July 2018 Stock Considerations

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

30 thoughts on “July 2018 Stock Considerations

    • Hi DD,

      Interesting that SBUX is not on your short term buy list. All good. There are many choices out there offering us good values and yields.

    • Hi Doug,

      It’s not often we see SBUX offering us such a juicy yield. I’m happy to take advantage of any stock the caliber of SBUX when it dips.

    • Hi DI,

      I happen to agree with your assessment of SBUX. I’m sure over time their dividend growth rates will decline but it looks like it is a company that’s headed towards aristocrat status.

    • Hi DG,

      Indeed! Haven’t seen a yield this nice for SBUX in a long time not to mention their aggressive dividend growth rates. Seems to be the pick of the day.

    • Hi EL,

      For now I don’t see the REIT business model going away any time soon. Of course, they can stumble like any stock or sector but over the long haul I think they can continue to provide good returns and income too. Interesting to see what new stock you’ll add to your portfolio.

  1. I bought into SBUX a little early, but may add a touch more to round out my weighting there. I am also contemplating JNJ for much the same reason and the price is still being held in the $121-123 range, which would lower my cost basis a little.

    My focus is on REITs though, as my pension transfer should complete so I will have a chunk to invest there and plan to do so primarily with REITs as that will be in an IRA. Some that I am liking include IRM, SBRA, ABR, O, MAIN, and EPR.

    • Hi DD,

      It’s always tough to time any buy perfectly. I think if you have a long term horizon for your SBUX hold you should be OK. JNJ was looking nice too as it approached $120. Seems like many stocks are bouncing off their recent lows as of late but still present us with some good buying opportunities. You bring up some solid REIT names too by the way which have also bounced from their 2018 lows. Still six months to go in 2018 and with all the ups and downs the market seems pretty strong in general.

      • You’re right, and with that long-term horizon the little difference in entry point won’t be the end of the world. At one time I used to worry about squeezing every penny out of a trade, and as a result missed some buys where my limit wasn’t met over a couple of pennies.

        The wait on this pension rollover has been painful as I want to get that money into the market. Appreciate the feedback on the REITs that I mentioned.

    • Hi Passivecanadianincome,

      There’s no denying the recent SBUX stumble which has given rise to a pretty nice yield along with better pricing and value. It’s still a dividend growth machine with no seeming end to their robust raises. I’m liking it this month.

  2. Hi I went with PG but JNJ was on my mind. Also LEG GPC and SON is on my radar. Maybe CSCO and ABBV but their price gone up a lot latlly so waiting for som correction there 🙂

    • Hi P2035,

      Clearly there are many good options to choose from this month. I like your PG and JNJ call. Both have struggled in recent weeks but still look attractive despite a recent bounce. Thanks for sharing your picks.

    • Hi Nathan,

      Every now and then it’s time for an online makeover of sorts. Glad you like the new DivHut. I’m still focused on DGI and plan to keep making my monthly stock buys and I also am holding on to all my crypto as well. No bear market is going to shake me out of my crypto holdings.

    • Hi DS,

      Seems like many are going with SBUX after their recent stumble. Looks like a good time to pick up some shares on sale. We’ll see if that’s where I go in July.

    • Hi dividendgeek,

      SBUX is my go to stock for July. Still early in the month and I have not made any buys yet but it looks like SBUX will be my investment choice unless some new company comes out of left field offering a better opportunity. REITs still look relatively cheap though they have roared back from their 2018 lows. Definitely still a lot of choices out there.

  3. I think SBUX is definitely a buy with this price level. There’s obviously some stuff going on as the CFO just left. But imho they will straighten things out sooner or later.

    I didn’t consider HCP as I have two full positions in OHI and VTR at the moment. But I still love REITs at these prices. I’ll look into HCP. Thanks for the blog post! 👍

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