have it. I don't have my allocations down to science quite yet, but I'm likely going to push my income picks in AWK and MPLX to just above 40%, with the remaining allocation skewed a bit more toward MA and MSFT (to keep my weight in NVDA capped in the high single digits).
Discussion:
Are any of AWK, MA, MPLX, MSFT, or NVDA on your watch list for June 2026?
If not, what stocks are you watching for next month?
Thanks for reading and please feel free to comment below!
