Hi everyone,
I have a dilema! Currently I have a set of 'investment rules' that I stick to which are focused upon stock valuation and the dividend.
For example to give a brief overview:
P/E below or at 10 year average
P/E below around the 20mark (this varies depending on stock + sector e.t.c)
General uptrend in EPS
A constant increase in dividends.
A payout ratio below 65%
I have found these set of rules have worked very well for my current investments of well established companies such as
MCD
MSFT
XOM
e.t.c
BUT I've been looking at ABF.Plc (Associated British Foods) the owner of Primark.
It has a very large P/E of around 30 but shows signs of rapid growth, low debt (consistently paid down since 2011), a 10% dividend growth rate (5year) and a payout ratio of around 45% (set to decline to only 42.5% next year and then 32% if analysts are correct)
Their product isn't yet saturated with the Primark brand expanding rapidly over Europe and making an entrance into the US. The current European ventures have proved very successful.
The stock has been hit hard lately by the struggle of the Euro and the current Greek situation putting the Eurozone on edge.
Given my investment timescale of around 30-40years is this something I should be taking a risk on? I feel comfortable that the company can continue to expand.
Anyone here 'brake' their investment rules on certain stocks?
Anyone have an opinion on ABF and high p/e high growth stocks?
Any help would be greatly appreciated.
Lewys
I have a dilema! Currently I have a set of 'investment rules' that I stick to which are focused upon stock valuation and the dividend.
For example to give a brief overview:
P/E below or at 10 year average
P/E below around the 20mark (this varies depending on stock + sector e.t.c)
General uptrend in EPS
A constant increase in dividends.
A payout ratio below 65%
I have found these set of rules have worked very well for my current investments of well established companies such as
MCD
MSFT
XOM
e.t.c
BUT I've been looking at ABF.Plc (Associated British Foods) the owner of Primark.
It has a very large P/E of around 30 but shows signs of rapid growth, low debt (consistently paid down since 2011), a 10% dividend growth rate (5year) and a payout ratio of around 45% (set to decline to only 42.5% next year and then 32% if analysts are correct)
Their product isn't yet saturated with the Primark brand expanding rapidly over Europe and making an entrance into the US. The current European ventures have proved very successful.
The stock has been hit hard lately by the struggle of the Euro and the current Greek situation putting the Eurozone on edge.
Given my investment timescale of around 30-40years is this something I should be taking a risk on? I feel comfortable that the company can continue to expand.
Anyone here 'brake' their investment rules on certain stocks?
Anyone have an opinion on ABF and high p/e high growth stocks?
Any help would be greatly appreciated.
Lewys