June 2016 Stock Considerations

As May draws to a close it’s time, once again, to lay out my potential stock picks for the new month. As everyone is already well aware, finding those great values and good yield plays are becoming more scarce and I can honestly say that if the market remains at current levels I am out of ideas for where I’d like to deploy my fresh capital. Of course, this doesn’t mean I won’t be making a buy in June. To the contrary, I plan to make at least one buy each month no matter where the market or individual stocks are. It’s been my mantra to always put money to work each month as I do not pretend to be a market timer and guess when the absolute “best” time to invest is. As a dividend growth investor, the best time to put money to work is right away as it enables the compounding of returns to accumulate.

 

Looking ahead towards June, I find every holding in my taxable account in the black, which is nice, but given the choice of where I’d like to invest my fresh capital I usually opt to find holdings that are in the red in order to average down my purchase price. It’s not a rule I have, rather a preference. That leaves me with my ROTH account and a large holding in The Bank of Nova Scotia (BNS) and Caterpillar Inc. (CAT), my recent May stock purchase that I would consider for June. Looking at my IRA account I would also consider adding to my HCP, Inc. (HCP) and average down my purchase price there.

 

So where does that leave me for the month of June? Either pick up some shares in positions that are already growing quite large relative to my other holdings or look elsewhere and build up some of my smaller positions to help even out my dividend income stream. Some of those smaller holdings I’d consider adding to include, W.W. Grainger, Inc. (GWW), Wells Fargo & Company (WFC), V.F. Corporation (VFC) and Abbott Laboratories (ABT).

 

That being said, this post is contingent on the market remaining around these levels or higher. Of course, if we start to see a noticeable drop in the major averages and individual stocks I have a feeling my choices of where to deploy my fresh capital will become clearer.

 

What do you think about my potential stock picks for June? Are any of the above names on your monthly watch list? Please let me know below and I welcome any suggestions too.

 

Disclosure: Long BNS, CAT, HCP, GWW, WFC, VFC, ABT

45 thoughts on “June 2016 Stock Considerations

    • Hi Sami,

      Over time, holding quality companies through good and bad times often yields good results. The issue is to not panic when markets turn south. Nothing wrong with owning an index or two. I think they have a place in any long term portfolio. Thank you for commenting.

  1. Hey DivHut,

    The market appears to be at a high level, compared to January 2016.
    I still think it’s better to invest, rather than to wait!

    My shortlist for the month is: F, INTC, GPS, SBUX, HCP, BNS, VFC, GILD, DIS & VZ, amongst others.
    It’s a rather long list, because I have more fresh capital available than usual.

    Good luck with your choice!

    Best wishes, DfS
    Dividend for Starters recently posted…Dividend income & raises, April 2016My Profile

    • Hi DfS,

      I’m with you on investing instead of waiting which is why I still have been making at least one monthly buy the last several months. Nice to see we have some names in common for potential buys. As you know I already like BNS, HCP, VFC a lot and have GILD on my watch list along with SBUX. We’ll see how June plays out in the next week or two. No matter what happens, I’ll still make a buy. Thank you for sharing your picks.

  2. I have been adding to our position in Wells Fargo (WFC) and investing heavily in Berkshire Hathaway (BRKB), in the next sizable sell off. Those are near the top of my wish list, and we should get the opportunity soon. I hope you have a great week with the family!
    -Bryan
    Income Surfer recently posted…Our $500 ClubMy Profile

    • Hi IS,

      As I mentioned, WFC is on my list. Nice to see you have it on your list too. It’s still a small part of my overall financial holdings as my Canadian banks and AFL have grown large over the years. Look like you are one of the few that buy into BRK. I know it has a great track record and amazing growth but nothing on the income front and that’s what I’m looking for exclusively. Thank you for stopping by and commenting.

    • Hi Tawcan,

      Thank you for sharing your thoughts about some potential picks for June. I see you still like the Canadian banks even though they all had a pretty nice run the last few months. As I mentioned in the post, this really is the first time in a long, long time where I don’t have a clear choice of where to deploy my fresh capital. Of course, I always love to read the opinions of my fellow DGI bloggers. Thank you for commenting.

    • Hi IH,

      I appreciate your opinion. Nice to see that two of my considerations interest you as well. It seems that a few of our fellow dividend bloggers having been buying both of those names as of late. Curious to see how June unfolds in the next few days. It seems like the market rises and falls on seeming whims and that a simple “cough,” “sneeze,” or “hiccup” can unravel all the gains made since March. As always, I appreciate your comment.

    • Hi DG,

      I would like to add to my BNS too but I’m thinking it may be getting a bit too large relative to my other holdings. Health stocks have a nice ring to them always, especially for a long term investor. The problem is waiting for those “sales” that seem to be far and few between. Thank you for stopping by and commenting.

    • Hi BSR,

      Your point about BNS is why it’s still a consideration of mine. It has been lagging my TD and RY performance and still looks enticing to me with that current juicy yield and moderate payout ratio. GILD looks interesting too. It’s on my watch list along with AMGN in the biotech space. The only two that I’d consider for my portfolio. Thank you for sharing your thoughts.

  3. Not a name on that list I don’t like Divhut. Don’t think you could go wrong buying any of those Aristocrats. HCP is appealing to me as well right now; however, you still have plenty of time since we just received the second quarter dividend. Right now, my watch list consists of a few smaller community banks, TGT, and UPS based on the results of Lanny’s analysis and their partnership with Amazon.

