Here we are with another installment of my “stock considerations” for the upcoming month. With the first week of trading upon us in July, it is time, once again, to lay out a plan for my potential stock pick(s) for the month. As many of you already know, I make sure to purchase at least one stock every single month no matter where we are in a business or macro economic cycle. The goal of every long term dividend growth investor is to remain consistent with their buys and try not to attempt to time the market and wait for the “best” possible time to invest. Time in the market is our single greatest asset that allows for faster compounding and “smoothing” out those inevitable peaks and valleys of stock prices we all experience in the near term. With that being said, let’s take a look at my July 2018 stock considerations.
Looking forward towards July, I’m finding that, believe it or not, I have less potential stock buys to choose from than in previous months. The quarter ended on a strong note as we have seen the health REITs bounce back from their 2018 lows, utilities and even the much maligned staples have bounced. You are all familiar with these names as Ventas, Inc. (VTR), Welltower Inc. (WELL), HCP, Inc. (HCP), LTC Properties, Inc. (LTC), Dominion Energy, Inc. (D), The Southern Company (SO), Consolidated Edison, Inc. (ED), Kimberly-Clark Corporation (KMB), PepsiCo, Inc. (PEP), The Kraft Heinz Company (KHC), The Clorox Company (CLX), Philip Morris International Inc. (PM) and more have come back in earnest. Of course, there are still a few duds out there that have been left behind this rally and are seemingly stuck in neutral or even reverse for the time being. Stocks like General Electric Company (GE), General Mills, Inc. (GIS), Johnson Controls International plc (JCI) and Cardinal Health, Inc. (CAH) come to mind right off the bat.
Barring some unforeseen market drop or other individual stock decline my list of potential buys will seem quite small for July as I will be looking to add to my Starbucks Corporation (SBUX) first. We the recent C-Suite shakeups at the company coupled with less than exciting news about upcoming store closures and a new health concern being raised about the sugar and calorie content of formerly popular Frappuccino drinks have each contributed to a perfect storm to punish the stock and give us an SBUX sporting much better prices, values and yields not to mention a more than healthy dividend growth rate too. As long as SBUX remains around $50+/- it will be my go to pick for July.
Finally, I’ll be looking to add to a couple of my health REITs that are starting to show some signs of life. These potential buys will allow me to average down my cost basis while continuing to enjoy some generous yield. It’s been a while since I added to any of my current REIT holdings and HCP, Inc. (HCP) is starting to look OK to me once again. Seeing HCP under a $30 price could potentially trigger a buy. Also, in the health REIT space I am looking to add to my Sabra Health Care REIT, Inc. (SBRA). The stock has climbed a lot from its lows of 2018 as this skilled nursing REIT play still demonstrates a difficult business environment. Of course, that generous yield, which highlights some of the risk with the stock, can justify the risk/reward scenario.
What do you think about my potential stock picks for the month of July? Are any of the names mentioned above making your buy list this month? Please let me know below.
Disclosure: Long VTR, WELL, HCP, LTC, D, SO, ED, KMB, PEP, KHC, CLX, PM, GE, GIS, JCI, CAH, SBUX, HCP, SBRA