December 2018 Stock Considerations

As we soon enter the last month of 2018, it is time, once again, to highlight some of my potential stock buys for December. It’s funny how some months I prepare a long list of potential stocks to buy and other months I barely scrape a few names together. With the start of December at hand it appears I’ll have a very short list of potential buys. With that being said let’s take a look at my potential picks for the up coming month.

 

First up, I’m thinking about doing more of the same which is buy more AT&T Inc. (T), especially if stock prices remain at $30 or below. T was my sole purchase in November as prices remain depressed and yields get pushed ever higher. Sure, there are a lot of near term headwinds this company is currently facing, not least of which is its debt load, but, the dividend still appears to be quite safe and can reward patient shareholders over the long haul. T still remains less than 1% of my taxable account and much less when compared to all three of my portfolios. In other words, I’m still comfortable adding to my position.

 

Next, is a polarizing name that you either love or hate but looking strictly at the numbers has become too hard to ignore. I’m talking about Altria Group, Inc. (MO). MO has had a tough 2018, but in recent weeks the stock has really been beaten down hard pushing yields to around the 6% mark. With a moderate payout ratio around 51%, MO has the cash to keep paying this juicy yield. As with T, MO is also less than 1% of my overall portfolio which allows me to add to my position.

 

Finally, I’m looking at a couple of health sector names that have also been beaten up as of late but seem to offer good potential long term gains and yields, Gilead Sciences, Inc. (GILD) and AbbVie Inc. (ABBV). While I am really loving ABBV at these levels it is already a sizable portion of my portfolio and I may defer to GILD instead which is offering a historically high yield these days because of depressed prices.

 

What do you think about my December stock considerations? Are you looking at any of these stocks too? Please let me know below.

 

Disclosure: Long T, MO, ABBV, GILD

32 thoughts on “December 2018 Stock Considerations

    • Hi JC,

      Looking at the comments and recent buys it seems that T, MO and ABBV are the choices many are going with. Of course, KHC and now GIS yielding over 5% look interesting too from a risk/reward scenario. I love my BDX though. It’s been with me since going the DGI route.

  1. It is hard to argue about any of these selections, and I’ve been contemplating additions to my position in both T and MO as well. The prices of both are extremely attractive right now.

    ABBV has had a little recovery in price, but with it still being close to a 5% yield it is hard not to like it. Of these four, I don’t own GILD so haven’t done much analysis on it but at a quick glance it looks pretty attractive right now too.
    DivvyDad recently posted…Recent Buy :: Target and VYMMy Profile

    • Hi DD,

      Seems like most of us in the DGI game are looking at the same cluster of names. T, MO, ABBV seem to be the front runners while KHC and GIS might entice those with more of a risk appetite. Seeing GIS yielding over 5% will definitely turn some heads. As you stated, over the long haul any of those names should do well especially from a dividend perspective.

    • Hi DD,

      My thinking exactly. T and MO are both small parts of my portfolio so adding to either is cool with me. ABBV is a little large so maybe I’d like to wait for even better pricing on that name. Thanks for commenting.

    • Hi DG,

      You share the sentiments of many who think T is way undervalued and see significant price appreciation from here. Of course, for those that are yield hungry, parking in T while waiting for the TIME Warner merger dust to settle isn’t a bad place to be.

  2. Keith, I’m not very familiar with GILD, but the other 3 names have some extremely compelling dividend yields. T and MO, do not get much love from the average investor. In fact, I remember in years past, you were not very excited about big telecom’s prospects? ABBV still has a lot of sales concentration in Humira that holds back the stock price in my opinion. ABBV and MO have had tremendous dividend growth the last couple years which is great for such high yielder’s. Tom
    Tom @ Dividends Diversify recently posted…Can You Hear Me Now? – VerizonMy Profile

    • Hi DD,

      GILD is a long time bio-tech company similar to AMGN which is one of the bigger plays in the space. When I see GILD yielding over 3% it causes me to look. You are right that I am not a big fan of the telecom space. In fact, T is a relatively new position in my portfolio considering I have been going the DGI route for ten years. There comes a point when price, value and yield look too compelling to pass up and T around $30 seems to be that price. I am comfortable owning a small part of T in my portfolio. I also think that Humira concerns for ABBV are overblown. I know many see ABBV as a one trick pony but there’s so much more to the company. No doubt we have many good high yield choices these days.

    • Hi Passivecanadianincome,

      There’s no shortage of quality dividend payers to choose from these days. Judging by the comments, it looks like T, MO and ABBV are the flavors of the day. Of course, GIS yielding over 5% might attract some buyers too.