    Best of luck hunting down stocks in June!

    Bert
    Dividend Diplomats recently posted…Lanny’s May Dividend Income SummaryMy Profile

    • Hi DD,

      With this post it felt like I was reaching a bit to make my June buy(s). Usually, it’s quite clear where my fresh capital will go but with the market near all time highs, volatility whipsawing the market every which way, things become a little more clouded. I guess it really doesn’t matter long term as long as I stick with solid companies paying a sustainable and growing dividend. I’m still not a fan of TGT though many of our fellow DGI bloggers are, and for the banks, as you already know, I like the large money center type. Thank you for sharing your opinion and providing some alternates to my “usual” picks.

    • Hi DB,

      It’s no secret that I am a fan of BNS and other large Canadian banks too. My only concern is the relative large size of my BNS position as I think it may be time to focus on some of my smaller holdings and add to those names instead. I think we are all waiting for a nice pullback in the market to pick up some other solid names at better prices. Thank you for commenting.

    • Hi CFD,

      You are definitely not alone worrying about where the market may head in the near term as many of our fellow dividend bloggers, myself included, have really put the brakes on their buys and/or are hoarding cash. While I won’t stop my buying on a monthly basis I do have in the back of my head about where stocks might head in the near term and it does scare me a bit as well. Nevertheless, it won’t stop me from adding to my positions. Thank you for sharing your thoughts. It will be interesting to see how June unfolds.

    • Hi FV,

      It’s nice to see others still interested in HCP. It’s really been beaten up quite a bit in recent months and I think interest in this stock presents a good risk/reward profile. Thank you for sharing your take.

    • Hi Dividendsdownunder,

      The ebbs and flows of the market. One day we’re talking about a correction, the next we’re talking all time highs. The bottom line, if things remain high, I’ll still make a purchase or two but they’ll be on the smaller side. As always, I appreciate your comment.

    • Hi Tristan,

      When I go to your site dividendsdownunder by browser warns me that your site has not been configured correctly and that it is an insecure site. I’d love to see what you are doing downunder. Any suggestions?

      Zaan

    • Hi TMB,

      The health sector will see long term tailwinds for many years to come. We just have to wait for those near term headwinds to pull the trigger and make our buys. HCP is not a well liked as the other health REITs at the moment which may present a higher risk, higher reward compared to other names out there. At least, for now, you are being rewarded with a generous current yield. Thank you for stopping by and commenting.

  4. Its becoming difficult to buy quality stocks, but i think i have some space for WFC and ABT in my account for this month.CAT is already at full position in my account.I would like to add DIS,if its in reasonable price and SBUX.

    • Hi desidividend,

      I appreciate your opinion on this matter. Like you, my CAT is already quite large between my taxable and ROTH account holdings which is why I’m considering WFC and ABT as they are still smaller holdings of mine. It’s important to make sure that your dividend income stream isn’t reliant on just a handful of stocks. Thank you for commenting.

    • Hi Dividendpursuit,

      Going into June I really had no clear direction for my fresh capital but it’s nice to read the various opinions of our fellow bloggers and see that many agree with my potential picks. I guess as long as I pick a solid company that’s not stretching their dividend payments too much I should be safe long term. While I like CAT a lot too, I’m not crazy about their relatively high payout ratio. Thank you for sharing your opinion.

    • Hi ACI,

      VFC has been one of my best long term performers. It seems to get a lot of attention under $60. While a tad expensive relative to historical PEs it’s still such a solid name long term. I had a very relaxing weekend last week. Thanks for asking. Sometimes it’s nice to unwind and just be with the family without having to “be somewhere” like during a typical midweek. Enjoy the up coming weekend. Thanks for commenting.

  5. WFC is a holding that I really need to get to. For the American banks, I generally like the smaller regionals such as VLY and NYCB (and MTB, though sometimes it seems to be regarded as one of the big banks), with WFC being the exception. The Canadian banks look better as a whole, but with all the talk about an impending housing bubble burst, I’m putting them on the back burner for the time being. I hate to try to time the market, but I figure the recovery period will be long enough that I can grab a few shares of BNS or TD at a discount.

    Sincerely,
    ARB–Angry Retail Banker
    ARB recently posted…Dealing With The Google Law ProfessorsMy Profile

    • Hi ARB,

      Not that it won’t happen one day, but I have been reading about a Canadian housing bubble for at least two years and from what I can see it was the oil bust that put a damper on the Canadian banks more than anything else. Like you, I continue to like the Canadian banks a lot but feel it might be wise to increase my smaller positions and diversify my dividend income stream a bit more than become too reliant on just a handful of stocks. Have you ever considered USB on the U.S. side? Besides WFC, USB is the only other American bank I’d consider for my long term portfolio. As always, I appreciate your comment.

  6. I currently hold a few hundred shares of BAC. I am wondering what your thoughts are about selling it and buying both WFC & C it will double the dividend income I am currently receiving from BAC

    • Hi Wayne,

      While I do not give out any formal advice on this blog as I’m not a registered investment adviser nor investment professional I can tell you that I only like two American banks for my portfolio, WFC and USB. To be honest, I never looked at BAC in earnest and couldn’t even offer an informed opinion on whether you should keep the stock or sell it. I have no idea about your cost per share, length of holding, etc. While it’s always enticing to want to sell a stock to boost income as you chase higher yield, in general it’s not always advisable as a sole criteria to sell. Thank you for your question.

Leave a Comment

CommentLuv badge