March 2018 Stock Considerations

A few days into the month of March it is time, once again, to outline my potential stock picks for the month. After many, many months of a market that was on a never ending melt up run, we have been suddenly reacquainted with the notion of volatility. By any measure, the stock market has been an exciting place to be in February as we witnessed wild moves in many of the averages as well as individual stocks. Of course, volatility isn’t something that should be feared. It’s a normal part of being invested in the stock market and if nothing else, it provides us opportunities to jump aboard certain stocks at much better prices, values and yields… a dream for long term dividend growth investors. With that being said, let’s take a look at the stocks that I’m considering for the month of March.

 

First up, I’m looking at the utility sector and possibly adding to The Southern Company (SO). It’s no surprise that the utilities have been hammered as of late because of rising interest rate fears. Another name in the space I’m looking at is Dominion Energy, Inc. (D). Both are sporting juicy yields and are trading near their 52 week low which simply highlights how much the sector is out of favor.

 

Another out of favor sector is the REITs. In fact, my last several purchases have been in the space as I added to my Ventas, Inc. (VTR), LTC Properties, Inc. (LTC) and Welltower Inc. (WELL) the last couple of months. As with utilities, rising interest rates coupled with D.C. policy uncertainty has created a perfect storm dragging down every name in the space. With my entire IRA swimming in a sea of red I must consider adding more and take this opportunity to average down a bit on some of my REIT positions.

 

Finally, I’m looking at some out of favor consumer staples. Names that I know are not too popular among many in the DGI community but stocks that I’m nevertheless still considering for a March buy. Those names include General Mills, Inc. (GIS) and Hormel Foods Corporation (HRL). While traditionally, these stocks have been dividend growth darlings, they have stumbled as of late sporting much lower growth rates. Still, their dividends are well covered and both are sporting higher historical yields. To me, I see both stocks facing near term headwinds as many of their products are seemingly out of touch with today’s consumer taste but I feel that is slowly changing as both GIS and HRL are moving towards fresh and organic products.

 

What do you think about my stock considerations for the month of March? Are any of these names on your watch list too? Please let me know below.

 

Disclosure: Long SO, D, VTR, LTC, WELL, GIS, HRL

46 thoughts on “March 2018 Stock Considerations

    • Hi catfishwizard,

      Seeing HRL yielding over 2% is historically high for that stock. HRL and GIS are two staples that are definitely unloved these days. Seems like most of us are looking at those names in the space. Thank you for commenting.

    • Hi Stockles,

      OHI has been a controversial name as of late. While I don’t hold it I have been reading many positive and negative reviews on that stock. No doubt the entire health REIT space has been under fire as of late. I like D, HRL and KMB too for that matter. Not a bad swap. As always, I appreciate your comment.

  1. Always nice to have a few ‘out of favour’ businesses to keep an eye on! How do you ultimately decide what to pull the trigger on? Is it a matter of which ones fall further and seem to offer even better value during the month? Or would you potentially buy all if you have the funds?

    • Hi FFF,

      In general, I like to look at beaten down stocks and sectors first when deciding where to make my buy. Also, if I have an opportunity to average down my buy price that will factor into my decision as well. Of course, looking at dividend sustainability matters too and for now, my March considerations all appear to be safe based on current cash flow. I never time my buys either. I make consistent monthly purchases no matter where we are in an economic cycle. Thank you for stopping by and commenting.

  2. Hey DH,

    that are some solid names on your list. I own shares of Southern, but i can’t convince myself to add to the position right now. What do you think of their problems with the nuclear and coal project?

    I like the REITs you mentioned. Welltower looks cheap right now. I think there won’t be much growth in the short term (earnings and dividends), but it seems like WELL is able to cover the dividend and with a yield of about 6,6% they provide a solid income stream. Maybe i’ll add during spring/summer, we’ll see.

    Greet’s
    DividendSolutions

    • Hi DS,

      I think the SO problems are overblown. I would feel safe adding to my current position and for now, SO and D are my front runners for a potential March pick up. I like the health REITs too but my last three buys have been in the space and I may want to change up my buying a bit. Thank you for sharing your thoughts.

