January 2018 Stock Considerations

With a new year and a new month upon us, it is time, once again, for me to outline my potential stock picks for my dividend growth portfolio. I’ll continue to preface this post with my usual rant about how important it is to ignore all the financial panic that’s being spewed by the mainstream media. As we all know by now there is never a perfect time to invest. There will always be some political, financial, economic or social worry that indicates an imminent correction or collapse. It can be North Korea, oil prices (too low or too high, take your pick : ) ), inflation, deflation, Ukraine, Russia, market valuations, remember Ebola, global warming, freezing winter weather, South China sea, how about Somali pirates (been kind of quiet lately), Iran, Syria, ISIS, Brexit, Greece, U.S. debt, government shutdown and anything else you would like to add to this never ending and ever evolving list. Bottom line, don’t be afraid to invest in a consistent and systematic manner. Over the long haul, being invested and staying invested in the stock market gives you the best long term odds of success. With that being said, let’s take a look at my January 2018 potential stock pick(s).

First up, is a name that has not been popular at all in 2017 and continues to struggle in the near term, General Electric Company (GE). This was a December stock consideration of mine as well as my last purchase in 2017. I know there is a lot of uncertainty regarding this stock in the near term but seeing it priced well into the teens it is becoming more compelling as a lot of the negative news surrounding this company seems to baked into the current stock price. Barring some massive sell off in the market or other world events I don’t see much more downside to this stock. Of course, Mr. Market always has the last word and GE, or any stock for that matter, can tank and new names not mentioned in this post may suddenly look attractive on any given day. That’s just the nature of investing.

Next, I am considering a health sector stock that has also been hammered this year, Cardinal Health, Inc. (CAH). This dividend stalwart continues to pay out a safe dividend with a yield that is also relatively high for this stock. At current prices the stock still seems fairly valued even after climbing from its 52 week low.

Sticking to the health sector several health REITs are looking very attractive to me as well. Names like HCP, Inc. (HCP), Welltower Inc. (HCN) and LTC Properties, Inc. (LTC) have seen significant declines the past few months and are looking a lot more attractive these days when compared to just last summer. In fact, all my health REITs have been performing rather poorly and are offering more compelling prices and yields at current levels.

What do you think about my potential stock buys for the month of January? Are you considering any of these names for your own portfolio this month? Please let me know below.

Disclosure: Long GE, CAH, HCP, HCN, LTC

59 thoughts on “January 2018 Stock Considerations”

    • Hi MD,

      At these levels I’m willing to nibble on GE. I bought some last month and plan to hold for the long haul. Will I look back at these buys and be happy in a couple years? Who knows… but that’s why we diversify and buy stocks that appear to be on sale. As always, I appreciate your comment.

  1. Regarding GE, Warren Buffet’s quote about being greedy when others are fearful comes to mind. Truth is, no one knows how well GE will do, but no one ever does, which is part of the beauty of investing. In any case, I completely agree that the bad news the media reports shouldn’t necessarily keep you from investing, as there will always be some bad news out there.
    Dividend Portfolio recently posted…December 2017 Dividend Income ReportMy Profile

    • Hi DP,

      Exactly. I’m well aware of all the risks GE is facing in the near and mid term. However, longer term it’s really anyone’s guess as to how GE will perform. I’m willing to nibble again should prices remain depressed. Of course, time will tell if buying at these lows makes sense or not. Thank you for commenting.

  2. I’m still looking to sell GE on any strength. That doesn’t mean it’s a bad investment. Just more of a turnaround play in my view and that doesn’t fit with my dividend growth stock strategy anymore. In the mean time, I’m happy to hold and collect the reduced dividend while I wait for an exit point. Your point on diversification is a good one. Glad we both held it through these tough times as part of a diversified portfolio of stocks. Good luck with your upcoming purchase Keith and Happy New Year. Tom
    Tom @ Dividends Diversify recently posted…The 1 Resolution I Would Make – If I Were You (Part 1)My Profile

    • Hi DD,

      GE is definitely a turnaround play these days. I’ll admit that and recognize all the shortcomings of the company. That being said, seeing it priced in the teens keeps me interested in the stock. Unless something really, really drastic changes with the company I don’t foresee myself selling the stock. If anything, I’ll continue to average down on cost all the while, as you mentioned, collect that reduced dividend. Thank you for stopping by and commenting.

