My Top Dividend Stock To Buy In December
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Although we still have a few more days left to finish out the month, November marks my third straight month of declines in the portfolio.
You know how that goes, though. Ebbs and flows.
Source: Snowball Analytics
The silver lining is that this continued pressure on share prices is creating some great buying opportunities, and I’ve been doing my darnedest to take advantage of them.
In my opinion, one of the best opportunities right now is Zoetis (ZTS), which is my top dividend stock to buy in December. You can learn about some of my other top stock picks here.
Now, I don’t want to beat a dead horse by talking about Zoetis again — because I’ve covered it a lot on the channel as of late — but this stock just cannot catch a break.
The share price has been sliding pretty much all year long, and things only got worse after they reported Q3 earnings earlier this month. The market absolutely hammered the stock, sending it down over 16% in a single day and leaving it down about 12.5% over the past month.
Source: Investor Presentation
The big headline behind such a strong reaction was slower growth. Zoetis reported about 4% organic revenue growth for the quarter, which is solid, but came in below what analysts were hoping for.
Management also slightly lowered their full-year sales guidance to 5.5% to 6.5% organic growth, which once again, is still respectable — it’s just not what investors have been used to in recent years.
That deceleration definitely caused some concern, but there was one more issue that probably spooked investors even more. Librela — their major osteoarthritis treatment for dogs — saw another big decline in sales this quarter, leading to an 11% drop in their entire OA segment.
Source: Investor Presentation
This has been happening for a few quarters now, and it’s mostly tied to safety rumors circulating on social media that have made some vets and pet owners hesitant.
Zoetis is actively working to clear this up with better education, closer communication with veterinarians, and additional clinical studies, and they expect Librela to return to growth in 2026. Hopefully it plays out that way.
Now, I may be biased since Zoetis is one of my largest holdings, but I think the selloff was way overdone. There wasn’t anything in this quarter that changed my long-term outlook for the company, which is exactly why I’ve been buying as many shares as I can on the way down.
Just this month, I added 11.5 new shares at an average cost of $122.18, which brought my overall cost basis down from around $152.50 per share to about $147.00.
Source: Snowball Analytics
In my opinion, what’s getting lost in all the earnings noise is that the underlying business is still very healthy.
Earnings per share still grew about 12% organically. The company has generated twice as much free cash flow as it’s paid out in dividends so far this year. And every major segment outside of osteoarthritis is still growing.
The Simparica franchise was up 7%. Dermatology grew 3%. And the Livestock segment — which is a huge part of the business — posted double-digit growth for the third year in a row.
Source: Investor Presentation
When you zoom out, the sky is far from falling on Zoetis. It really just seems like one product is creating temporary hysteria while the rest of the company continues to chug along.
That disconnect is exactly why I think there’s a lot of opportunity here. If anything, this substantial drop in share price just gives long-term investors a chance to buy a great business at one of the most attractive valuations we’ve seen in years.
With that said, ZTS isn’t the only good buying opportunity on the market right now. There are quite a few others worth paying attention to, and I want to hear from you: Which discounted stocks do you have your eye on as we make our way into December? Write to me here and let me know.
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IN MY PORTFOLIO 📈
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SINCE YOU ASKED 💬
“What do you think would be the best dividend ETF for someone who is just starting out?"
- Frosty | YouTube
This is an awesome question. And honestly, with how prevalent ETFs have become, it’s getting more difficult by the day to narrow down your options.
Believe it or not, there are actually now more ETFs than investable companies in the stock market, and the gap keeps widening every year.
When it comes to dividend ETFs, there are a handful that consistently stick out. The big things I look for are pretty simple: a low expense ratio (because fees are no fun), strong dividend stats (ideally a healthy mix of yield and growth), and a solid track record of total returns over time.
You want something that not only pays you, but also grows your income and appreciates in value. With that in mind, a few funds worth looking into are SCHD, DGRO, DGRW, VYM, VIG, FDVV, and HDV.
You definitely don’t need all of them — one or two will do just fine. And before you decide to buy more than one fund, check how much overlap there is between them (the lower, the better). You can check that for free here.
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