Welcome, financially savvy (or not-so-savvy) readers, to another round of investment musings where we explore the deep recesses of ultra-cheap dividend stocks. You know, the kind of stocks that yield more cash than your bank savings account could ever dream of—unless, of course, you enjoy the thrilling annual interest of 0.03%. Today, we dive into three dividend stocks for December that promise fat yields, low valuations, and maybe even a sprinkle of hope. Let’s see if these deals are truly “ultra” or just “meh.”
1. Merck (NYSE: MRK) – The Old Reliable
Merck is the friend who always shows up to the party with potato chips: not particularly exciting, but dependable. This pharmaceutical giant offers a dividend yield of 3.2%, which is about as thrilling as a lukewarm latte, but hey, it beats the S&P 500 average of 1.2%.
Why Merck Might Be Worth It
- Keytruda’s Curtain Call: Merck’s star drug, Keytruda, brought in a casual $25 billion last year. It’s a big deal, but the patent is set to expire later this decade, which means the golden goose is waddling toward the finish line. Cue the corporate scramble to find the next big blockbuster drug.
- New Drugs Incoming: Merck is pinning its hopes on Winrevair, projected to bring in $4 billion (if all goes well), and Gardasil, expected to rake in $11 billion by 2030. Progress, but it’s like trying to fill the Grand Canyon with a garden hose.
- A Discount Store of a Stock: Trading at just 10 times forward earnings, Merck screams “bargain bin,” and that’s not a bad thing if you’re into value plays. Plus, with a payout ratio of 64%, the dividend looks safe—at least for now.
The Snarky Take
Merck is that ex you’re tempted to text because they’re stable and familiar, but the relationship probably won’t set your world on fire. Sure, 3.2% is nice, but can Merck really keep the party going post-Keytruda? If you’re okay with some uncertainty and believe in their pipeline of drugs, this could be your new BFF. Otherwise, swipe left.
2. Verizon Communications (NYSE: VZ) – The Yield Beast
Verizon is the stock equivalent of your old flip phone: reliable, functional, and surprisingly durable in a world of shiny new tech. It boasts a dividend yield of 6.1%, which is enough to make income investors weak in the knees.
Why Verizon Deserves a Second Look
- Steady Dividends, Minimal Drama: Verizon has been raising its dividend for 18 straight years. That’s longer than most of your friends’ relationships, so they must be doing something right.
- Growth Prospects: The company’s $20 billion acquisition of Frontier Communications signals an aggressive push into the fiber market, which could lead to brighter days. But let’s not ignore the $10 billion in debt it’s racking up to fund this endeavor. Bold move, Verizon.
- Cheap as Chips: Verizon trades at a forward P/E of 9. That’s cheaper than your last online impulse purchase. Combine that with potential rate cuts on the horizon, and you’ve got a recipe for stock price appreciation.
The Snarky Take
Buying Verizon is like eating plain oatmeal every day—it’s not exciting, but it gets the job done. Yes, the dividend is hefty, but with debt piling up and single-digit growth, you’ll need the patience of a saint to ride this one out. Still, if stability and income are what you’re after, Verizon might be your soulmate.
3. Albertsons Companies (NYSE: ACI) – The Grocery Underdog
Albertsons may not be the sexiest stock on this list, but it’s the grocery chain equivalent of a cozy blanket on a cold day—dependable, comforting, and not prone to wild mood swings.
Why Albertsons Might Be a Winner
- Safe and Steady: With a beta of 0.3, this stock barely flinches, even when the market throws a tantrum. For risk-averse investors, that’s like finding out your favorite ice cream is on sale.
- Digital Growth: While overall sales grew by a modest 1% last quarter, digital sales surged by 24%. Albertsons may not be the next Amazon, but at least it’s trying.
- Cheap and Cheerful: Trading at less than 10 times forward earnings, Albertsons is another bargain-bin play. If its proposed merger with Kroger goes through, this grocery chain could become a serious industry heavyweight.
The Snarky Take
Albertsons is like that one friend who’s always on a budget but manages to pull off great outfits from the clearance rack. It’s not flashy, but it works. If you’re looking for a stock that won’t give you heartburn, Albertsons is a solid pick. Just don’t expect it to moon.
Final Thoughts: Are These Stocks Really "Ultra-Cheap"?
Look, calling these stocks “ultra-cheap” might be a bit of a stretch. They’re more like the discount section at a fancy store: still decent quality, but the markdown isn’t as dramatic as you’d hoped.
- Merck is a pharmaceutical stalwart, but it needs to prove it can survive without Keytruda’s blockbuster status.
- Verizon offers a juicy dividend, but its debt and tepid growth prospects make it a bit of a gamble.
- Albertsons is the safest play here, but safety doesn’t usually come with fireworks.
If you’re hunting for income and can tolerate a little uncertainty, these stocks could be worth a closer look. Just don’t expect them to light up your portfolio overnight. After all, ultra-cheap doesn’t mean ultra-exciting. And hey, if all else fails, there’s always that savings account with its thrilling 0.03% yield.
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