February 2019 Stock Considerations

As February knocks on our door, it is time, once again, for me to highlight my potential stock buy(s) for the month. As we all know, there are no shortages of great names to consider as many are still selling at very attractive valuations and yields.

First up, I’m thinking about buying 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 over the 7% mark. What?!? With a moderate payout ratio, MO has the cash to keep paying this juicy yield. As with T, MO is still a small, yet growing part of my overall portfolio which allows me to add to my position.

Clearly, MO has been on my mind as I made two separate buys in the stock in January. Another tobacco stock I am also considering is Philip Morris International Inc. (PM). Like MO, 2018 has not been kind to this stock but with impressive yields it’s another name that’s getting hard to ignore even though both names bounced nicely from their recent lows put in they are still attractively priced.

Finally, though the second largest holding in my portfolio, I am looking at AbbVie Inc. (ABBV) as well. January has been a tough month for the stock and it is once again trading at levels not seen since October of last year. With a sustainable yield pushing well over 5% this long time holding of mine is looking enticing as well.

So there you have it. A short and sweet list for February. Of course there are many other names I’d like to consider as well but I think I’ll remained focused on these four for now.

What do you think about my potential stock picks for the month of February? Are you looking at any of these stocks as well? Please let me know below.

Disclosure: Long T, MO, PM, ABBV

34 thoughts on “February 2019 Stock Considerations

    • Hi Passivecanadianincome,

      If you are in the DGI game you have to be considering the same names I’m listing. When yields get pushed up to these extremes you have to take notice and act. It’s not often we get these great investing opportunities but when we do it’s time to pounce.

  1. Well I picked up some MO last week and added some T today so I guess we’re in the same boat. There’s some fairly valued companies that I’m looking at too but it’s hard to pull the trigger after seeing where they were at in December. The anchoring bias is strong in this one.

    • Hi JC,

      Seems like we’re all considering the same stocks these days. MO has been my main buy last month and still under $50 is a consideration for February. I’m sure we’ll see another strong sell off in 2019 but to me it just signals a good buying opportunity even if I may buy too early.

    • Hi DD,

      I don’t like chasing high yield and never have during my tenure as a DGI but seeing T, MO, PM, ABBV and others yielding at or near record highs you have to take notice 🙂

  2. I like the whole gang:) They all have their chellenges. But historically they have also proven to be masters in overcoming them. T has increased its dividend 35 years in a row, MO (and its spinn-of PM) for 49 years. In terms of ABBV, when the history of the parent company (Abbott) is taken into account, it has raised its dividend annually for over 25 years.
    You must be damn good in overcoming challenges in order to deliver such a long track record of dividend growth.
    Snugfortune recently posted…Portfolio Update for January 2019My Profile

    • Hi Snugfortune,

      Well said. These low prices and high yields remind me of MCD a few years ago when everyone wrote them off for dead. Fast food was out, fast casual like CMG and Panera were in. But, like your comment, MCD overcame many of its challenges to deliver a long track record of dividend growth and so too ABBV, T and MO will most likely do the same. I’ll take those investing odds any time.

    • Hi DD,

      It’s a DGI dream these days with so many great high yield choices given to us. I have a feeling that any of the stocks mentioned would be good long term holds no matter what happens in the near term. Buy when others are selling.

    • Hi D4J,

      Not sure if T will hit those lows again soon but for me I like it under $30. I’m comfortable adding to my position at that level. ABBV on the other hand needs to fall a bit more. It’s already one of my largest holdings. Thanks for sharing.

  3. The last year was brutal for these stocks and they are looking really attractively priced at the moment.

    Unfortunately my portfolio is already a bit heavy on ABBV and T. Also I don’t want to buy tobacco companies even if the stock looks cheap, so I think I will have to find something else to buy in coming months.
    Dividend Deluge recently posted…Recent Buy – Canadian UtilitiesMy Profile

    • Hi DD,

      I like to buy stocks when sentiment has shifted negatively. These days there’s no shortage of high yielding stocks that people don’t like. The good news is that other names like LEG, ITW or MMM might suit you instead of the stocks I am considering. Canadian banks have been beaten up a bit too.

