Cerina Jen

Cerina Jen
Contributor since: 2012
i bought ABT because it was a diversified healthcare business, and it was undervalued.
with the split, it loses much of its diversification, and the run up means it is no longer as undervalued as before either.
i havent sold my position yet, but am def. considering it as the investment thesis is weakening.
something is really messed up with your BNS yield and PE in your chart :P its def not at 49x and 150% payout unless you're counting some one time items.
i prefer CNI and RCI out of all these. they present the most compelling cases when taking into account both valuation and dividend growth potential.
i like MGA and THI as well as businesses, but at current stock prices, THI seems a bit lofty and MGA's yield + growth rate isnt where i'd like it to be. i look for yield + div growth in the mid teens mainly :)
great names overall though, and proud to be canadian!!
i personally dont own Apple at the moment directly, but have exposure via my company RRSP (equiv of 401k) index funds
thank you!
thank you! :)
thank you :)
personally i have around 6-10% per core holding, and 6 core holdings. i hope to go into more detail into how i allocate my portfolio in the future.
southern is a utility company. i didnt mean to come across as saying these picks were undervalued or anything. i just wanted to use them as examples :) if i had to pick 1 or 2 to buy right now i'd probably go with JNJ and maybe PG as being somewhat under/fair valued.
thanks!!
hi Zach
that is an excellent point.
there are many businesses that will benefit from the emergence of the global middle class, definitely more than just the ones i talked about.
in China for example (i'm just using this as an example since i have some personal experience there), there is china mobile (CHL), china unicom (CHU), china telecom (CHA). CHL is the biggest by subscriber and coverage area, but CHU has the most compatible and best 3G network with foreigners. I buy a local sim card and use china unicom's 3G service every time i am in china visiting.
one word of caution about investing in chinese companies. the government can turn on a dime, reassign bands/networks and change your entire investment thesis. in the case of china mobile , they also force the company to use home-grown technology, thus making their network incompatible with many foreign phones (like my own galaxy s2)
thanks for reading! :)
i guess you could say i am a novice income investor :)
unlike many of the income investors on SA, i'm relatively new, and don't have as many rules or guidelines. i generally just try to look for businesses with promising prospects that are valued attractively.
most of my investments do pay dividends, but i do not use an auto-reinvestment plan. i just let them build up along with new funds and then buy something that is attractively valued.
thank your for the encouraging comments Dave
i will try to make time to write more articles :)
thank you :)
thank you for the kind comment!
i dont have a lot of time to write, but i will try to make time for it :)
i agree that many defensive names are not undervalued currently. my reason for choosing them for the article was because they are big and well known to everyone
as the blog i am helping with progresses, more in depth topics will be discussed. i hope to learn much from comments from here as well as my friend's writings, as i'm still young and relatively inexperienced!
thanks!
i totally agree that the 2 are very similar. the main differences to me are that it is easier to leverage up in real estate, but easier to diversify among different sectors in dividend equities.
i believe a long term investor should have exposure to both, and not be solely in one or the other. the two have some very nice synergies that are very good to have, in the long run, for a young person :)
i own EXC and XOM myself, but i've been rethinking my position in XOM lately after the rise in my holdings (bought it in the low 60s).
i think someone mentioned that XOM's historical dividend increase rate going back 20-30 yrs is basically 6%, which is kind of low. their management is generally competent, but i wish they'd emphasize the dividend more, and the share repurchase less.
at 2.1% yield, 6% div growth rate, i feel i could do better elsewhere, that i can get either better yield, and similar div growth rate, or better growth rate, at that yield....
do you have any thoughts on this? 'this' being the observation that Exxon's current yield + growth rate puts it in a low yield low growth rate category that leaves much to be desired...
thanks!
-Cerina
i'm in the same boat as you! i have a hard time determining when to sell as well. :(
Telus and Rogers actually offer some pretty interesting valuations at the moment. they both yield 4%+ and seem committed to growing the dividend at ~10% annually. Their dividends seem very sustainable and have plenty of room to grow even in a low revenue/low EPS growth environment.
i agree with you that all 3 of these businesses do not seem overvalued. depending on who you ask and what metric you use, they may even appear undervalued :)
just a minor correction. the Rogers (RCI) dividend was raised from 35.5 cents to 39.5 cents, 11.2% increase
nice to see some canadian names up there :)
Dave,
yes it is a bit of a shame that they are not as consistent about their div growth as we would like :(
I try to zoom way out and look at their CAGR during a 10-15 year period. I've noticed many companies's rate of increases are rather cyclical. Exelon in particular seems to value the importance of at least maintaining their dividend stream, but they seem a bit shy about always increasing it each year (even if by a couple % to keep pace with inflation), which ends up resulting in some years where there is no increase, and other years where they raise significantly by low/mid double digits .
