February 2024 Stock Considerations

With February well underway, it is time to highlight some of my potential stock buys for the month. As usual, it is more of the same as I look to average down on some of my positions that have faltered as of late. One of my investing strategies has always been to be able to average down on my holdings when I can. The way I figure it, I already like a position enough to have it in my portfolio and if nothing materially has changed with the company then why not add a bit more when prices are down. Sometimes chasing losers works out over the long haul but in other cases loser stocks stay loser stocks. I guess that’s why we put our eggs in different baskets. In any case here are some of my potential stock buys for February.

First up, my potential buy for the month is Altria Group, Inc. (MO). I know this company suffers from declining smoke volumes and is under constant legal pressure and stumbled a bit when it came to vaping and marijuana offerings yet continues to pay out an ever increasing dividend for multiple decades without flinching. The company continues to diversify in non-combustible businesses as well as boosting its alcohol portfolio investment. I’m not expecting much of a share price increase from this name but at current levels the yield is hard to pass up. Trading with a forward PE around 8 and yield getting close to 10% and moderate payout ratio of 84% the dividend still appears to be safe. These numbers haven’t changed much since last month even as stock prices dropped a bit from January.

Next, I’m taking a look at Leggett & Platt, Incorporated (LEG). This stock had a rough 2023 and start to 2024 is now sporting a yield getting close to 8% as a result of share price decline. With an excessively high current payout ratio the dividend appears to be on shaky ground going forward and it is very clear that it is not recession and inflation resistant. Earnings have suffered in 2023 but it may be a good time to nibble on some shares while things look less certain and the stock is out of favor.

Finally, I’m looking at, once again, another beaten down name from last year, UGI Corporation (UGI). This natural gas energy play is still trying to work through its Amerigas propane business acquisition which is dragging down the overall performance of UGI. To me, the company seems fairly valued at current prices and is sporting a nice yield because of its 2023 share price decline. Nibbling here and there makes sense to me at current levels enjoying some 6%+ yield while you wait for prices to recover.

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

Disclosure: Long MO, LEG, UGI

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