  4. These are all great choices and all represent some of my larger holdings right now. I added some MO in January as well, and am likely done adding unless we see the price back down in the ~$42 range. ABBV is in the same boat for me as it is my 2nd largest holding.

    With T, I am being patient and looking for a return to the ~$27-28 range to add some more but will be tempted with anything $30 and under if I am not seeing better buying opportunities elsewhere.

    Look forward to seeing what you end up adding here in February.
    DivvyDad recently posted…Fun With Charts :: Shares Required vs. Shares OwnedMy Profile

    • Hi DD,

      I share your sentiment with pricing for T. As long as it is under $30 I like it. While MO rebounded nicely from its recent low it still looks good to me under $50 and while I’d like more ABBV I would want to see much lower prices as it is already one of my largest holdings. No shortage of choices this month 🙂

  5. All four are great considerations, and all with especially nice yields. However, our family is somewhat biased towards AT&T. 🙂 We’ve owned the stock for over a decade and know we can always depend on those dividends. In fact, we love it so much we own in in three difference portfolios! 🙂

    Thanks for sharing. Best wishes. AFFJ
    A Frugal Family’s Journey recently posted…We just joined the 800K club!!My Profile

    • Hi AFFJ,

      Speaking from T experience. I like how you describe the dividend consistency and reliability of that stock. That’s probably the number one reason to pick some up at these discounted prices. Sure, the past can never predict the future but when you have a track record like T, the long term future odds are in your favor. Thanks for sharing.

  6. Hey Keith,

    Seems all of us DGIers are taking a close look at ABBV. I just added some more shares at around $80 to average my position down somewhat. Working in healthcare has given me a very bullish outlook on the pharmaceutical industry in general given the amount of unnecessary drugs being pushed on patients. I think common sense has gone out the window as people get treated with a candy dish of medications rather than being prescribed some lifestyle changes (stop smoking, get some exercise, eat less junk).

    Take care,
    Get Rich Brothers recently posted…Five Year Plan, Update #3My Profile

    • Hi GRB,

      Well said. Always nice to get an inside perspective on how the medical establishment works. I like my ABBV a lot which is why it’s one of my largest holdings. Still, I wouldn’t mind seeing it below $80 before I pull the trigger. Smaller positions in my portfolio like T and MO are my likely candidates for a February buy. As always, I appreciate your comment.

    • Hi DI,

      I think many in the DGI space are looking at those accidental high yielding companies. When stock prices tumble we get a gift. It’s been a long time since we had so many good choices among dividend stocks.

  7. Abbvie looks like an interesting one to me DivHut, definitely near the top of my shortlist. Unfortunately I’m at the polarising end of MO where I couldn’t bring myself to invest…

    Cheers, Gary

    • Hi GG,

      I like my ABBV a lot. That’s why it is one of my largest positions. With that being said I might want to invest in a smaller position which brings T or MO to mind. You are not alone with your feelings on MO. I know many take a personal stand not to invest in tobacco.

    • Hi MR,

      I realize that traditional tobacco usage is in decline. It has been going down for at least fifty years so that’s nothing new. What I do like about MO going forward is their expansion into cannabis and vaping. The dividend is still considered safe and that yield has become too large to ignore.

    • Hi Dp,

      It’s been a long time since we had so many great high yield choices for our income portfolios. Seems like many different stocks and sectors are on sale these days even after the strong January rebound. I still haven’t made my buy for February but T or MO look like the front runners.

    • Hi ED,

      No doubt there are a lot of great choices for those in the DGI game. Though I love my ABBV it is a large portion of my portfolio which is why T or MO might look more attractive to me.

    • Hi MR,

      ABBV is a large position in my portfolio too which is why I am leaning towards T or MO. Still, sometimes you’ll see an overweight holding drop to a price that’s too tempting to ignore.

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