With a new trading year already in full swing it is time, once again, to highlight some of my potential stock purchases. While the market had a nice bounce the last couple of months, there is still no shortage of stocks that are becoming fairly valued to undervalued. The reality of the day is that we’ll continue to see stock prices continue to come down as interest rates rise. No reason to believe interest rates will stop climbing anytime soon. Of course, the silver lining amid the market collapse is that every new dollar put to work today in dividend stocks comes with an automatic higher yield when compared to just a few months ago. With that being said, let’s take a look at some of my January stock picks.
First up, I am looking at Verizon Communications Inc. (VZ) once again. I nibbled here a bit in November and December and prices are still looking attractive. This stock is trading with a low forward PE of just over 8 and sports a very juicy yield getting close to 6.5% and a moderate payout ratio of around 56% making this dividend appear to be very safe going forward. I realize that this company may not be a growth machine going forward but what it lacks in growth the current yield makes up for. VZ has climbed back quite nicely from its lows in the last couple of months.
Next, I’m taking a look at a stock that I have not bought in a long time, Broadcom Inc. (AVGO). With a forward PE just under 13 and a decent current yield just north of 3% and a moderate payout ratio around 62% this dividend is considered safe with plenty of room for future growth. At current prices the stock seems to be fairly valued.
Finally, I am also looking at the stock everyone loves to hate Altria Group, Inc. (MO). MO still looks a little rich at current prices but I’ll be waiting for entry points closer to $40. As mentioned, the stock still appears to be expensive with a current PE of 17 but for those looking to cash in on current yield this stock may be the ticket.
What do you think about my stock considerations for January? Another short list like last month. What are you considering for the month? Please let me know below.
Disclosure: Long VZ, AVGO, MO
- December 2022 Stock Considerations
- May 2022 Stock Considerations
- October 2022 Stock Considerations
- September 2020 Stock Considerations