A new month is upon us which means it’s time to take a look at the market in general, our portfolios and cash on hand to invest and make our September stock selection(s). August was an interesting month for me in terms of my stock picks as it was the first time in about seven years that I initiated new positions in my stock portfolio. Those new positions included, The Bank of Nova Scotia (BNS), The Toronto-Dominion Bank (TD) and Royal Bank of Canada (RY). Three large Canadian banks that have very long dividend histories, attractive yield and in my opinion a solid financial footing relative to most American banks.
For the regular followers of DivHut you have seen me add, almost exclusively, financial sector stocks to my portfolio for the last several months. Popular names in the space included AFLAC Inc. (AFL), The Chubb Corporation (CB) and Wells Fargo & Company (WFC). It’s no surprise that I find the financial sector to be one of the best in terms of relative value in the stock market today. We all know how expensive most stocks are relative to historical averages but this is the hand Mr. Market has dealt and we must continue to search for “relative” bargains each month. That being said, my September stock considerations are going to mostly be in the financial sector.
As in previous months I might add to my existing shares of TD, BNS, RY, AFL, CB and WFC. Some new financial stocks I am considering are Bank of Montreal (BMO) with a current yield of 3.90% and Canadian Imperial Bank of Commerce (CM) with a current yield of 4.00%. Ever since my article titled, “Canadian Century Club Dividend Stocks” was penned I have been very turned on to the large Canadian banks.
Staying with the financial sector I am also considering for my ROTH account a new position in the following health care REIT stocks.
I am considering HCP, Inc. (HCP) with a juicy yield of 5.20%, Ventas, Inc. (VTR) with a yield of 4.50%, Omega Healthcare Investors Inc. (OHI) with its high yield of 5.60%, LTC Properties Inc. (LTC) yielding 5.30% and National Health Investors Inc. (NHI) yielding 5.10%. Clearly, the attractiveness of these REITs are twofold, high current yield and potential growth in an investment theme that suggests a larger elderly population in the U.S. in the coming decades. I realize that these names may not be the most aggressive dividend growers but they all do offer very high current yields with a high potential for capital appreciation.
To be honest, I would love to potentially add some stocks outside the financial sector as well but I’ll have to see how my investment funds will play out for the month. Looking outside the financial sector some names that are popping up on my radar include, McDonald’s Corp. (NYSE: MCD) with its nice yield of 3.40% and more attractive share price compared to previous months, General Mills, Inc. (NYSE: GIS) with its yield of 3.20%, Kraft Foods Group, Inc. (NasdaqGS: KRFT) yielding 3.80%, General Electric Company (NYSE: GE) yielding 3.50% and potential new position Unilever plc (UL) yielding 3.50%.
I realize that my shopping list is quite long this month and as the saying goes, so many great dividend paying companies to invest in, so little capital. Of course, these are just investment ideas as Mr. Market has a way of sometimes making an investment decision for you in a stock you might not have otherwise considered. Regarding my portfolio allocation I am still on the lighter side with regard to financial stocks and quite heavy in the consumer space. That fact alone might greatly influence my September buying decision as I look to balance my portfolio a bit with greater financial exposure.
What stocks are on your shopping list for September? Are any of the names I am considering on your list as well? Please let me know below.
Disclosure: Long AFL, CB, WFC, TD, BNS, RY, MCD, GIS, KRFT, GE