i feel the extreme discount i'm getting with prices down at these levels will compensate me for the short term lack of dividend growth with bigger growth down the line (maybe some wishful thinking? =) ), especially since the funds came from sale of Exxon, which is down around 2.1% now and actually has a CAGR over 10-15 yrs that is lower than Exelon's. at Exxon's mid single digit CAGR (i think around 6%), its like i'm getting a ~15 year head start with Exelon's 5.4% yield and similar CAGR
i'm actually thinking of paring down my Exxon position even more these days. the yield + yield growth really feels lacking and leaves this girl with a feeling like something is missing :(
-Cerina
i bought some Exelon myself today for my RRSP (canadian version of 401k). their dividend hasnt been growing lately, but i feel like im overreaching on some of the more growth oriented dividend stocks. i figure the extra yield will make up for the lack of short term dividend growth, especially as the yield gap continues to widen. too bad just missed the latest dividend :(
the PEP dividend should look quite a bit better in a few months. they're scheduled to increase it. shares bottomed out in 2011 around 3.4% yield based on 51.5 cents quarterly dividend, which is about the same yield level as the current price, if the div gets raised to 54 cents (which i think is quite conservative)
GIS and K is a toss up for me the valuations and debt levels seem similar. GIS seems like it has a more diverse basket of brands, which is what i prefer, but neither company has brands with superb pricing power. i think consumers attachment to Green Giant frozen vegetables or Yoplait yogurt is not as strong as their attachment to a Coke, Pepsi, or even Doritos
a lot of hard working americans with pension and retirement funds would benefit from a repatriation tax holiday and the subsequent dividend increases.
Taking a step back and looking at the overall picture reveals that as long as you reinvest the dividends paid to you in another income producing asset, the compounding effect is similar. It does not necessarily have to be DRIP'd back into the same equity, although that often involves less work and less fees, and does it more regularly.
it reminds me of the quote from an old book someone introduced to me. I think it was called the richest man in Babylon. In that book, there's a reference to thinking of your money as if they are your children. You want it to work for you, and you want the children of your children to work for you, and so on.
It doesnt quite matter who the child is or which child of mine has the kids, as long as they all end up working for me :)
as someone still in accumulation phase, i hope JNJ doesnt move for another 10 years :) give me more time to accumulate more of it
these 3 technology companies are the only ones i view as worth owning in the long run. all 3 provide things used by many businesses (hardware from Intel, software from Microsoft, and services from IBM) regardless of what kind of business you operate. They're also somewhat shareholder friendly, compared to other tech companies.
There is always the risk something revolutionary will come along and completely change the game, which I think makes owning attractively valued, defensive, and shareholder friendly technology businesses all the more important.
David, maybe my parents were onto something when the named me Cerina :P they said they had planned another name for mre, but i didnt cry much after i was born so they changed their mind :)
I find that getting paid dividends once every quarter is a nice way my assets and businesses remind me and my clients of why I own them. :)
I often find myself eagerly awaiting the next dividend payment, or dividend increase announcement. reminds me of the Christmas eve rush, when waiting to find out what santa brought this year :P
okay. fair enough. it would have been great if you provided a few different discount rate scenarios and the resultant valuations.
thanks for the write up anyways!! :)
agreed, i like the way you split up the businesses.
i was wondering if it would make sense to drop the 1998-2002 period for MSFT and INTC? the data points from that period appear to be significantly impacting the "normal PE ratio".
can you elaborate on why your discount rate used is 20%? that seems extreme to me. Are you expecting a typical investment in today's environment to return 20% annually compounded?
while it is nice to be conservative, i wonder if 20% is rather extreme?
David, there are so many types of chinese dough + filling inside foods, even i'm not sure which one you are referring to :P
my favorites are boiled dumplings (they look like perogies but with meat/veggie filling inside), and the soup dumplings you can often find in dim sum restaurants. i usually dip them with traditional chinese vinegar with a bit of garlic spicy sauce. you should try it. i like it better than soy sauce :)
totally agree that some parts of chinese food and italian food are quite similar! in fact if you goto hong kong, there are little local restaurants that serve spaghetti with mushroom / black pepper sauce and a chicken steak on top. its like a mixture of chinese + italian. quite interesting
there is a story among chinese about the origins of pizza. the story says that after marco polo visited china, he tried to replicate the steamed chinese buns (with filling inside) but couldnt get it to stick together. while cooking, the bun came apart and it became pizza =P
(for the record, pizza's history pre-dates marco polo. its just a joke!)
probably earnings release and conference call
i see a lot of industrials near the top of the list, and quite a few defensive blue chips on the last page
my favorites from the first picture are EMR, ITW, and WMT. off the 3rd page i prefer JNJ over the other defensives. it seems to be relatively cheaper.
i agree with you that i do not think MCD is overvalued, but i am considering selling to use the capital elsewhere where valuations seem more attractive.
thanks!