06-01-2015, 04:32 PM
(06-01-2015, 04:13 PM)800peace Wrote: I totally agree that the payout ratio can lead due-diligence astray. I actually created a thread called "My Beef w/ Payout." I did find the association between p/e and payout interesting and had to hypothesize and experiment. It wasn't the pot of gold I was hoping, but it is helping me tackle the energy and financial sectors, (I find these sectors hard to analyze).
You aren't alone. Energy is difficult due to the cyclical nature. I'd recommend focusing on high credit ratings and good long term track records in the energy sector. It takes a strong stomach to hold during the downturns like we are currently experiencing, but if you are able to add on pullbacks and focus on quality, the reinvestment of dividends are a nice bonus when prices rise once again.
I also don't own much for financials either due to difficulty in valuing them. The only bank in my personal portfolio is Wells Fargo (WFC) and I also have some Ameriprise Financial (AMP), which is an insurance/asset management company.