My Top Dividend Stock To Buy In December
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The holiday season is officially here, and with it comes one of the busiest travel periods of the year. According to tax and advisory firm PwC, 46% of consumers are planning to travel during the 2024 holiday season.
Considering today is Thanksgiving (Happy Thanksgiving!), some of you are probably part of that statistic—and let’s be honest, you probably weren’t exactly looking forward to the airport experience on your way out of town.
When the holidays hit, the airport tends to be more like a zoo. Long lines, crowded security checkpoints, and everyone rushing to get to their gates on time—it’s enough to stress out even the most zen traveler.
This is where Clear Secure (YOU) comes in, which is my top dividend stock to buy in December (you can learn about some of my other top picks here). Clear exists to make travel smoother, faster, and more enjoyable, and during a season packed with pushy travelers and packed terminals, its value proposition feels stronger than ever.
Instead of being just another sardine in the TSA line, Clear members get access to their own dedicated lanes. A quick biometric scan—like a fingerprint or face scan—confirms their identity, and a Clear representative personally escorts them directly to the front of the security screening area.
It’s essentially VIP treatment, transforming what’s often a clunky and frustrating process into a much faster and more convenient experience.
Now while airports are Clear’s bread and butter, their services go beyond aviation. You can find Clear’s identity verification terminals at an increasing number of stadiums and event venues around the country.
Here in Las Vegas, for example, Clear is available at Allegiant Stadium and T-Mobile Arena, offering the same streamlined experience for sports fans and concertgoers alike. Whether you’re catching a Raiders game or heading to a Red Hot Chili Peppers show, Clear helps you maneuver around the madness and get right into the venue.
Now many of you probably already know this, but Clear Secure is actually the newest addition to my portfolio. I started buying shares a couple of months ago, and have been dollar-cost averaging into my position every week since then, which has become a lot more fun after the stock’s recent and substantial pullback.
Source: Snowball Analytics
Over the past month, Clear’s share price has dropped 28.5%, following the company’s quarterly earnings report. But here’s the interesting part: the earnings were actually pretty impressive, at least in my opinion (you can read my full earnings breakdown here).
Revenue for the quarter was up 24% year-over-year, growing by $38 million compared to the same period last year. And for the first nine months of 2024, revenue is up 27%.
Earnings per share (EPS) also saw substantial growth, climbing to $0.30 this quarter from $0.21 a year ago—a 43% increase. Over the nine-month period, EPS is up a whopping 124%!
So, if the numbers looked that strong, what caused the drop?
The answer lies in free cash flow. For Q3, Clear reported a free cash flow loss of nearly $38 million, which understandably prompted some investors to make their exits.
With that said though, this loss was not unexpected. In fact, Clear had told us last quarter that free cash flow would be negative in Q3, and there’s a clear explanation for why.
Clear has a partnership with American Express, which allows AmEx cardholders to receive discounts—or even full reimbursement—on Clear memberships. While Clear recognizes revenue from these memberships, they also pay a portion of that revenue back to AmEx every year, and that payment takes place in the third quarter of each year.
Now this obviously hurts the free cash flow for the quarter, but the partnership is ultimately a win-win. It helps Clear attract more customers while giving AmEx an additional perk to offer cardholders, many of which are frequent travelers.
Despite the free cash flow loss this quarter, when you zoom out and look at the bigger picture, Clear’s free cash flow is still seeing crazy growth. For the first nine months of 2024, the company has generated nearly $150 million in free cash flow—a 37% increase compared to the same period last year.
From where I’m sitting, Clear is showing multiple signs of a business that’s firing on all cylinders. This means that for long-term investors, a share price drop like the one Clear just experienced isn’t a setback—it’s an opportunity.
Of course, it’s always important to understand why a stock’s price has dropped. But in Clear’s case, the pullback is tied to a temporary and well-communicated factor, not a fundamental weakness in the business.
With that said, I’ll be putting my money where my mouth is with Clear, and plan to continue dollar-cost averaging into it for the foreseeable future.
And now I want to hear from you: Which discounted stocks do you have your eye on for this upcoming month? Write to me here and let me know.
Dividend Investing Democratized
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I use Seeking Alpha every single day, and have done so for years now. It's my go-to website for everything related to stock research, and it's been essential in helping me become a better investor.
Whether I'm looking up dividend stats, reading the news, listening to earnings calls, or just want to find out what others are saying about a particular stock, Seeking Alpha has it all (for free), and the Premium version is even better.
The Premium version gives you unlimited access to Seeking Alpha's library of articles, personalized portfolio tracking tools, and a ton of other essential features for the dedicated dividend investor. You can see the full list of Premium features here.
Right now, Seeking Alpha is offering a 7-Day FREE Trial of their Premium platform so you can try it out risk-free. The best part is, if you end up loving it (which if you're like me, you definitely will), you'll automatically get $25 OFF of your annual subscription.
It's normally $239 for the year, but with the discount it comes out to $214. I've been using it for years, and have definitely found it to be worth the money.
