The stock market is once again near all time highs making it difficult to find under valued stocks. As always, I plan to make a purchase this month. In order to build a passive income stream, I must buy income producing assets. It's pretty simple. Holding cash is not a bad idea right now, but I cannot predict the future. Averaging in over time is a strategy that makes sense to me and has worked well for me in the past. I'm looking to increase my position in a super high quality name this month.
Procter & Gamble:
Wow it has been two years since I've bought PG shares! PG is a dividend king (50+ years of increases) and one of my favorite companies in the world. The reason why I have shied away from buying PG has more to do with allocations than anything else. My portfolio is reaching the point where I can start increasing my core positions again. I'm pretty excited about that! With a 3.0% yield, PG is looking attractive as a long term position. It is well above my cost basis right now, oh well, that's what happens to strong stocks. I'd be very interested in picking up shares around $77-78 if we happen to see a decent dip.
CVX is another dividend champion and favorite of mine. I am actually underweight CVX at the moment and would have no problem scooping up a few shares. I plan on selling some of my other energy positions in the near future which would leave me a lot of room to pick up CVX and XOM. Last month I thought XOM had an edge in valuation, this month CVX is looking a little more attractive to me. It is currently yielding about 3.3% and would make a nice contribution towards growing my passive income stream. I'd be interested in adding shares around $117-119.
SO is a small position that needs a boost in share count within my portfolio. This is my favorite utility and one of my favorite dividend growth stocks to boot. I think SO has a bright future, I definitely want to be a part of it. I would classify Southern as fairly valued at the moment. Not under valued. That's okay because this is surely the highest quality utility around. Yeah the dividend growth is a bit low, it's true. On the other hand the yield is pretty nice and the increases can be counted on. I'm looking to add a few shares around $42-43 if possible.
I'm going to buy something this month, it's just a matter of when. The three companies listed above are my top choices at this point in time. I am also considering KO, XOM, and GIS.