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