New month… new stock considerations? Well, I guess if you call picking the same stocks for the last two or three months as new then, yes… these are my “new” stock considerations. Ever since going the DGI route I don’t recall considering the same two or three stocks for several months in a row but I guess when you see some compelling, juicy yield being served up by some of the most respected dividend stocks around you can’t just turn a blind eye. With that being said, let’s take a look at my August stock considerations.
First up, I’m taking a look at 3M Company (MMM). This stock has really taken a bath over the last six months or so and is now looking fairly valued. The dividend yield has jumped to well over 4% as a result of the price decline and this accidental high yield is trading at a reasonable forward PE of just over 12. The forward payout ratio for the dividend is sitting at about 62% making this dividend safe for now. Of course, you cannot dismiss the multi-decade dividend increases this dividend stalwart has given investors. I know MMM is facing many legal issues but the recent price declines is making the stock look a lot more fairly valued.
Next, I’m taking another look at Starbucks Corporation (SBUX). This stock continues to be a loser in 2022, though had a nice bounce recently, which may mean a good buying opportunity for those willing to hold on for many years. Shares are looking fairly valued with a PE of around 23 and a yield around 2.3% with a payout ratio just at 50%. Though share price has been hammered the dividend still appears to be safe. Could be a good month to pick some up.
Next, I am taking a look at Gilead Sciences, Inc. (GILD). This stock had a bad start to 2022 and is seemingly looking undervalued at current prices. With a generous dividend yield of about 4.8% resulting from it’s lower share price this name has caught my eye for April. With a payout ratio just under 80% the current dividend appears to be safe at current levels. A forward PE of around 9.4 also makes this stock appear to be on sale.
Finally, I am looking at Verizon Communications Inc. (VZ) once again. This stock is trading with a low PE of about 8.2 and sports a very juicy yield of about 5.7% and a moderate payout ratio of around 50% making this dividend appear to be very safe going forward.
What do you think about my stock considerations for August? As you can see there are similar names listed here as in April, May and June. What are you looking to buy this month? Please let me know below.
Disclosure: Long MMM, SBUX, GILD, VZ