If nothing else, it's at least worth checking out the 7-Day FREE Trial.
IN MY PORTFOLIO 📈
Portfolio performance provided by Snowball Analytics
ICYMI 🎥
The Stock Market Is Starting To SCARE ME - Here’s Why
My dividend portfolio is up around 30% just in the last year, which is great because it means we're building wealth. On the other hand, these crazy gains are starting to scare me, and I'm telling you why in this video.
CAREFULLY CURATED 🔍
📺 Numbers With Nina - Nina Chimangha immigrated from Africa to the U.S. and completely transformed her finances by paying off $120K in debt and building a $500K portfolio in just four years—proving that sometimes the only thing standing between you and financial success is you. No excuses my friends!
🎧 Beware of Juicy Yields - I don't know why Seeking Alpha thought it fitting to have me on their Investing Experts podcast, but here we are. Tune in to hear why I’m so passionate about dividend investing and a few of my favorite dividend stocks.
📚 The False Dividend Dichotomy - I don’t typically share older articles here, but I think the topic of last week’s newsletter is essential for every investor to understand. In case you missed it, I highly encourage you to give it a read.
SINCE YOU ASKED 💬
"I'm 19 years old and I just started investing in stocks. What are the top 3 dividend stocks you would recommend?"
- Mason | Email
For brand-new investors, I’m usually a big advocate of just starting with ETFs. They’re simple, hands-off, and instantly give you diversification—which, in my opinion, is important when you’re first starting out.
With that said, I know some of you want to dive straight into individual stocks. You want to try your hand at picking companies right out of the gate—and trust me, I get it. I was the same way when I first got into investing.
Now while I can’t tell you which specific stocks to buy (because it's a very subjective thing, and I can't tell you what you think is a good investment), I can give you three key things to look for when evaluating potential investments:
1. A track record of growth in sales, earnings, and free cash flow. At the end of the day, you want to invest in businesses that will be bigger and better tomorrow than they are today. Look for companies with a history of growing these metrics—it’s a simple enough thing to do (especially when you use Snapstock) and it's a great way to filter for strong performers.
2. A reliable and growing dividend history. Basically, you want a dividend history chart that shows the dividend per share going up over time. Try not to get too hung up on the dividend yield, especially if you're only 19 years old (easier said than done, I know). You have plenty of time to let your dividend snowball grow and compound.
3. Most importantly, invest in businesses you understand. If you can't wrap your head around what a company does or how it makes money, it’s not going to be a good investment for you.
This is one of the reasons I’m such a big fan of dividend investing—many of the great dividend payers are simple, easy-to-understand businesses. Think about companies like McDonald’s (MCD), Procter & Gamble (PG), or Coca-Cola (KO). You're already familiar with those businesses, so you know how they make money and can conceptualize why they’ve been successful for so long.
At any rate, start with these three criteria when you’re hunting down dividend stocks to add to your portfolio. These will help you hone in on businesses that are growing, rewarding shareholders, and (most importantly) are ones you can truly understand.
Have a question? Ask me here to see it featured in an upcoming newsletter.
HOT TAKES 🔥
In last week's newsletter, I asked readers if their portfolios have more offensive players, defensive players, or if it's pretty evenly split. Here are some of the responses:
Matt said: I have a little bit of both. As far as my offensive players go, I would say KR, V, MSFT, WSM, NEE, and AVGO. For defensive, I have PG, CVX, O, PEP, MAIN, and OBDC.
Danny said: I am focusing on income and growth ETFs, and I have aprox 81k in 6 positions in order of market value: VOO, SCHD (sold VYM at a profit and moved it here), QQQM, KO, O, XLU
Kyle said: As I'm still learning, I am trying to create a balanced portfolio between consistency & reliability of dividend income and growth. I have some stocks like KR (Kroger) and CSCO (CISCO - technology) for more growth exposure and KO (Coca-Cola) for more tried and true stability.
LAST WORD 👋
I have a BIG announcement to share!
Over the past few weeks, Ari Gutman and I have been getting together to chat about investing. These conversations are completely unscripted, unedited, and are honestly just two friends trying to make sense of this whole investing thing.
These conversations have been so much fun that we’ve decided to make it official! We’re launching a brand-new, weekly show called The Deep End.
Subscribe to the channel
The Deep End is your weekly dive into the world of investing. Every week, we’ll come together to share the lessons we’re learning, the challenges we’re facing, and the insights we’re gaining as we work toward building wealth.
For now, episodes will be posted on YouTube, but we’re already working on adding them to platforms like Apple Podcasts and Spotify—so stay tuned for that.
If you want to follow along, subscribe to The Deep End on YouTube here. Ari and I will post one final episode on his channel today (Thursday, 11/28), but starting next week, all episodes will live on The Deep End’s new channel.
And here’s the best part: we want to answer your questions in every episode! If there’s a topic you’d like us to discuss, just reply to this email and send your ideas my way.
