Today I will share with you some of my evening thoughts…
Firstly let’s see Valuation table here. If only it works properly (I have no idea why CL is not updating, maybe some issue with data provider) then on the bottom you can see some valuation metrics. Especially you can see a difference between average price of shares vs my investable level (currently about 23%). Surely I am not updating investable levels for every company on a daily basis, but on the other hand companies pay dividends, which should also change investable level. Anyway, the case is – this level is very stable (diversified portfolio) and generally I still think that shares are not cheap.
WMT and ADM (both long) were for a long time traded with discount (low difference vs investable level), but happily it has changed. As you can see currently there are only two companies traded with difference to investable level less than 10% (GWW and CAH), but on the other hand both are paying not so high dividends. Also for GWW after a last note I was thinking to reduce investable level…
So for now I see no interesting opportunity to buy and I just keep my cash. Moreover for ADM and WMT when share prices come to my take-profit level I will sell them.
On the other hand time between reporting season is a good time to find some new ideas. I was thinking about good high quality companies from other countries and I found an useful website with UK Dividend Champions (here). I took some data from attached on website excel (Dividend Life it is an awesome work you did!) and I see that there are much less companies with a long history. On the other hand I see some place for diversification, as there are no US DIvidend Aristocrats from Aerospace & Defence or Travel & Leisure industry.
|Cobham plc||COB||FTSE-250||Aerospace & Defense||28|
|City of London Investment Trust plc||CTY||FTSE-250||Equity Investment Instruments||28|
|PZ Cussons plc||PZC||FTSE-250||Personal Goods||27|
|Spirax-Sarco Engineering plc||SPX||FTSE-250||Industrial Engineering||27|
|Cranswick plc||CWK||FTSE-250||Food Producers||27|
|The Merchants Trust plc||MRCH||FTSE-A/S||Equity Investment Instruments||26|
|Spectris Group plc||SXS||FTSE-250||Electronic & Electrical Equipment||26|
|Rotork plc||ROR||FTSE-250||Industrial Engineering||26|
|Young & Co’s Brewery plc||YNGA||AIM-100||Travel & Leisure||26|
The list of Contenders/Challengers is significantly longer, but for now I do not want to take excessive risk – think that 10 years is a long time, but on the other hand it is only last crisis an I expect company to show that it is able to raise dividend even “forever”.
As rightly pointed by No More Waffles (NMW, here) for other European countries there is a case of Euro introduction and how should dividends from before-Euro to Euro be compared (and was there really a growth of dividends?). Anyway I found his spreadsheet also very useful, as there are some companies with 10Y+ history (a little bit too short, but anyway), 3% dividend yield (good) and not so high payout.
Also in Switzerland there are some interesting large caps companies like Novartis or Roche, with dividend yields around 4% and around 20 years history of growing dividends.
No idea about Asia…
So summing up, building a portfolio only in US is a good idea, but maybe it is even a better idea to look for investment ideas also in another countries (not sure about currency/tax issues whether it is not a problem). Do you know/invest in non-US based companies? What is your strongest investment idea? Why is that so?