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 May stock considerations.
First up, I’m taking another look at Starbucks Corporation (SBUX). What a loser of a stock in 2022. Feels kind of weird to say that considering SBUX has been a darling for multiple decades. Like all high-flying stocks, eventually, they come back down to Earth and that’s a good time to nibble on some shares. Shares are looking fairly valued with a PE of around 20 and a yield north of 2.5% with a payout ratio just under 50%. Though the 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 almost 5% resulting from its lower share price, this name has caught my eye for May. Even though the payout ratio under 80% is on the high side. the current dividend appears to be safe at current levels. A forward PE of around 9 also makes this stock appear to be on sale.
Next, I am looking at Verizon Communications Inc. (VZ) once again. This stock is trading with a low PE of about 9 and sports a very juicy yield of about 5.5% and a moderate payout ratio of around 50% making this dividend appear to be very safe going forward.
Finally, I’m taking a look at a name that I haven’t touched for several years, Leggett & Platt, Incorporated (LEG). This is another stock that had a rough start to 2022 and is now sporting a yield of around 4.6% as a result of share price decline. With a comfortable payout ratio of about 56%, the dividend still appears to be safe going forward.
What do you think about my stock considerations for May? As you can see, there are similar names listed here as in April. What are you looking to buy this month? Please let me know below.
Disclosure: Long SBUX, GILD, VZ, LEG
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.