  3. Nice list, Keith. I’m following GE closely as well.

    I believe I shared previously that I’m currently only long on one individual security: AT&T (T). At the moment 99.9% of out net worth is in some type of fund.

    But we’re looking in 2018 to (1) expand our individual name holdings and (2) balance retirement vs. non-retirement account passive income. At the moment, 94% of our passive income comes from retirement account holdings, so adding new capital to taxable accounts is a top priority this year.

    Thanks again for the post. – Mike
    Mike @ Balanced Dividends recently posted…Passive Income & Portfolio – December 2017 UpdateMy Profile

    • Hi BD,

      GE can be a great stock to hold if you have a long term horizon. Of course, only in hindsight will we know that answer. For me, I’m willing to bet a GE turnaround can occur and that seeing the stock trade in the teens can be a good point to add to a position. Quite frankly, unless we get some serious ‘left field’ news that would tank the entire market, I don’t see GE falling much further. A lot of the bad news seems to already be priced into the stock. Good luck expanding your portfolio in 2018. There are many great individual stocks out there for a passive income portfolio. As always, I appreciate your comment.

  4. Great Posts, I want to pick up GE too, but think their is some more downside in the coming months. I like the reits you mentioned but wondering if increasing interest rates will effect them or keep them stagnant in 2018. The dividends are good and you can afford to sit on them until they do rebound. Another way to look at it. Happy New Year and wishing you a healthy , prosperous New Year.

    • Hi JM,

      With a long term horizon, I think the health REITs can perform well over time. These health REITs are not new companies. They have operated successfully in higher interest rate environments in the past. I think the interest rate argument is overblown. In the meantime, I’ll be watching several names in the space along with beaten down GE for another potential nibble this month. Have a great 2018! Thank you for commenting.

  5. I like LOW here too although the starting yield is a bit on the low side. The the dividend growth really helps to make up for that and the valuation seems reasonable too. I haven’t looked through the REIT space recently so maybe with the specter of higher rates coming it might be the time to look for some gems that have been beaten up. Looking forward to seeing what you buy during the month.
    JC recently posted…Setting Records | Dividend Update – December 2017My Profile

    • Hi JC,

      Never considered LOW for my portfolio though it looks like a strong company/stock like HD, especially for the long haul. Some REITs have performed pretty well over 2017 but the health REIT sector got really hit hard last year. I guess it’s a combination of health sector regulation uncertainty from D.C. as well as the rising interest rate environment you mentioned. Either way, many solid names in the space are going on sale and it may be a good time to pick up some shares. As always, I appreciate your comment.

    • Hi Passivecanadianincome,

      So far, I think everyone on Wall Street is enjoying the New Year! Time will tell how any of our investments will do and I’ll gladly nibble on stocks when they are beaten down. Over the years I bought many solid companies that faced near and mid term uncertainty. Names, that in hindsight, make you want to kick yourself for not buying when everyone was crapping all over them. I invest with blinders on. Don’t know, don’t listen, don’t care about any of the financial noise out there. I just invest for the long haul and will happily buy good companies with beaten down share prices. Thank you for commenting.

  6. DH,

    I like your list a lot. I am looking at LTC one of my favorites. Since I restart investing in early December I am focusing first on monthly dividend payers LTC is a good start to add to Main and Stag. Although HCP and GE do look attractive now.

    Cheers happy investing

    Dividend Pursuit
    Dividend pursuit recently posted…Updated post December 2017My Profile

    • Hi Dp,

      Looks like we are pretty much on the same page this month in terms of stock considerations. I still can’t believe how far the health REITs have fallen in a relatively short amount of time. No doubt many names in the sector are looking quite attractive these days. You have to love those monthly payers 🙂 As always, I appreciate your comment.

    • Hi BPM,

      Many are waiting for the magic price of $15. At that price valuations become a lot more attractive. For me, I’ll continue to consider and nibble on GE as long as the price remains in the teens. I picked some up in December and would definitely consider adding more in January. Buying high and selling low is not a recipe I like to follow. If anything, when I buy high I also like to buy low and average down my cost basis. Thank you for stopping by and commenting.

  7. Hi DivHut,

    Even GE has their Healthcare division – one of the better performing of their segments. I also have my eye on the same healthcare REITs, as well as some medical device manufactuers.

    Happy New Year!


