Monday, September 23, 2013

MH10

So I've sorted through my shortlist and put in even more stringent criteria compared to the shortlisting. Here are my picks.

ExchangeBB TickerName (BB)Category
STIOCBCOversea-Chinese Banking Corp LtdFinance
ASX50WPL:AUWoodside Petroleum LtdPetrolchemical
ASXMTS:AUMetcash LtdCom Staples
HK386:HKGChina Petroleum & Chemical CorpPetrolchemical
AMXECMPA:NAEurocommercial Properties NVReal Estate
CAC40DG:FPVinci SAConstruction
MDAXHNR1:GRHannover Rueck SEFinance
SMISCMN:VXSwisscom AGTelecomm
FTSE100MRW:LNWM Morrison Supermarkets PLCCom Staples
FTSE100SBRY:LNJ Sainsbury PLCCom Staples

Basically, all these companies have the following criteria, in order of importance:
  • Minimum 1 stock per exchange
  • Maximum 2 stock per exchange
  • Dividend yield over 3%
  • Dividend growth over 5 years
  • Reasonable payout ratio, less than 70% *1 exception
  • P/E ratio is lower than exchange average
  • Earnings growth positive over 5 years *1 exception
  • Price to Book below 2 *1 exception
  • Market cap over 1B
  • Diversify over sectors if possible
Payout ratio is 92.74% for Metcash Ltd
Earnings growth over 5 years is -3.2% for Swisscom AG
Price to Book ratio is 2.0064 for Woodside Petroleum Ltd

Basically, these constraints are because of lack of choice within their own exchanges, as well as the need to diversify across sectors.

Right now, I'm looking at 4.32% dividend yield off these guys, which should grow about 8.5%, along with EPS to grow about 6%. They have a P/E of 10.5, which makes them in terms of P/E, about 65% cheaper on average to their own exchanges.

Honestly, I think this looks great.

I am going to monitor prices as of today, and maybe until the end of the year? If I find that my stock screening criteria to be pretty good, perhaps I will actually invest money into it. Now, I'll just update as and when, to let you know the progress. Since I theoretically cannot buy a lot of these stocks with a small investment, due to some of them have large and lumpy share prices, I'll just give out the percentages. Let's just assume a $1M investment?

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