December 2017 Stock Considerations

Here we are entering the home stretch of 2017 and looking back at the last eleven months, one thing is certain… no one predicted a year like this. For all the daily negativity being hyped in the financial, social, political and “fake” media it appears that things have been and will continue to be alright. Of course, nothing in life rises in a straight line. There will always be those annoying bumps along the way whether it’s dealing with family, friends, career, finances and more but if you are looking at the big, long term picture those annoying bumps and near term setbacks tend to look smaller and insignificant the longer your time frame. Just stay focused on your own personal journey, stay diversified and comfortable with all your investments whether it’s stocks, funds, precious metals, real estate and even (gasp) cryptocurrencies. Whatever floats your boat, right? With that being said, let’s take a look at my final 2017 stock considerations.

 

After nibbling on Hormel Foods Corporation (HRL) and General Mills, Inc. (GIS) for the last several months as stock prices hovered near their respective 52 week lows I am forced to look elsewhere as both companies have rebounded quite nicely and other opportunities exist in my portfolio. While I did receive a lot of positive comments about buying into those two companies, there was a substantial set that did not like my buys pointing out that HRL and GIS are both old companies offering up processed and packaged foods that were very much out of date and out of touch with today’s consumer. Hmm, where have I heard that song before??? McDonald’s Corporation (MCD) anyone? In general, I do not like to bet against a dividend aristocrat. I do like to buy them at sale prices though. So, for December, once again, I am considering, Johnson Controls International plc (JCI). JCI is a solid long term dividend paying industrial that has been lagging a bit post it’s Adient plc (ADNT) spin off and continues to look very good to me at current levels. 2017 has been tough for JCI as its stock price lost a lot of ground and is now trading a few points above its 52 week low.

 

Next, I am considering a health sector stock that has also been hammered this year, Cardinal Health, Inc. (CAH). This dividend stalwart continues to pay out a safe dividend with a yield that is also relatively high for this stock. At current prices the stock still seems fairly valued even after climbing from its 52 week low.

 

Sticking to the health sector a couple health REITs are looking attractive to me as well. Names like HCP, Inc. (HCP) and LTC Properties, Inc. (LTC) have seen significant declines the past few months and are looking a lot more attractive these days when compared to earlier this year.

 

Finally, I have to mention that I am also looking at General Electric Company (GE) for a potential December buy. I know there is a lot of uncertainty regarding this stock in the near term but seeing it priced well into the teens it is becoming more compelling as a lot of the negative news surrounding this company seems to baked into the current stock price. Barring some massive sell off in the market or other world events I don’t see much more downside to this stock. Of course, Mr. Market always has the last word and GE, or any stock for that matter, can tank and new names not mentioned in this post may suddenly look attractive on any given day. That’s just the nature of investing.

 

What do you think about my potential stock buys for the month of December? Are you considering any of these names for your own portfolio this month? Please let me know below.

 

Disclosure: Long HRL, GIS, GE, HCP, LTC, MCD, CAH, JCI, ADNT

42 thoughts on “December 2017 Stock Considerations

    • Hi BaM,

      Thank you for those kind words about my blog. I really appreciate it. No doubt, the market is looking extra frothy these days but there are quite a few names that have not participated in this rally. That’s where my focus will be for the month of December. Thank you for commenting.

    • Hi DD,

      The health REITs have been battered during the second half of 2017 with HCP really taking it on the chin. In the mid $20s it looks compelling once again with a pretty sizable yield to boot which is why it made my list for December. Of course, there are quite a few stocks that been left behind this rally so there’s no shortage of selection for any of us. Thank you for stopping by and commenting.

  1. “Annoying speed bumps” I chuckled when family was the first examplr of a speed bump. CAH is looking like a prime entry point! It’s my next purchasr this month and I intend to pick to a decent size. HCP looks nice also but compared to OHI I cant pass it up.

    • Hi DD,

      Speed bumps come in all shapes and sizes. There’s no shortage of them in any life path 🙂 Reading through the comments it looks like CAH is the name to buy in December even with the nice climb from their recent lows. HCP still has its issues but seems to be in a stronger position post QCP spin off. I’m still not sure how long QCP will just sit in my portfolio earning nothing. As always, I appreciate your comment.

