January 2025 Stock Watch List

As I'm writing this blog post on Friday, December 6th, the high temperature here in Central Wisconsin is going to reach just 18 degrees Fahrenheit today. Winter is officially about two weeks away, but it already feels like winter is here!

Now that we're almost a week into December, I figure that now isn't a bad time to start looking ahead to next month. Here are three stocks on my watch list for January 2025 (hard to believe 2024 is just about over).

Stock #1: Alphabet (GOOGL)

The first stock on my watch list in January 2025 is once again Alphabet. Those who are curious can find my investment thesis in my November 2024 Dividend Stock Watch List blog post.

Since that time, regulatory risk has heightened a bit, with the Department of Justice's push for GOOGL to divest Chrome. The company remains a financial fortress, though. Growth prospects are still holding up, too. The $175 share price (as of December 6th, 2024) represents a forward P/E ratio of around 19x, which arguably prices in risk here.

Stock #2: Main Street Capital (MAIN)

The next stock on my watch list for next month is Main Street Capital. I haven't covered MAIN in quite a while, but my investment thesis from my March 2024 Seeking Alpha article remains unchanged.

The gist of my bullish sentiment can be explained by a few positive elements. That includes an exceptional annualized return on equity, its distributable net investment income per share exceeding dividends paid, and a record net asset value per share for the ninth straight quarter. MAIN isn't a bargain at the $55 share price (as of December 6th, 2024), but this is another plus for its growth prospects. That's because the company partially relies on share issuances to fund growth. So, issuing shares at a premium to NAV is a boon for MAIN.

Stock #3: Nvidia (NVDA)

The final stock on my watch list in January 2025 is Nvidia. Since I first purchased NVDA in May 2024, I've been gradually working on building my allocation to the stock. It's not hard to see why, either.

NVDA's products are so hot that supply is expected to remain constrained for the foreseeable future. That is driving substantial pricing power and exceptional profit margins for the company. Overall, NVDA looks like it has many more years of double-digit earnings growth ahead. At the $142 share price (as of December 6th, 2024), NVDA is priced at a forward P/E ratio of just 32. That's hardly an unjustifiable valuation for a company of NVDA's caliber.

Concluding Thoughts:

That's it for this blog post. Another month of three phenomenal blue-chip stocks. As capital allocation is concerned, I plan on weighting MAIN around 35% to 40% and GOOGL and NVDA around 60% to 65%. That puts me right around a 3% weighted average dividend yield that I target and also provides loads of growth potential for my portfolio.

Discussion:

Are any of GOOGL, MAIN, or NVDA on your radar for next month?

If not, what are you watching for January 2025?

Thanks for reading. I welcome your comments below!