    • Hi MDD,

      Many choices as some formerly high flying stocks have come back down to Earth and are yielding some very high percentages these days. MO looks like it’s on my short list for December and may be my last buy for the year.

    • Hi DD,

      Seems like most of us are looking at the same high yield names with T, MO, ABBV and the like making the rounds. I have seen a GIS buy as well as that stock is now yielding north of 5%. A lot of beaten down names to choose from, that’s for sure.

  3. I own MO, ABBV, and GILD, and have added to ABBV and MO in recent weeks. I like ABBV more than GILD here, but your thinking on adding to GILD given your ABBV weighting makes sense.
    I’m not a Telecom fan and thus don’t own/follow T, but the yield looks enticing and I can see why it has appeal throughout the DGI community.
    Lots of good choices you’ve lined up, DivHut… I look forward to your selection.
    Engineering Dividends recently posted…Recent Transactions (HRL, LOW, WPC, MO)My Profile

    • Hi ED,

      Like you, I have not been a telecom fan either. T is a very new position in my account considering I have been going the DGI route for about ten years. Sometimes, price, yield and dividend growth history compels one to make an investment in a sector that he is not a fan of. Looking at the numbers I feel comfortable with a small position in T for the long haul. The reality of the day is that we have many high yield choices as depressed stock prices have given rise to new investment opportunities for long term DGI holders.

    • Hi DI,

      You aren’t alone. I know many DGI portfolios that have sizable T and MO holdings. I’m still considering both names as they are still small portions of my portfolio. Look forward to seeing what you pick up in December.

    • Hi Snugfortune,

      I still like T and MO at current levels and both are still relatively small portions of my overall portfolio unlike ABBV. If I see ABBV drift towards $80 or below I’ll be compelled to add to that name. Thank you for stopping by and commenting.

  4. Hi Keith:

    I have MO on my radar for December as well. T I own and I want to expand out before added more though the price is temping. I think if T can really cut its debt like it thinks we wont see close to a 7% div for quite a while. ABBV is always on my watchlist but I hasn’t been in the buy position yet. GILD I haven’t looked into much.

    Cheers

    • Hi D4J,

      I think many are worried about T’s debt load. If they can continue to make solid progress reducing it to more acceptable levels I think you’ll see an onslaught of fresh buyers coming in to that name. MO is another beaten name with solid numbers going forward. No doubt we have many high yield choices these days to pad our passive income streams.

  5. Hey Keith,

    Two names on the list have my interest at the moment:
    Though I never picked up any shares, MO (and PM, for that matter) has interested me for its sizeable yield. However, I’ve been held out as I’ve always been concerned about the direction of the industry itself. That said, this is the reason the strong tobacco stocks have been out of favour and thus financially attractive for decades….
    Along with many other personal finance bloggers, I decided to initiate a position in ABBV over the last month on its price weakness. If the volatility provides a healthy opportunity to double down, I hope to do just that soon.

    Take care,
    Ryan
    Get Rich Brothers recently posted…Q3 2018 Dividend ReportMy Profile

    • Hi GRB,

      You have to admit that the larger tobacco companies have proven to be more than resilient over the last three or four decades. With an onslaught of bad press, health concerns, litigation and a declining customer base they have been able to maintain and grow their dividends along with share prices. There’s no doubt that the face of tobacco will look dramatically different in the coming decades as alcohol, vaping, marijuana and other unforeseen opportunities arise. I see MO and the like continuing to adapt to changing consumer tastes and trends much like MCD. Nice ABBV pick up. Been with me since the beginning (ABT spin off) and I have no plans to sell that name for the foreseeable future.

  6. Nice blog! I started a blog 6 months ago at 67 and am looking for blogs that I can learn from. I know it is hard work and often frustrating. I will give a good try even though I know I don’t have as much ‘time’.

    • Hi Trippe,

      Thank you for your kind words and congrats on starting your own blog too. The DGI community is quite open and sharing when it comes to investing ideas and topics. The reality about ‘time’ is what you make of it. With a five, ten, twenty or thirty year or more horizon everyone has the opportunity to improve themselves financially from where they are currently stranding. Sure, more time would be better but you can always move forward from your current position with careful planning.

  7. Hey there! AbbVie and Altria (now after the Cronos Buy even more) are on my list too! Above that I might buy BASF, which is probably going to drop a lot tomorrow. Best Wishes! Nils

    • Hi Nils,

      Thanks for sharing some of your considerations. MO is probably the name I’ll go with in December. Might be my final buy of the year too. We’ll see.

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