VZ - December 2023 Stock Considerations
2023-12-04 06:34:00 ET
Summary
- 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.
- Verizon stock is trading with a low forward P/E of just over 8 and sports a very juicy yield just north of 7% and a moderate payout ratio of around 52%, making this dividend appear to be very safe going forward.
- Trading with a forward P/E around 8 and yield around 9.4% and moderate payout ratio of 77%, Altria's dividend still appears to be safe.
- To me, UGI Corporation seems fairly valued at current prices and is sporting a nice yield because of its 2023 share price decline.
With the final trading month of 2023 upon us, it is time, once again, for me to highlight some of my potential stock picks. 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 come under pressure as interest rates remain elevated putting additional strain on corporate borrowers. No reason to believe interest rates will come down 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 December stock picks.
First up, I am looking at Verizon Communications Inc. ( VZ ) once again. It’s been a while since I nibbled on this dog of a telco. Seems like VZ along with AT&T Inc. ( T ) had a very tough 2023. This stock is trading with a low forward P/E of just over 8 and sports a very juicy yield just north of 7% and a moderate payout ratio of around 52%, 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. I know VZ, like my second pick below, is a stock everyone loves to hate, yet somehow continues to pay out nice dividends year in and year out.
My second potential buy for December is Altria Group, Inc. ( MO ) . I know this company suffers from declining smoke volumes and is under constant legal pressure and stumbled a bit when it came to vaping and marijuana offerings, yet continues to pay out an ever increasing dividend for multiple decades without flinching. The company continues to diversify in non-combustible businesses as well as increasing its alcohol portfolio. I’m not expecting much of a share price increase from this name but at current levels the yield is hard to pass up. Trading with a forward P/E around 8 and yield around 9.4% and moderate payout ratio of 77%, the dividend still appears to be safe.
Finally, I’m looking at another beaten down name in 2023, UGI Corporation ( UGI ) . This natural gas energy play is still trying to work through its AmeriGas Propane business acquisition which is dragging down the overall performance of UGI. To me, the company seems fairly valued at current prices and is sporting a nice yield because of its 2023 share price decline. Nibbling here and there makes sense to me at current levels.
What do you think about my potential stock buys for December? What are you looking at as we close out 2023. Please let me know below.
Disclosure: Long VZ, T, MO, UGI
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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December 2023 Stock Considerations