New month… new stock considerations. I can’t believe that October is already here… the final quarter of 2020. Seeing how fast time blows by simply reminds me to stay invested no matter how crazy the market seems to be. We have witnessed some pretty harsh declines this year only to be followed by strong rebounds that keeps us flirting with new all time highs. The lesson… stay in the game, stay diversified, keep collecting those dividends. That’s it. With that being said here are my October 2020 stock considerations:
First up in the health/biotech space I’m looking to add to my Gilead Sciences, Inc. (GILD). It was one of my potential picks way back in December 2018 and January 2019 and was my sole buy in February last year as prices continued to remain weak and yields, which are still well covered, are around historical highs just above 4%. Clearly, GILD has been stuck in neutral for about a year and half but has been able to generate a nice passive income stream in the meantime. One of the perks of dividend investing.
Like last month, I am looking at Altria Group, Inc. (MO) once again. What can I say… I still like the stock well under $45. The juicy yield north of 8% is still covered and the negative sentiment around the stock has not abated. I believe MO’s entry into the cannabis and vaping space will, in the long run, pay off as traditional tobacco usage continues to decline.
Another stock I am looking to buy is The Southern Company (SO). While admittedly a bit expensive at current levels it does sport a nice yield that is covered (payout ratio of ~82% which is not unusual for a utility) and offers a lot of stability that a utility is known for and a decent forward PE of 17.4.
The next consideration seems to be a stock everyone loves to hate, AT&T Inc. (T). Under $30 the stock seems compelling to me considering that very juicy yield north of 7%. I know about its huge debt load and the fact that the stock price has been relatively stagnant, but it’s hard to argue against a stock that has been paying rising dividends for decades.
Finally, I am looking at Broadcom Inc. (AVGO) as I am still looking to boost my tech exposure which is still a small part of my overall portfolio. With AVGO yielding close to 4% the stock seems to be trading at decent value with a forward PE of 13.5 even though the stock is near all time highs.
There you have it. My short list for the month of October. Of course, with market volatility high these days some new opportunity not listed here may present itself. What do you think about my stock considerations? Are you buying any of these names too? Please let me know below.
Disclosure: Long GILD, MO, SO, T, AVGO
Not a fan of broadcom but have been eyeing TI (TXN). Still a bit high for my tastes but getting closer to pulling the trigger. @ $141 I’d like to see it dip a bit more. .90c divi is nice
Keeping an eye on T as there’s been (and has been) a bunch of debate on their debt. @ $28 a share, its hard to pass up though…
SO Im pleased with as its increased apx 9% from when I bought. MO has decreased apx 4%. @ $39 its tempting to buy a few more.
My two buys where VLO & VDE (ETF). While VDE is on track, so far, VLO is kicking my back side. I factored in a price decrease but then it really dropped. A loss of 26%… grrr. I’ll hold as volatility doesn’t bother me as much, its just that I thought I had factored in a semi-predictable variation. I was wrong… Grab the divi’s for now and see what happens. If it drops down much more (don’t predict this will happen but its energy), then I may have to double down, especially if the divi holds with no foreseeable cut.
This month CAH, PRU, TXN and maybe a couple of REITs on the list to keep an eye on. I’d like to add GPC as well but its just to overvalued.
Keep the updates coming. Thx
Hi whiskey,
AVGO has really bounced back nicely from its March lows and still looks compelling at current levels. I never really looked into TXN in earnest. Of course, T is the stock everyone loves to hate. True, their debt levels are huge but has been improving steadily. For me, T is al about the yield. I don’t expect it to be a high flyer stock. Bottom line, “Grab the divi’s for now and see what happens,” as you stated. That goes for all my holdings. Thank you for commenting.
Of all the companies you mention, I like AT&T. So much so that I’m considering purchasing 100 shares of the stock so that I can start doing covered calls. I completely agree with you that it’s hard to argue with a stock that has been paying rising dividends for decades.
Dividend Portfolio recently posted…Dividend Income Report – September 2020
Hi DP,
T, like MO, seems to be a stock everyone loves to hate. I have read all the negative and positive articles for both over the years. One thing’s for certain, the stocks continue to deliver every quarter and those yields are very hard to ignore.
I can’t touch a tobacco stock on principle but I see the appeal. I’m following Southern as well right now. As for T, I like the price. But yield’s over 7 scare me a little. It’s also already 5 percent of my Robinhood portfolio. I could see myself take a small nibble just to drop the Cost Basis down a little.
Hi JM,
You aren’t alone regarding your MO feelings. Many do not want to invest in energy, tobacco, alcohol, fast food, etc. for a variety of reasons. I don’t expect MO to deliver great capital appreciation rather consistent yield for the long haul. SO has been a great stock to hold but never seems to be valued cheaply. Sometimes you have to pay for a reliable dividend. Thanks for commenting.
Its almost similar for me ,I am also looking to average down on discover ,one of my biggest position.
Broadcom is a small position of mine,Always looking to add ,but waiting to see for entry point.
desidividend recently posted…September 2020 Dividends
Hi desidividend,
AVGO really ran up from its March lows. Wouldn’t mind seeing a bit of a dip there before adding more but even at current levels it looks attractive.
Keith,
This list has some serious dividend yield to it! Broadcom is an interesting one. To be honest, I don’t know a lot about them. However, if they are good enough to be on your watch list, they are definitely worth investigating further. Let’s make some moves and continue increasing our dividend income!
Bert
Dividend Diplomats recently posted…Dividend Stock Purchase: Lanny’s September 2020 Summary
Hi DD,
With banks paying nothing I have to look for yield in the market. Of course, Nibbling on these high yields could bite me one day but the histories of these dividend stocks speaks volumes.