  3. Hi Keith, I think you have intelligently identified 3 sectors that have been left out of the bull run and offer value on a relative basis. I am lightest in the food area, so I am thinking about initiating a position in HRL. Tom
    Tom @ Dividends Diversify recently posted…FIRO and YouMy Profile

    • Hi DD,

      It’s a market of individual stocks which we tend to forget sometimes as we focus on DOW and S&P numbers the most. The averages may be going ever higher but not every stock or sector for that matter is participating in the bull run. No doubt there are many great buys available in unloved sectors these days. Thanks for sharing your potential buy.

  4. All solid choices Keith. I’d really like to add some utilities to my portfolio, but we’re really strapped for cash within the portfolio. Hopefully by the end of March and all of it’s dividends I can squeeze in a small buy. Also, I finally added a really small starter position in one of the popular dividend growth companies that always seemed to avoid my portfolio for some reason. Just glanced through your portfolio and I have to say I’m a bit surprised to not find it among your holdings, although you do own its international sister. With volatility back en vogue I’m glad to start seeing a lot more value opportunities opening up.
    JC recently posted…One Raise at a Time | More Dividends From CanadaMy Profile

    • Hi JC,

      Volatility in 2018 has been quite high which is simply creating some good buying opportunities in many individual stocks and whole sectors too. I will most likely be making a utility buy in March as my last three buys have been in the health REIT space and I might want to “spread my bets” more evenly. Curious to know what play you are considering for your next buy. As always, I appreciate your comment.

    • Hi BD,

      Keep buying that pepperoni 🙂 HRL has such a great track record of dividend payouts and raises through many different economic climates. No doubt the company is facing some near term headwinds but longer term I think they’ll be just fine. Many good potential buying choices for the month of March. Thank you for stopping by and commenting.

    • Hi DG,

      No doubt Mr. Market is giving us some great buying opportunities in certain stocks and whole sectors too. As my last three buys have been in the health REIT space I might look into the utilities for the month of March. Thank you for commenting.

    • Hi p2035,

      Seems like many are liking GIS and HRL these days. When solid companies/stocks are out of favor it can be a good time to add to a position. I know those two names are my favorite picks from the staples these days. Thank you for stopping by and commenting.

    • Hi Passivecanadianincome,

      Looks like I’ll buy into the utility space this month. My last three buys have been in the health REIT sector and I might look to diversify into other spaces. For now, SO and D are my top picks it seems but you know how Mr. Market is. Things can change on a dime. As always, I appreciate your comment.

  5. Those are all great consideration. I’m not sure how to community sees this volatility, but I’m loving it! Some of the companies I’ve considered buying as run up quite a bit, and I’m glad to see it down. Buy companies and hold for the long run. Not sure where this economic climate is going with the current administration, but one thing for sure is people will need the basics necessity, and those company you highlight offer than.
    Food, Shelter, Energy.
    Bring on the bear market!!!!

    • Hi Microdividends,

      You know what they say about volatility… it creates opportunities. I’m comfortable with it as it enables me to average down certain positions and build up my passive income stream as stocks go on sale. Even though the market is continuing to melt up and make record runs, there are many stocks, if not whole sectors, that are on sale. Like you, I like to focus on stocks that offer basic necessities as those companies are always in demand more or less. Thank you for sharing your thoughts.

    • Hi DC,

      Not a bad way to pick up some shares on sale. Keep buying those dips in any company you like long term. Usually when others are selling is a good time to build up a position. Both GIS and HRL have seen better days which is why they are my March considerations among other names. Thank you for stopping by and commenting.

    • Hi dividendgeek,

      Thanks for sharing your recent pick up. Never looked into FTC though I’m not really into ETFs for my own DGI portfolio. PEP was a new addition to baby DivHut’s portfolio. As always, thanks for sharing your thoughts.

