I had a conversation today with an investing peer about where value might be found in the market with the media recently concentrating on record oil prices, credit/debt markets and expected worldwide inflation. While at this moment the sentiment appears to be bleak, there are a number of stocks I currently hold that are trading at attractive valuations which have global scale, top end brands/products/service and very attractive dividend yields. Each of these, in my assessment, could easily return 10-12% on a 12-month basis (including dividends). In an environment where risk and volatility take no prisoners, that doesn’t seem all that bad, does it? What stocks are on your list?
Stocks with forward P/E less than 10x & greater than 3% Yield:
BDK
DAI
PFE
NOK
Stocks with forward P/E around 15x & greater than 2.5% Yield:
CPB
GE
KFT
KMB
LEG
JNJ
TSM
UPS
brad,
Of your list:
As you know I really like GE below $32. For a long term investor this appears to be a great time to get in or add.
I am considered with the growth of PFE, and I’ve never really watched it because the earnings have been far too volatile.
I like UPS, but I am waiting for a large drop in the share price, which I think we could easily see with these oil prices.
I don’t find JNJ to be great value here.
I want to have a closer look at KMB. You should also take a look at CLX.
Interesting.
For UPS, would you anticipate that it no longer trade at the premium over Fedex that it traditionally has been valued at? I have to be honest, I see maybe a $5/sh downside to this stock at the moment after running through the numbers. While the company is likely to internalize some of the increased costs, I think the expectation from their customers will be that its a part of “business” if prices are raised.
GE I’m done adding to, simply fit the screen. PFE is a stock I’ve held for 3+ years, JNJ likewise and I’ll have to look into CLX, but I don’t know how much overlap I’d find when I already hold PG, CL, JNJ, KMB, etc?