The holiday season is almost upon us. The markets continue to rise to all-time highs and even the perma-bears are throwing in the towel and joining in the rising frenzy. No one really knows where the market will go from here, but there have been a lot of calls of a severe corrections from various analysts. Rise or fall, I will be staying invested while maintain some cash position in my portfolio. If there is a correction, it will provide me with an opportunity to pick up more stocks at a discount.
The rise of the stocks has resulted in slim pickings for good value in the US market. However, I have been recently looking at the forward P/Es of my holdings to get a clue of how the stocks are currently priced based on future earnings (read my post about this topic
). From the initial look, it appears that Archer Daniels Midland (ADM), Qualcomm (QCOM), The Southern Company (SO) and Thomson Reuters (TRI) have the largest difference between current P/E and Forward P/E.
Archer Daniels Midland (ADM) manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol and other value-added food and feed ingredients; and processes oil-seeds, corn, wheat, cocoa and other agricultural commodities. ADM also engages in futures commission merchant business. ADM is is a dividend champion which has been raising dividends for 38 years. ADM has a 5-yr dividend growth rate (DGR) of 8.8% and a 10-yr DGR of 12.3%.
Qualcomm (QCOM) designs, develops, manufactures and markets digital communications products and services base don CDMA, OFDMA and other technologies. QCOM is the leader in ARM-based processors which are found in the bulk of Windows, BlackBerry and Android devices. QCOM has been raising dividends for 11 years and has a 5-yr DGR of 12.3%
The Southern Company (SO) operates as a public electric utility company. SO is involved in the generation, transmission and distribution of electricity through coal, nuclear, oil and gas, and hydro resources in the states of Alabama, Georgia, Florida and Mississippi. SO has been raising dividends for 12 years; has a 5-yr DGR of 4% and 10-yr DGR of 3.7%.
Thomson Reuters (TRI) sells electronic content and services to professionals, primarily on a subscription basis. The company operates in four segments: Financial & Risk, Legal, Tax & Accounting and Intellectual Property & Science. TRI has been raising dividends for 20 years; has a 5-yr DGR of 5.5% and 10-yr DGR of 6.1%.
I am also considering various stocks that are not currently in my portfolio.
Illinois Tool Works (ITW) and Parker-Hannifin Corp (PH) are a play on the industrial sector. I am currently under-invested in the industrial sector and am looking for more exposure on that front. ITW and PH are both dividend champions who have been raising dividends for 39 and 57 years respectively. ITW has a 5-yr DGR of 9.9% and a 10-yr DGR of 12.6%. PH has a 5-yr DGR of 16.2% and 10-yr DGR of 12.9%.HCP Inc. (HCP) invests in properties serving the healthcare industry including sectors such as senior housing, life sciences, medical offices, hospitals and skilled nursing. HCP is a dividend champion that has raised dividends for 28 years; has a 5-yr DGR of 2.4% and a 10-yr DGR of 2.1%.
Kinder Morgan Inc. (KMI) owns and operates energy transportation and storage assets in US and Canada. The company owns an interest in or operates approximately 75,000 miles of pipelines and 180 terminals. KMI has a reputation for its high payouts and has a 5-yr DGR of 10%.Procter & Gamble (PG) and Unilever PLC (UL) are giants in the consumer packaged goods field. PG has five segments – beauty, grooming, healthcare, fabric care and home care. UL has four segments – personal care, foods, refreshment and home care. PG has been raising dividends for 57 years; has a 5-yr DGR of 10.2% and a 10-yr DGR of 10.8%. UL has been raising dividends for 25 years; has a 5-yr 7.07%.
Walgreen Co (WAG) operates drugstores in the US. The company provides access to consumer goods and services, pharmacy, health and wellness services across the US. WAG is a dividend champion that has been raising dividends for 38 years. WAG has a 5-yr DGR of 23.7% and a 10-yr DGR of 21.2%.
Realty Income (O) is a REIT that invests in commercial real estate across the US. O has long-term (10-20 year) leases with tenants that are spread across 200 companies and 47 industries. O has been raising dividends for 19 years; has a 5-yr DGR of 1.5% and 10-yr DGR of 4.2%.
Textainer Group Holdings (TGH) engages in purchase, ownership, management, leasing and resale of a fleet of marine cargo containers worldwide. TGH was recently downgraded from Outperform to Market Perform, but there is still plenty of potential for an upside. TGH is a Dividend Challenger that has been raising dividends for 7 years and has a 5-yr DGR of 52.1%.
Index – China ETF
I am also considering adding a new index fund to my portfolio to track the Chinese market/economy. Read about my comparison of available ETFs here
What are your thoughts on the stocks mentioned here? Do you own them or are they on your watchlist?
Disclosure: My full list of holdings are available here