  2. Thanks for the post, I have to say these posts I find very valuable. Especially in an overpriced market finding gems that are still buys can be difficult. I really hope GIS can turn things around soon. It takes a while to move a boat that big though I’ve been looking to add more and might do that soon.
    Captain Dividend recently posted…November 2017 Dividend UpdateMy Profile

    • Hi CD,

      I’m glad you find value in these “stock considerations” posts. It’s always interesting to read where people are thinking/looking to invest going forward. I always say that even in markets that are at all time highs one can find stocks that have been left behind the rally. More often than not, that’s where I look. Thank you for stopping by and commenting.

    • Hi DD,

      I can’t ignore GE in the teens, even after the dividend cut. No doubt, the company/stock is in near term peril but I would venture to guess that a lot of the bad news has already been flushed out. The only reason I might consider not adding to my GE at this point is that it’s already a relatively large holding in my portfolio and I have room for more CAH, LTC and others. We’ll see where my final purchase(s) for 2017 will go. As always, I appreciate your comment.

    • Hi MDD,

      The health REITs have really taken it on the chin during the second half of 2017. I’m still relatively light in terms of REIT holdings so I wouldn’t mind nibbling in the sector a bit going forward. We’ll see how December really unfolds. Thank you for commenting.

    • Hi dividendgeek,

      Judging from the comments it seems I should just go with CAH and/or JCI. Looks like those two stocks are getting a lot of love. GE might work out wonderfully given enough time. As long as it stays in the teens it will be a potential buy for me. Not sure if betting against GE is a wise long term choice. Thank you for sharing your thoughts.

    • Hi BD,

      A lot of our peers are liking some of these potential buys for December. I think one shouldn’t ignore an aristocrat on sale. Sure, there’s no guarantee that a rebound will occur, but, as mentioned in the post, I’d rather buy an aristocrat on sale than bet against it. Thank you for stopping by and commenting.

    • Hi ED,

      Another comment voting for CAH. It really is a great company with a very sustainable dividend that’s simply going through a near term rough patch. Sure, the AMZN threat might be a real problem for CAH going forward but in the meantime I think it still has a solid customer base and can continue to grow. That being said, I still would consider GE in the teens despite all the negativity surrounding that stock. Should be an interesting end of 2017. Thank you for commenting.

  3. Hi Divhut,

    interesting list you are having there. I like JCI and CAH. Considering General Electric I just sold all of my stocks as I think it just does not fit anymore to us income investors.

    Cheers
    Andy
    Div.Income recently posted…Recent SellsMy Profile

    • Hi DI,

      JCI and CAH seem to be the popular picks from my short list. I wonder where I’ll go for my December buy as both look compelling to me. I know GE has left a bad taste in many mouths recently but I’ll still watch that name going forward as seeing it priced in the teens makes it hard for me to ignore. As always, I appreciate your comment.

    • Hi DS,

      Both CAH and JCI have been trading lower in recent months which has caught the eye of many dividend investors. While bouncing off their recent respective lows they still seem to offer a pretty good value and safe and growing dividends going forward. Thanks for sharing your HBI consideration.

  4. Nice list div. General electric seems sketchy and id worry about people selling their positions as a loss for tax reasons. Cah and johnston controls seem good. I dont have my eye on anything at the moment but cvs still looks really good especially with the news about getting into health insurance. (That would make them a massive entity and so many different things could work together well)
    Cheers look forward to seeing what u get
    Passivecanadianincome recently posted…2 Dividend RaisesMy Profile

    • Hi Passivecanadianincome,

      You aren’t alone feeling uncertain about GE’s future prospects. I realize that at this point GE is considered more of a speculative play rather than a solid long term dividend investment but seeing it priced in the teens makes it more compelling to buy. I know others are watching the stock and think a price of $15 or so might make more financial sense but I wouldn’t mind nibbling here. Thank you for commenting.

  5. I agree HRL and GIS were great buys for several months, but have rebounded since. So the price isn’t as good as it could be for them. CAH is still pretty good value so I wouldn’t mind getting some more of that. I own GE and HCP currently but I am hesitant to buy more. From the ones mentioned on your list, I would probably add to LTC first. And they pay monthly as well for faster compounding. Thanks for sharing.