    • Hi PP,

      GE has it’s nose in so many different sectors that it can be hard to look at its individual success stories when you paint a broad view picture of the company. I think GE can mount a successful comeback. Can’t ignore GE’s place in the energy sector, both fossil fuel (now that oil has been climbing again) and renewable too. We’ll see what happens in the coming months and years. Thank you for sharing your thoughts.

  8. Love the stock considerations Divhut!

    I’ve been eyeing HCN myself now that I can contribute to my Roth IRA for 2018. I’ve been looking at VTR as well…decisions, decisions…

    Also, I work in Healthcare and order material from Cardinal quite a bit. The stock price has taken a nice hit, but I believe they will be fine in the long run. I love they pay a dividend on an off month as well.

    Good Luck in 2018!
    -Money Hungry
    Money Hungry recently posted…2017 Dividend IncomeMy Profile

    • Hi MH,

      The health REITs seem to be the best value play these days, especially after such a dismal 2017 showing. Many would consider VTR best of breed but I think HCN is on par with them. CAH seems to have bounced quite nicely from their recent lows so that stock is looking a little less favorable to me at this time. We’ll see how the rest of January plays out. Thank you for commenting.

    • Hi BM,

      It’s true that GE isn’t really considered cheap by PE measures though I wouldn’t call it expensive either. I think the stock has already been punished by all the bad news, not least of which was the dividend cut. I guess we’ll see if a better leaner GE can emerge in the future. I’m not sure “the age of the conglomerate is over.” Many “old guard” companies have had the death knell rung only to bounce back quite nicely. Fast food??? Who goes to MCD or YUM anymore? IBM, a tech company that was founded before WWI. GIS, HRL… who eats packaged food these days? Thank you for stopping by and sharing your thoughts.

    • Hi dividendgeek,

      It seems like those buying GE are in the minority these days. While I’m not “doubling down” on GE I am quite fine with nibbling on the stock in the teens. I never looked at ALK for my own portfolio though I can see why you wanted to pick some up recently. Thanks for sharing your buys.

    • Hi BHL,

      You know I like looking at the laggards first in any given month. Buy when others are selling, right. Still early in the month. I’m still weighing my options, though the health REITs seem to be calling me the strongest at this time. Thank you for stopping by and commenting.

    • Hi DD,

      Most of the time, I’m all about the laggards. My recent buys have been in GIS, HRL and CAH when they were at the 52 weeks lows and everyone crapped on them. I remember buying some GWW when panic spread about AMZN owning the world. Can’t be afraid to pull the trigger on a stock or entire sector for that matter when things aren’t looking rosy. In fact, that’s usually the best time to buy a stock or any asset for that matter. You aren’t alone in waiting to see how the GE turnaround story plays out. Usually, once the turnaround has occurred though, the stock price is significantly higher than its low. As always, I appreciate your comment.

    • Hi DS,

      Many like GE in the teens and even more seem to be steering away from the stock at current levels. I still have a long term horizon and will continue to nibble on the name and average down my cost basis if prices stay in the teens. I picked some up in December and wouldn’t mind adding more in January. At least most of us agree on the health REITs. I can’t believe how far they have all fallen in just the last six months or so. Thank you for commenting.

  9. Divhut,

    I like your picks but I have serious doubts right now with GE. I think they’re going to face headwinds for a good year or so before they start to climb upward again. First, they’ve got to shut down a sizable chunk of the business that isn’t making money. Second, they have to get used to the new management style at the top. Third, they’ve got to shake off the investor bad news. I have no doubts that they will eventually rise again but I just feel that it’ll be a good while before that happens.
    Dividend Reaper recently posted…Passive Income Update – Dec 2017My Profile

    • Hi DR,

      You make good points about GE and you are definitely not alone in sharing those sentiments. I commented that GE is a very polarizing name these days. Either you like it in the teens or think it’s toxic for the foreseeable future. I’m willing to nibble in the teens and take a chance on this stock having a very long term horizon in mind. Thank you for stopping by and commenting.

  10. just bought some HCP, I think the stock will have some more downward pressure as the interest rate will go up. One of the few REITs will go up is NRZ because it’s an mREITs … it sells mortgages security, so their model will always work, buy low, sell high, or higher.

    • Hi vivivanne,

      Looks like the health REITs are a popular bunch. Many large, high quality names are definitely going on sale these days. Thank you for stopping by and sharing your thoughts.

