December 2016 Stock Considerations

Today, we sit at all-time record highs in every major market index as financial experts again are scratching their heads and wondering what happened. Media outlets make their money with scary and outlandish headlines. After all, bad/scary news sells, it draws us in and keeps us reading and watching longer, and so with one month left in 2016 I am left with deciding which stock(s) I should consider adding to my portfolio while knowing in the back of my head that the DOW may hit 20K or more this year or crash and burn to 15K or less. I don’t know, no one knows. That’s a fact. Accept it, and your investing career will be that much easier to manage.

Many seasoned dividend investors already know that the market and even individual stock prices are highly unpredictable and often trade irrationally in the short and mid-term. All you can really do is stay diversified, buy stocks, sectors, commodities when they are trading at good value and make sure, if buying dividend paying stocks, that payout ratios are manageable in order to keep that passive income rolling in whether the market is in record territory or deep in correction mode. With that being said let’s take a look at my December 2016 stock considerations.

Going into the last month of the year my focus will be on the staples, health and REIT sectors.

My first consideration in the staples/discretionary space is VF Corp (NYSE:VFC). A dividend stalwart by every measure, this name has hit several recent headwinds not least of which is a strong U.S. dollar that has brought this stock down in recent months and is now yielding around 3%.

In the same staples space I am also considering another dividend stalwart, Kimberly Clark Corp (NYSE:KMB). KMB has come down quite a bit from its recent highs several months ago to offer a juicy yield well north of 3% and better value.

Finally, coming out of the U.K. are two names I am considering for December, Unilever plc (ADR) (NYSE:UL) and Diageo plc (ADR) (NYSE:DEO). I still like UL stock under $40 as the yield and value being offered is much more enticing when compared to just a few months ago and the same is true for DEO at around $100.

In the health sector Johnson & Johnson (NYSE:JNJ) and AbbVie Inc (NYSE:ABBV) are both well off their summertime highs and offering much better value and yield as a result. It’s been a very long time since I added to my JNJ position and I would welcome the chance to add to this long-term holding of mine.

In the REIT space I’m looking at beaten-down health REITs specifically, that are all trading way off their summertime highs and sporting some really juicy yields. Stocks I am considering in this sector include HCP, Inc. (NYSE:HCP) and Welltower Inc (NYSE:HCN) both sporting yields well above 5% after their recent sell off. For ‘fun’ I am also considering a new position in a long-time watch list favorite, Omega Healthcare Investors Inc (NYSE:OHI).

There you have it. My December stock considerations. As you already know, I usually end these “considerations” posts with the caveat that Mr. Market makes all the rules and names that are not mentioned above may suddenly become attractive to accumulate.

What are some of the stocks you are considering for your December purchases? Are any of the above names on your monthly watch list? Please let me know below.

Disclosure: Long VFC, KMB, UL, DEO, JNJ, ABBV, HCP, HCN

Note: This article is written by DivHut. Check out more of the site’s dividend investing content at divhut.com.

Additional Links:

(1) http://money.cnn.com/2016/02/01/investing/stocks-markets-january-93-percent-lost/

(2) http://www.cnbc.com/2016/07/04/why-the-majority-of-brexit-polls-were-wrong.html

(3) http://fortune.com/2016/11/08/dow-futures-mexican-peso-election-trump-clinton/