    • Hi DD,

      Seems like most of us are looking at the same names whether in the REIT space or utilities. For the staples all I read is HRL or GIS. A lot of great names that are unloved these days for sure. As always, I appreciate your comment.

    • Hi MR,

      Curious to see where you pull the trigger. For my portfolio it will probably come down to SO or D. We’ll see. Utilities and REITs and definitely unloved these days. Thank you for stopping by and commenting.

    • Hi DP,

      My last several buys have been in the health REIT space and I still like many names in the sector this month though I may want to diversify into another sector in March. We’ll see. LTC has been a pretty good good hold for me thus far though it’s in the red these days as all my REIT holdings have been beaten down in 2018. Thank you for commenting.

    • Hi DGI,

      2018 has been a rough start for whole sectors like REITs and utilities which is where I’m most likely looking this month. SO is a popular dividend growth stock seen in many portfolios online. I have held that stock for about ten years and while the dividend growth rate is low it’s tempered with an above average current yield. It’s definitely a stock worth looking into some more. Than you for stopping by and sharing your thoughts.

  6. I currently own 5 of the names on that list in my portfolio. Recently just picked up SO and got my first dividend payment from them. I would love to add to D but capital is limited. GIS has been beaten down a lot I see as well. Debating lowering my cost basis on it, but I am hesitant after the announcement of them getting their credit rating lowered. Long term I still see them as a good long term hold though so I’ll hold for now. Still a lot of other value in the market currently.

    • Hi DD,

      No doubt we have many choices these days for our fresh capital. Though the market continues its melt up many stocks and whole sectors remain beaten down in 2018. REITs and utilities come to mind and a few staples too. My last several buys have been in the health REIT space so I may look into the utilities this month. We’ll see. As always, I appreciate your comment.

    • Hi DFG,

      I have been in the “red” position before and will simply hold for now, reinvest and may buy more as I have been doing in the past. No doubt we have a lot of different choices these days for new money. As always, I appreciate your comment.

    • Hi timeinthemarket,

      I have looked at other REITs like AVB, ESS, MAA, EQR and APTS too but never pulled the trigger on any. For now my focus is on the health REITs which are all in the red these days. In the meantime, I’ll hold, reinvest and may buy more to average down on some positions. 2018 has been a tough year thus far for the sector. Thank you for sharing your thoughts.

  7. Divhut,

    I’m not surprised that you have some REITs and utility companies on your listing. I’ve been hot on the trail of REITS too. HRL is an interesting choice on your list. I know Lanny jumped all over them last year and I was bummed that I didn’t purchase. I didn’t realize the company is down 7% year to date. Hmm, interesting investment choice.

    Bert
    Dividend Diplomats recently posted…Lanny’s Recent Stock Purchase – Dominion Energy (D)My Profile

    • Hi DD,

      Still not too late to jump on HRL. Other staples like GIS are also performing sub par. Of course, when it comes to sub par performance it’s hard not to consider the the REITs or utilities. My health REITs are all in the red but I’m simply holding on, reinvesting and even adding to those positions from time to time. Still haven’t made my March buy(s) but it will come. Thank you for commenting.

    • Hi TDK,

      It’s amazing to see how many good buying opportunities there are even with the market continuing its slow record breaking climb. Still haven’t made my March buy(s) but it will come. Thank you for sharing your thoughts.

  8. I’ve had my eye out for a consumer staple company to add to my growing RRSP for some time and had eyed General Mills. I decided to take a small nibble today amongst the hurt they took for their results. It was my 16th stock and first in this category. I may add to it depending on news and price in the future once funds avail themselves.

    • Hi Ashley,

      Congrats on your newest pick up. I favor the consumer staples the most. I like its defensive nature and for the most part it seems that stocks in that space rarely go on sale as they trade at high multiples relative to other sectors but I guess you pay for that security. GIS, among many other stocks these days, is hurting quite a bit. If you can stomach the near term headwinds it seems like GIS could be a good long term hold. Happy to be a fellow shareholder.

Leave a Comment

CommentLuv badge