New to investing - My portfolio (Advice please)

[DividendDragon]

Hi guys I'm 21 and totally new to investing.
I've read a few books on dividend growth and decided that as I'm young I want to grow my wealth over time ready to relax and enjoy my hard work at a later date.

My current portfolio is only worth around £2.5k ($4,000) but I'm looking to steadily invest over the next few years around £3k ($4800) a year.

Here is my portfolio so far. Please don't be afraid to rip it to pieces but also ensure criticism is constructive

Obviously, as I add more investments the %'s will average out as they are currently high.

1 Lloyds Banking Group 21.3%
2 JPM Emerging Markets Class B 20.2%
3 GlaxoSmithKline 13.8%
4 Sanditon Asset Management Ltd European Class F 13.0%
5 AFLAC 12.2%
6 OAO GAZPROM 9.2%
7 Carillion 5.8%

Thanks

Lewys

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EDIT: I know Lloyds don't currently pay a dividend but are set to pay 1p at the end of this year (potentially) and increase thereafter. Check history in regards to 2008 financial crash.

[ChadR]

Can't really give you too much advice on your portfolio since the only one that I own and follow is AFL. I like AFL. It has a P/E of under 10 and a dividend yield of over 2.5%. Payout ratio is also very low (can't remember what it is off the top of my head and where I do my research on stocks has been blocked by our IT dept). AFL does have some risks. I feel that the stock is slightly undervalued to fairly valued.

[EricL]

Sorry but I'm not much help either.

I sold Aflac recently but many others feel its a good value at current prices.

I'm not familiar with any other stocks on the list, although GSK looks like a decent hold with its high yield and reasonable growth.

[Dividend Watcher]

Lewys120, welcome to the forum. I'd recommend introducing yourself in the introductions section in the forum. It's very hard to answer questions without knowing goals, time frame, where you live, what securities can you buy and tax implications are applicable to you. In case you couldn't tell, I believe the majority of posters here are from the U.S. or Canada and as such we may be ignorant of your options.

From your post, I'm guessing you live in Great Britain somewhere, are very young (well, compared to me) and just learning about investing. Personally, I think you're pretty wise to include a value/dividend growth strategy as part of your portfolio. I wish I had at your age.

I don't have a lot of suggestions for you right now but I do have a couple of opinions. Don't listen to my wife yelling in the background about how I have opinions on EVERYTHING and they're worth what you're paying for them.

That being said, I think GSK could be a good holding going forward. I did a quick glance and they've managed a +/- 5% EPS and dividend growth over the last 5 years, P/E is around 15ish and price/cash flow is somewhere around 11. With a dividend yield over 5% here in the U.S., that starts to get tempting. How does these stats compare in the local currency? You may want to look at that.

Unlike some others, I still like AFLAC even though their performance has been mediocre the last few years. At least they've been consistent and conservative in running the business.

As far as GAZPROM, I'd be very leery of Russian-based businesses. Putin is a megalomaniac who seems to have a lot of influence with the oligarchs running the large, Russian corporations. I doubt very much whether shareholders' interests are anywhere near the top of their priorities. But that's me. If you feel comfortable, the energy field can be very profitable since everyone needs heat and lights.

For the rest of your holdings, I could find very little financial information so I can't offer any opinions there.

You do have some fine corporations "over the pond" from us. Nestle, Unilever, BHP Billiton, Total SA, Royal Dutch Shell, Reckitt Benckiser, InBev, Siemens and National Grid come immediately to mind. Sorry, I don't know what your local exchange tickers would be. I did research the grocery chain Sainsbury's that seemed interesting but have no clue on how the locals view the company and how popular they are so shied away from it.

If you can invest in the US or Canada, you may want to look at the Canadian banks, BMO/BNS/RY/CM/TD. Canada also has some natural resource stocks such a Agrium or Potash. You might also want to look at some major multi-national US corporations such as JNJ, PG, CL, XOM, CVX, GIS, GE, UTX or MMM popped into my head as I was writing.

Since I wasted 5 minutes of your time reading this diatribe, I'll leave you with some general ideas. For a foundation, look for companies that make things that people use regularly and have to buy repeatedly -- drugs, fuel or power, food, health & beauty and, to a lesser extent, clothing. Also look at large corporations that make products that enable these businesses; machinery and chemicals used in manufacturing the above. Lastly, look for companies that pay you a portion of their profits in dividends that continue to grow and reinvest them either in the source company or in similar companies.

[DividendDragon]

Not a waste of 5mins at all
Thanks for your feedback.

Future Investments I'm looking at for January is: Kraft

What are your thoughts on Kraft?

[EricL]

(10-02-2014, 09:48 AM)Lewys120 Wrote: Not a waste of 5mins at all
Thanks for your feedback.

Future Investments I'm looking at for January is: Kraft

What are your thoughts on Kraft?

I don't own Kraft but think it should be a fine long term investment. The company doesn't have a very long track record as it was a recent spinoff, but if they are as shareholder friendly as the parent company Altria was, you should be able to expect 5-10% annual dividend growth over the long haul. The 3.8% initial yield is also certainly attractive.

[DividendDragon]

I'd really like to invest in the elderly care sector.
Any suggestions?

Thanks
Lewys


[/quote]
I don't own Kraft but think it should be a fine long term investment. The company doesn't have a very long track record as it was a recent spinoff, but if they are as shareholder friendly as the parent company Altria was, you should be able to expect 5-10% annual dividend growth over the long haul. The 3.8% initial yield is also certainly attractive.
[/quote]

[EricL]

I don't know what your tax situation is with investing in REIT's, but Omega Healthcare Investors (OHI) is a REIT that I own that specializes in healthcare properties, primarily long term care facilities.

Health Care REIT (HCN) and HCP, Inc. (HCP) are others that are invested in long term facilities.

I don't know off-hand any corporation type equities that specialize in the sector.

[CritMass]

Hello, Lewys120, and welcome. Wish I were your age....I would do so many things different, but that's a story for another time and place. I would suggest you tune into the website of "Seeking Alpha". I have received 99% of my financial training / learning from this site. Good luck to you, and may your dividends be frequent and grow steadily. cw

[Kerim]

Hey Lewys -- I agree with most of the posts here so far. I am also not familiar with most of your current holdings, but I wouldn't worry about it too much. Starting to think this way at such a young age is your greatest asset, and it will pay enormous dividends over your life. In your shoes I would focus on learning as much as I can. Develop a list of 20 to 30 target companies that you would love to own -- eventually. The best of the best, ones that will be around and making money in decades. And then take the new money you have to allocate each year and buy whichever of those is presenting the best value at the time. Learn to love corrections, dips, and recessions and be ready to act when they happen. That is when you get rich.

[Joey Batz]

(10-02-2014, 10:16 AM)Lewys120 Wrote: I'd really like to invest in the elderly care sector.
Any suggestions?

Thanks
Lewys

LTC Properties (LTC is the ticker) is a REIT that I will be buying once I have some capital. It looks pretty good to me. They have a portfolio of nursing homes and the like that they rent out to companies that provide care. With the Baby Boomers retiring and people in general living much longer, there will be a huge demand for long term elder care. And since they're a landlord rather than an actual provider, it won't matter if the industry takes any sort of hit as long as these companies are still paying their rents.