January 2019 Stock Considerations

With a new year and a new month upon us, it is time, once again, for me to outline my potential stock picks for my dividend growth portfolio. I’ll continue to preface this post with my usual rant about how important it is to ignore all the financial panic that’s being spewed by the mainstream media. As we all know by now there is never a perfect time to invest. There will always be some political, financial, economic or social worry that indicates an imminent correction or collapse. It can be North Korea, oil prices (too low or too high, take your pick : ) ), inflation, deflation, Ukraine, Russia, market valuations, remember Ebola, global warming, freezing winter weather, South China sea, how about Somali pirates (been kind of quiet lately), Iran, Syria, ISIS, Brexit, Greece, U.S. debt, government shutdown and anything else you would like to add to this never ending and ever evolving list. Bottom line, don’t be afraid to invest in a consistent and systematic manner. Over the long haul, being invested and staying invested in the stock market gives you the best long term odds of success.

With a highly volatile ending to 2018 we have no shortage of quality dividend stocks to choose from. With that being said, let’s take a look at my January 2019 potential stock pick(s).

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 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. 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 going into 2019 it’s another name that’s getting hard to ignore.

Next, I am considering a health sector stock that has also been hammered in 2018, 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.

Finally, I’m looking at Gilead Sciences, Inc. (GILD) still. It was one of my potential picks for December and prices continued to get hammered throughout the month driving up yields to historical highs well over 3.5%.

What do you think about my potential stock buys for the month of January? Are you considering any of these names for your own portfolio in 2019? Please let me know below.

Disclosure: Long T, MO, PM, CAH, GILD

35 thoughts on “January 2019 Stock Considerations

    • Hi DutchIndependence,

      You said it… the business models are still intact and with reference to MO they are clearly trying to position themselves for the future with stakes in vaping and cannabis companies. When things get beaten down that’s usually the best time to strike.

    • Hi Snugfortune,

      There will always be a panic list during the best of times and the worst of times. Consistency with your investments cuts through the noise and allows one to invest with blinders on. T and MO seem to be the popular picks of the day. Nice to see you picking up some shares in both.

    • Hi DI,

      If things stay volatile we’ll have many potential great buys to choose from. As it is there are many great stocks on sale giving us historically high yields. Looks like January I’ll pull the trigger on T or MO. I wish I had more cash to deploy this month but that’s OK. One step at a time.

    • Hi DD,

      Those three are my front runners for January with MO or T most likely my buy as they are still both small positions in my portfolio. Many great names to choose from these days.

  1. Hut –

    Couldn’t agree more. They have juicy yields we either have never seen or haven’t seen in some time. CAH is the one that puzzles me, as they just haven’t been able to rally, at all, and their dividend appears safe as heck by the numbers, what gives?! Time to make some moves!

    -Lanny

    • Hi DD,

      Not sure what’s going on with CAH but the numbers still look good in terms of dividend safety. I think I’ll be going a more high yield route to start 2019 with T, PM or MO leading the way. Another tobacco name, BTI recently was brought to my attention. What’s your take?

  2. Definitely a lot more companies to choose from after December. Some of the companies I’m looking at are Costco, Visa, Altria, Becton/Dickinson & Company, J.M. Smucker, Blackrock and Pepsi.

    • Hi JC,

      Seems like we are all listing a who’s who of stocks to potentially buy. All solid dividend paying companies that have gone on sale in recent months and are trading at levels too juicy to ignore. I have to say that’s an impressive list you put up. Good luck in 2019!

  3. I’m a Canuck but my neighbor in Palm Springs recommended I buy Altria (Philip Morris originally) about 25 years ago. I was not keen because of its product and potential demise as smokers quit smoking … but it got to the point I couldn’t ignore it anymore so I bought it about 20 years ago planning to bail at the first hint of trouble. Well, I’ve never bailed (I’ve added) and I’ve been collecting those divi’s AND spin offs ever since! Philip Morris. Kraft. Mondelez. lol.

    • Hi CAC Wishart,

      That’s a great story and just shows that traditional thinking sometimes doesn’t make sense when it comes to stocks. After all, who would want to invest in a company with declining customers? Clearly Altria has shown that despite heavy litigation, loss of smokers, social stigma, high tax on products and more it has been able to grow and diversify its business. Like you, I also enjoy those spin offs and dividends they each send my way.

    • Hi DP,

      Can’t forget those Canadian banks. TD and BNS both are looking appealing in recent weeks but I’m already pretty full in that space which is why tobacco is calling me the most. We’ll see where my first 2019 buy will go.

  4. Nice selection for sure, and a few that I am contemplating as well. I’m being patient on T as I would really like to add more in the $25-26 range, but I do like it anywhere sub-$30 really. I don’t own PM as of now, but was giving that some thought to go with my MO.

