December 2018 – Watchlist
December 2018 – Watchlist
Its December 2018, and time to look across the market and see what stocks I would like to buy this month. The market is all over place these days. 1 day we see some huge dips and then the next day it rallies. I guess this is alright since it creates some nice bargains.
Here in Canada, Energy stocks and Banks stocks seem to be taking a beating. Almost all the banks, seem like a great buy at the moment and a couple made my list this month.
Bank Of Nova Scotia
Bank Of Nova Scotia – I’m a big fan of what BNS has been doing, expanding down south. I have made various purchases of them in 2018, but yet haven’t created a big enough position to get a dripped stock each quarter. While the other banks have dropped in price, BNS actually popped a bit… Typical when you want to buy them right?
At a 72.33 per share price BNS sports a 4.76% dividend yield and a p/e of 10.5. Both great numbers. Id love to get my position large enough to drip and with a ex dividend date of Dec 31st approaching I got to decide soon.
Bank of Montreal
Bank Of Montreal – Another Bank holding of mine. It pays in my lowest income month so that’s a nice bonus as well. I don’t have this one dripping for me either but at around 92 a share, it will take a bit of capital to get there.
Currently BMO has a yield of 4.39% and a p/e ratio of 10.3. I haven’t seen these kinda of numbers with BMO in quite awhile. Especially that yield, north of 4% that is very nice. The bank is doing great and even boosted its dividend for the 2nd time in 2018 last month by 4% BMO also has the longest dividend streak in Canada, paying dividends for a amazing 188 years!
Transcontinental Inc. – This would be a new position for me, but wow is it ever beat down… The company is Canada’s largest and one of North America’s largest printers. While newspapers tend to be a dying business, they are still around. I think most of the mail I get is junk mail, well they print that for businesses as well. Management is smart and has been transitioning to packaging though with 3 acquisitions this year.
In the beginning of September the stock was trading north of 31 bucks, now its currently $19.63. 40.28% off its 52 week high……. P/e ratio of 6.9 and a dividend yield of 4.33%. A full point over its 5yr avg yield. 5 yr average dividend growth sits at 6.6% and they have been raising that dividend the last 16 years. Payout ratio around 30%
The numbers don’t lie, this seems to be a great deal at the moment. I do wonder if there will be a lot of people taking capital losses this month though for tax purposes. This could pressure the stock price more this month. Jordan from Money Maaster wrote a nice analysis about them last month check it out.
Nutrien – Is this company a steal currently, no I don’t think so.
It is the largest producer of potash, and the second largest producer of nitrogen fertilizer, in the world though! I sold my previous position a couple months ago when we needed to buy a new car. I’d love to own them again.
I sold our stocks just north of $70 a share. It’s currently selling for $63.50 a share and offers a yield of 3.63%. Being a newly developed company they don’t have much of a dividend history, but did raise it in 2018. They are still perfecting the merger, but I think Nutrien has a tonne of potential. With the budding weed industry and growing population, fertilizer’s demand will only increase! Bonus – Basic Materials sector (My lowest Sector)
Artis Reit – An Industrial, Retail and office Reit. It just cut it’s dividend and the stock has gotten hammered. At is current price of $9.32 per share its currently 35% off its 52 week high.
Real estate has become one of my lowest sectors in the portfolio, and this would help that sector out quite a bit. After this cut the stock yields 5.76% and the dividend is easily covered by earnings.
The company still owns all those assets, is trying to diversify into stronger markets and will have a lot of cash now to buy back shares or fund new purchases. Sometimes a dividend cut can create a solid buying opportunity and with a yield still north of 5%. This may be a great spot to put some money.
Well there you have it, my top 5 picks to buy in December 2018. Market volatility isn’t a bad thing if your a long term investor. I’m going to try to diversify my portfolio a little better and lower some of our top holdings in the next couple months. (I have a couple over 5% of my portfolio)
Out of those 5 picks which one would you choose and why? If you are watching something else, what are you debating buying? Or are you just stacking cash?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.