    • Hi DD,

      Both GE and HCP are definitely going through a tough time right now which is why I am considering these names in December. I realize that both are facing some pretty serious near term headwinds but can manage to come out alright given enough time. As you know, despite record highs being made in the market frequently, there are still quite a few names that are trading at attractive prices. This rising tide of a rally definitely did not raise every boat. As always, I appreciate your comment.

  6. I’m liking your REIT choices. Most have locked in borrowings at low rates which is a built in hedge against rising rates. Since REITs have a required payout I would think there would be a fairly direct correlation between rising payouts and a new tax system. This would assume the advertised tax benefits materialize.

    • Hi Charlie,

      The REITs in general have had a bad second half of 2017 and the health REITs really seem to have taken it on the chin quite badly which is why I’m looking in the space for a potential December buy. I know HCP is not a favorite among our fellow investors but LTC, on the other hand, has its fan base. With many years of cheap money available, as you the stated, the REITs have been able to borrow at much more favorable costs which should bode well for them in the coming years. Thank you for stopping by and commenting.

  7. Nice list. I never checked JCI. Actually don’t know what they do exactly. I have to read a bit about the company I guess.

    I was surprised to see GE in your list after the dividend cut. But I understand your reasoning. On the other hand, it’s the 2nd time this happens to GE. How do you see the long term prospects?

    • Hi P2F,

      JCI is a solid long time dividend payer in the industrial sector. Not long ago they completed a spin off of one of their divisions and it’s been lagging ever since, but is looking a lot more attractive to me at current levels. Regarding GE, I guess you could say I’m taking a contrary approach and considering buying when others are selling. Clearly, if I am considering buying I do believe in brighter long term prospects for the company. Thank you for sharing your thoughts.

    • Hi DD,

      While I would love to add to some other companies in my portfolio, at this time, as you stated, it’s getting tough to find real gems as the market continues its melt up. That being said, clearly not every stock has risen with the general market as evidenced by this post. When you think about it, many high quality names have gone on sale in 2017 and while some have rebounded others are still relatively cheap. Not long ago GIS, HRL, VFC, GWW and others were great bargains but have since rebounded. Now we are left with the likes of GE, CAH perhaps and some REITs that look pretty cheap at current levels. In any case, I will buy something in December. Thank you for commenting.

  8. Thank you for the post, always interesting to read about investment ideas. Although I’m not so sure about General Electric. As a dividend growth investor, I like to see my dividends rise, not cut in half. It could be one of those companies that might have a massive bounce back upward, but right now I’d rather look at other stocks. Maybe if the company starts getting some momentum again that it peeks my interest.
    Take care!
    – SD

    • Hi SD,

      Believe me, I’m not so sure about GE either. However, seeing it priced in the teens does make it a lot more compelling than seeing it priced in the $20s. I agree that the focus of every DGI portfolio is dividend growth and that we must deal with cuts when they occur, either by shuttling the stock or further diversifying our portfolios to mitigate the effects of the dividend cut. For now, I plan to keep my GE. As always, I appreciate your comment.

    • Hi TDK,

      Thanks for sharing some of your recent picks. I don’t hold any of those names in my portfolio but know they are quite popular among our dividend investing peers. Thank you for stopping by and commenting.

    • Hi DP,

      I hold all my REITs in an IRA account for precisely the tax reason you cite. REITs in retirement accounts seem to make more sense if you do not need that dividend income today. We’ll see which stock(s) I pick for my final 2017 buy, but as you mentioned they all seem like good considerations. Thank you for sharing your thoughts.

    • Hi BM,

      Never looked at UPRO before. Thanks for sharing your pick. We’ll see what 2018 brings. No doubt, we’ll have those small dips to take advantage of but who really knows what will happen. I’ll continue to invest every month as I always have no matter where the market is. Thank you for stopping by and commenting.

    • Hi vivianne,

      JCI still looks attractive to me at current levels. 2017 has not been the best year for the stock and it still appears to be fairly valued. I still plan to make it a long term hold in my portfolio. As always, I appreciate your comment.

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