    • Hi timeinthemarket,

      No doubt, GE has its issues and it will take some time to right the ship but I feel the stock price can definitely move faster than the recovery of the company, especially when it is priced in the the teens. As always, I appreciate your comment.

    • Hi DG,

      I got over the dividend cut with GE but many can’t seem to get by that fact. You have to admit, things are looking pretty low for GE at the moment which is why I bought some in December and am considering adding more in January. We’ll see how the rest of the month unfolds. Thank you for stopping by and commenting.

  11. I have both LTC and Welltower – as well as GE. The monthly payment from LTC is fun, like a little end-of-month gift.

    I bought GE back in May – stupid move, I know- but my time horizon is vast, so I am hoping it makes a full recovery. I am wondering if I should pick up more now that it’s cheaper, or wait and see. In the meantime I have other stocks that I’m watching that I’d like to pick up too.
    Meow @ Money with Meow recently posted…Meow’s Wishlist: Dividend Stocks 2018My Profile

    • Hi MwM,

      Like your REIT buys. Nice to see others thinking the same as I do. No worries about GE. It’s impossible to buy at the “perfect” time. With a long term horizon you can still do quite well with GE. It’s still a consideration of mine, especially if it stays in the teens and I’m able to average down my cost basis. Thank you for commenting.

    • Hi ED,

      I’m usually not afraid to buy a stock when sentiment has turned negative. While I’m not a market timer by any means, sometimes I get lucky. Of course, I always have a very long term horizon with all my buys. My CAH buy, along with my recent HRL and GIS buys seemed to be well timed. I really don’t pay any attention to the financial headlines/media. So far, investing with blinders on has worked out well. Thank you for sharing your thoughts.

  12. Good lists. REITs always tend to me on the list for me come the start of the year since that’s usually when I have money available to invest in the Roth. I prefer to stick the high dividend paying REITs in the tax-advantaged account.
    Two Investing recently posted…December 2017 IncomeMy Profile

    • Hi TI,

      Like you, my REITs are all in a tax advantaged account. It’s been a long time since I added to any of those stocks mentioned but seeing them all in the red in my portfolio just highlights how far these once high flying companies have fallen. As always, I appreciate your comment.

  13. Good list there, DH. In addition to some of your list like GE and HCP, I also have a few more on my list like OHI, SO, D, SKT etc. I agree to you philosophy of picking lower valued stocks from available pool of great dividend paying stocks.

    Good Luck and happy investing.

    • Hi TDK,

      I’m liking some of your picks too. SO, D and even PPL are interesting utilities at this time. It’s usually a good time to buy a high quality stock when everyone else is selling. I’m still weighing my options for January. Of course, I’ll post my buy once it happens. Thank you for commenting.

  14. I’m also considering HCP and HCN. I think CAH is a great company too, although the stock price has started to rise so that’s lower on my priority list if I have limited capital to invest with. Thanks for sharing your stock considerations.

    • Hi ACI,

      Looks like CAH has bounced quite a bit from their recent low. It’s funny, CAH, GIS and HRL were all near their 52 weeks lows around the same time and have since rebounded. I’m glad I got to pick some up when I did even though the sentiment was very negative for each stock at the time. At least the health REITs are still looking attractive. Thank you for commenting.

  15. Thank you for providing these insights!

    I am pretty new to the investing world, and have been building my families portfolio over the past 3 years. I only invest in stock index funds, but I always enjoy reading about others who invest in individual stocks.

    I look forward to reading your future insights and ideas!

    • Hi FMM,

      I think it’s great that you have started building up a portfolio for your family. Personally, I feel the most important step has been taken in that you started on your journey. To me it doesn’t matter if you are buying individual stocks, index funds, real estate, precious metals, etc. Just taking that first steps towards investing is huge. Hope to see you back. Thank you for commenting.

    • Hi Stockles,

      All the REITs had a tough start to 2018. Interest rate fears are also affecting the utilities. Some solid names are going on sale. Usually, the best time to buy is when others are selling or show no interest. Thanks for commenting.

  16. Got to love the opportunities created when stocks get hammered like GE – especially when they still churn out the dividends! CAH looks to have bounced back over the past couple of months – still in your buy zone?

    • Hi Frankie,

      I’m looking elsewhere after CAH rebounded quite nicely. The health REITs and utilities look more attractive to me these days. Of course, GE continues to be in the dumps and is also calling to me though I acknowledge it’s a riskier proposition. Thank you for commenting.


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