    Look forward to seeing what you end up adding to the portfolio!
    DivvyDad recently posted…Recent Buy :: Kellogg CompanyMy Profile

    • Hi DD,

      PM and MO seem to complement one another in many DGI portfolios. I went with PM many years ago and only recently added MO into the mix. BTI is another tobacco name that is looking interesting these days. It’s amazing how in the last three or four months so many traditional dividend stocks have gone on “sale.”

    • Hi dividendgeek,

      Both T and MO are small positions in my portfolio. I don’t plan to make either huge but in the meantime both seem to offer some compelling yield to buy. No shortage of stocks to choose from these days, that’s for sure.

  5. Hut – I like your watch list. I nibbled and added a little to my CAH position. Sure, things are down right now, but the fact that they increased their dividend despite their slump leaves me a little more confident than if they would have just maintained it. I didn’t throw a lot of cash at it, but picked up an extra 13 shares. Happy shopping in 2019 and Happy New Year!

    Bert

    • Hi DD,

      No doubt 2018 was a tough year for CAH but the dividend still appears to be quite safe going into 2019. I might be looking at some of my smaller positions this month which puts MO and T in the front running. BTI was recently called to my attention and it’s looking like another high yielding stock that will be tough to ignore. What do you think about it?

    • Hi Passivecanadianincome,

      Seems like people love or hate T. Lovers enjoy the outsize yield, still safe dividend and potential capital appreciation while haters note that huge debt load which could be a serious problem down the road if not reduced. No doubt, many other high yield choices to pick from.

  6. Some nice stocks for consideration, DivHut. I’ve added to GILD and MO in the last month, but decided to trim some of my CAH after a couple of disappointing years. I used some of the proceeds to initiate a position in MMM.
    I’m sure you’ll make a terrific selection for your next purchase whether it turns out to be one of the stocks you highlighted, or another.
    Here’s to another terrific year of DGI in 2019.
    Engineering Dividends recently posted…Recent Transactions (HBI, MMM, CAH, JPM, MO, CMCSA)My Profile

    • Hi ED,

      I can understand you wanting to trim your CAH. It has not been a hot stock especially in 2018. I’m still keeping all mine for now. The dividend is still safe and is trading at a historically high yield which is why I’m still looking. Of course, moving that cash to MMM seems like a solid move. Tobacco is looking way out of favor again. PM, MO and newcomer for me BTI is interesting. Sometimes a stock drops so low you can’t ignore it anymore.

  7. Hey Keith,

    I like the rant; worth keeping in there as a reminder for these articles. As you mention, there’s never a shortage of issues to focus on if someone is so inclined and looking for a reason not to invest (I’m not sure why anyone would, but they seem to). I have an Andex Chart on my wall beside my PC which is amazing and shows so many data points and facts going back to 1950. It’s great for perspective.

    In terms of the stocks on your list, CAH is one I have earmarked to at some point take a much closer look. I work at a hospital and I always see their truck dropping off medical supplies. Makes me want to own a piece.

    All the best in the New Year, brother.

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

    • Hi GRB,

      Sometimes it seems like the scary headlines will never stop. I know they won’t as media sensationalism really helps with ratings and dollars. It’s important to keep things in perspective as really there is nothing new under the sun. These problems have been with us for decades in some form. Nice to see you have an “inside” look into CAH and part of the supply chain. It’s had a tough 2018 to say the least and still looks like an attractive buy with a sustainable dividend based on current metrics. No shortage of great names to pick these days.

  8. Hey Keith
    First of all, I wish you and your family a Happy New Year!
    I like your stock watchlist, particularly the „high yielders“ AT&T and the two tobacco companies MO and PM. That‘s really a sector where sentiment is quite overly pessimistic in my view. I wonder wether you have had a look at their peers British American Tobacco and Imperial Brands?
    Cheers
    Financial Shaper

    • Hi FS,

      Thank you for the well wishes. I hope you had a great 2018 and look forward to a strong 2019! No doubt we have many high yield choices to sift through these days. It’s funny you mention BTI as I was looking at them over the weekend. I know the menthol scare really dragged down that stock but the numbers look a little too tempting to ignore. I wasn’t planning on buying two stocks this month but now I might.

  9. Solid list of value dividend stocks! AT&T is a solid company and I bought in on December 27th for $27.35 per share. I locked in over a 7.4% yield and plan on holding for over a decade. I’ll collect a healthy dividend while holding tight 🙂 Keep up the good research.

    • Hi BK,

      Well done. That was a super yield to lock in with T. Like you, I don’t mind waiting for a stock to rebound as long as it continues to pay me a strong dividend. I know many cite T’s debt load as a major drag but it seems like the company will be able to get a handle on it in the coming years and bring it towards a more acceptable level.

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