Seeking Alpha

December 2018 - Watchlist

|
Includes: ARESF, BMO, BNS, NTR, TCLAF
by: PassiveCanadianIncome

It's 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 the place these days. One 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 Bank stocks seem to be taking a beating. Almost all the banks seem like a great buy at the moment and a couple made to my list this month.

Bank Of Nova Scotia

Bank of Nova Scotia (NYSE:BNS) - I'm a big fan of what BNS has been doing, expanding down south. I have made various purchases of it 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. I'd love to get my position large enough to drip, and with an ex-dividend date of Dec. 31st approaching, I got to decide soon.

Bank of Montreal

Bank of Montreal (NYSE:BMO) - 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 kinds of numbers with BMO in quite a while. Especially that yield, north of 4%, which is very nice. The bank is doing great and even boosted its dividend for the second time in 2018 last month by 4%. BMO also has the longest dividend streak in Canada, paying dividends for an amazing 188 years!

Transcontinental, Inc.

Transcontinental, Inc. (OTCPK:TCLAF) - 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 three acquisitions this year.

In the beginning of September, the stock was trading north of 31 bucks; now it's 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. 5yr average dividend growth sits at 6.6%, and it has 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 Master wrote a nice analysis about the company last month (check it out).

Nutrien

Nutrien (NYSE:NTR) - 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! I sold my previous position a couple months ago when we needed to buy a new car. I'd love to own it again.

I sold our stock 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, it doesn't have much of a dividend history, but did raise it in 2018. It is still perfecting the merger, but I think Nutrien has a ton of potential. With the budding weed industry and growing population, fertilizers' demand will only increase! Bonus - Basic Materials sector (My lowest Sector).

Artis REIT

Artis REIT (OTCPK:ARESF) - An industrial, retail and office REIT. It just cut its dividend, and the stock has gotten hammered. At its current price of $9.32 per share, it's 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.

Conclusion

Well, there you have it, my top 5 picks to buy in December 2018. Market volatility isn't a bad thing if you're 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?