A little late with this post as I like to highlight my potential stock buys in the beginning of the month but sometimes it can be tough deciding where to deploy fresh capital when many stocks are trading at premium prices. Of course, we all know that no matter how high the market rises there will always be a gem in the rough lurking somewhere. With that being said let’s take a look at some of my September stock considerations.
I’ll potentially be looking to add to a couple of my health REITs that have been showing some signs of life when compared to their performance in early 2018. These buys will allow me to average down my cost basis while continuing to enjoy some generous yield. It’s been a while since I added to any of my current REIT holdings and HCP, Inc. (HCP) is starting to look OK to me once again. Seeing HCP well below a $30 price could finally compel me to trigger a buy. Also, in the health REIT space I am looking to add to my Sabra Health Care REIT, Inc. (SBRA). The stock has climbed a lot from its lows of 2018 as this skilled nursing REIT play still demonstrates a difficult business environment. Of course, that generous yield, which highlights some of the risk involved with the stock, can justify the risk/reward scenario.
Finally, I’ll continue to look at some of the utilities for a potential buy in September. Last month I added to my Dominion Energy, Inc. (D) as the stock continues to look attractive to me sporting a juicy yield of 4.6% with a moderately high payout ratio of 81.1%. It also has a very respectable ten year dividend growth rate of 7.6%. I am also considering adding a new holding to my portfolio, PPL Corporation (PPL). As with D, PPL is another juicy yielding (5.3%) utility with U.K. exposure that offers a sustainable dividend with a payout ratio of 70.0%. While not a stellar dividend grower over time the high current yield makes up for that deficiency. While utilities are rarely exciting investments, they can offer stability and predictability to any dividend income portfolio.
What do you think about my potential September buys? Are any of these names on your watch list? Please let me know below.
Disclosure: Long HCP, SBRA, D
17 thoughts on “September 2018 Stock Considerations”
I really like HCP I may even add a few more
Shares this month. But I am also looking at VTR, WPC and OHI before the month ends.
Looks like the REITs have grabbed your attention. I know HCP had its troubles in the past but looking forward I think it may provide good value and potential solid returns. Looks like I’ll be considering it again in October.
Keith, I like D and PPL. Not so much on HCP having been burned by their dividend cut a few years back. I’m not familiar with the other REIT. Tom
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I know what you mean about HCP. I have held that stock through thick and thin and feel the bitter taste you describe. Looking forward though it may be a good long term play especially after it has shuttled its toxic assets via the QCP spin off. I went with D in September but HCP still might be a potential buy for me in October.
I like both D (also own it) and PPL. Of the two D probably has better prospects considering the SCANA issue. However, I really like the geographic and national diversity you get with PPL. For that reason I am watching PPL and NGG a lot.
D and PPL seem to be grabbing a lot of the mind share of our fellow DGI brethren. I never looked at NGG in earnest though right off the bat I can see its appeal as a long term potential hold.
I initiated a small position in DLR last week which wasn’t the best value purchase but it’s a reasonable buy. Unfortunately I’m pretty much tapped out for cash while we continue to focus on debt pay down but that should be done hopefully by the end of November if not then December. I need to start getting some utilities into my portfolio because of their generally higher yields and slow, but steady growth. Thanks for sharing some names that look interesting to you.
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It’s nice to see you so focused on your debt reduction. If more people thought like you we’d have fewer households in financial distress. REITs have had a difficult year but seem to be making a comeback in recent months. Early 2018 was a disaster for the sector and in hindsight was a good time to add some shares. I don’t hold DLR though I was a customer of theirs at one point for nine years at one of their colocation facilities.
I am also looking at HCP, SNH, SBRA all within the the Roth IRA. Looking to see what I could do, to capture some yield, but something that has dividend growth. Odd market right now.
HCP seems to be one of the health REIT laggards so far though all have bounced back quite nicely from their early 2018 lows. It was tough to look at my IRA in the beginning of the year. HCP is my biggest laggard which is why I continue to look at it as a potential buy.
I recently bought some SBRA and have an open order in right now for a bit more. I’ve been adding REITs recently as I had some funds available in an IRA. Recently wrote about another REIT that I just added to the portfolio too, EPR.
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Nice pick ups. The health REITs were in free fall in early 2018 only to rebound quite nicely since. It can be tough to buy when others are selling but that’s usually the best time to pick up any asset. Thanks for sharing.
I am hopeful we will see more favorable purchase price points for REITs between now and the end of the year. If these declines in REIT valuations materialize, I would like to add to my WPC position in low $60s which is another ~5%+ drop, I would be looking at HCP and a few others as well.
My latest purchase was BAYRY as the significant value decline in its market cap has been absolutely ridiculous in light of the herbicide fears IMO. With respect to utilities, I’ve kept my eye on both PPL and NGG.
I think many are looking at PPL and NGG these days. It’s been a tough year for utility companies but like everything else there is an ebb and flow to to all sectors at some point. Why not take advantage when things aren’t looking as rosy and pick up quality names at better prices, values and yields. Early 2018 was a disaster for REITs. Today a lot have rebounded quite nicely.
This may be a great time to scoop up D and PPL. The utility market took a bath today and maybe there will be more on the horizon. Just initiated a position in NGG!
Well, I went with D in September. Now it’s time to look forward to my potential October buys. 2018 has not been kind to the utility sector which only gives us better buying opportunities coupled with higher current yields to capture.