Sell in May and Go Away
Sell in May and go away? The same question pops up every year. In fact, this time last year we asked the same question… Should we liquidate now and use our summer sipping ice teas by the seashore, or should we continue to be active in the market?
It’s of course a personal choice. Some of us just can’t step away from managing our portfolios no matter what the situation… others barely ever have a look.
From Memorial Day to Labor Day, the market has traditionally been a barren wasteland. Over the past twenty years, all major indexes have been relatively flat during this time period with only the NASDAQ and S&P Tech sector indexes up with any significance (both averaging about 3%).
Last May we covered two stocks that we can “set it and forget it” in May, and walk away for the summer. So where are they this May? A full year later…
Last May we looked at MO and VZ. This is what we said back then:
Our first boring big cap is Altria Group Inc. (MO). Many of us are familiar with Altria as one of the “vice” stocks that investor’s flock to in times of uncertainty. MO is all about cigarettes. Whether you morally object to smoking or not, the stock is very stable and pays out nicely.
We’re looking at a $100 Billion company that’s earning $2.56 per share. They are yielding 4.1% on $2.08 per share. Yes, they’re paying out less in dividends than they earn, meaning that dividend looks very safe… there’s little chance of a cut here.
At this time last year, MO was trading at $50 a share. As of this writing, it’s up to $63 per share (up 26%) yielding a robust 3.5%…
Looks like a huge winner! The other company, Verizon, VZ, well let’s have a look.
Last year, VZ was trading at $49 a share, yielding 4.5%.. Today, $49 a share, yielding 4.4%. So while not a great winner like MO, VZ has paid its dividends over the year…
They both remain good, long-term dividend payers to consider adding once again before summer.