Author Topic: Sector PE ratios.  (Read 8693 times)

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Sector PE ratios.
« on: July 02, 2015, 07:37:37 pm »
With my recent research in what stocks to buy as I am mostly in cash, I thought I would share this list of Sector PE ratios.

ALSI. 18
Health Care. 26
TOP 40. 18
Industrials. 21
Industrial 25. 22
Auto & Parts. 12
Banks. 14
Consumer Goods. 25
Construction. 9
Electrical & Electronics. 13
Financials. 13
Food Producers. 18
Gold Mining. -65
General Mining. 12
Household Goods. 19
Life Insurance. 16
Media. 106
Mobile Telecoms. 15
I started here with nothing and still have most of it left.

Nivek

  • Sr. Member
  • ****
  • Posts: 295
  • Karma: +6/-1
    • View Profile
Re: Sector PE ratios.
« Reply #1 on: July 02, 2015, 07:47:49 pm »
It would be very interesting to compare that to historical ratios.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Sector PE ratios.
« Reply #2 on: July 02, 2015, 08:43:57 pm »
It would be very interesting to compare that to historical ratios.

Yes, that would be great but I have not yet seen PE ratio charts or tables.
Interesting to see that the ALSI is still a bit on the expensive side.
I started here with nothing and still have most of it left.

Mr_Dividend

  • Hero Member
  • *****
  • Posts: 586
  • Karma: +21/-0
    • View Profile
Re: Sector PE ratios.
« Reply #3 on: July 03, 2015, 09:47:19 am »
Orca, being retired I am sure you have looked at the different strategies for generating income - do you have a strategy, or make as much as possible and live on a non fixed amount? For me, I found that not touching the capital and just living on the dividends is is working well - although I probably could become comfortable on the 4% rule.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Sector PE ratios.
« Reply #4 on: July 03, 2015, 10:39:19 am »
I managed to live off dividends for 6 months of the year and the rest off capital. The markets are making me a bit concerned now and I am sitting mostly in cash at the moment and I have no idea what to do.

My idea of buying STXIND only has been put on hold due to the high PE ratio of the ALSI. Historically, the PE was 15 and is now at 18. Most sectors are still expensive.
I started here with nothing and still have most of it left.

Mr_Dividend

  • Hero Member
  • *****
  • Posts: 586
  • Karma: +21/-0
    • View Profile
Re: Sector PE ratios.
« Reply #5 on: July 04, 2015, 08:57:47 am »
My 2c. It really all depends on how much you need to live on as a percentage on how much how have. But is it was around 5% I would buy a diversified dividend portfolio which should beat inflation on yield as well as capital. Well, should.... :D

Working on FT's fwd dividends from their latest issue - just wanted to see how easy it get 5% and if it would be suitably diversified - working on 5% per company/ 20 companies:

Property: Local
*Hyprop: 4.86
*Redefine: 8.38
*Growth Point: 7.21
Rebosis: 9.57

Property: Overseas:
*NEPI: 3.72

Telkoms:
*MTN: 6.22
*VOD: 5.9

Investment:
*Old Mutual 4.92
*Sanlam: 4
*Corronation: 7.17

Banks:
*FNB: 4.3
Std Bank: 4.81

Insurance:
*MMI: 4.55
*RMI: 3.31

Other:
*AVI: 4.6
*Nampak:  4.95
LIFE 4.31
*Woolworths: 3.5
Sasol: 3.42
TFG: 4.31

* I own

Get's you an average of 5.2% - so R50K per R1mill per year.

My portfolio is similar - last cash went in oct last year - so can only work out any gains from start of Nov then - 7 months/ 8.32% (10% was CML, so got smacked a bit!) - excluding divi's of 5%

But of course, all depends on how much you need to live.

Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Sector PE ratios.
« Reply #6 on: July 04, 2015, 02:20:26 pm »
That looks good Mr Divi. I would need a divi of at least 8% to live on so I will look into the top ones on your list.

I can fully understand why you choose to live off the divies only due to tax. I on the other hand do not pay any tax on capital gains so I can go for good growth stocks and sell portions of the best ones to live on.
I started here with nothing and still have most of it left.

Mr_Dividend

  • Hero Member
  • *****
  • Posts: 586
  • Karma: +21/-0
    • View Profile
Re: Sector PE ratios.
« Reply #7 on: July 04, 2015, 10:43:46 pm »
Well, on around R6,000 income p/m do not pay tax anyway - well, beside 15% on dividends then 14% vat when I buy something - plus a couple of extra taxes here and there - like rates, which they then chuck vat on top.  :frustrated: But for me, what I like about the dividend way is that there is no thinking involved - I collect all the dividends for a year, and that's all the money I have for the following year. Easy. Never going to run out and as I am only 40, this could go on for a while. At the worst I might have to cut back spending or even find a part time job - but should be ok. But certainly do not have to worry if my capital will last - which would be a big worry for me. Also never have to worry about when/what shares to sell because guaranteed I will sell at the wrong time.. :mad:

Actually, becomes I make so little REITS are pretty much tax free for me.

But back to you - 8% is fairly high just out of dividends - the good thing is that most out strip inflation. Some that have not, for me so far - VOD, Nampak, CML. Two that pay really good dividends - often pay out specials - AVI and MMI. Good smaller property payers, but boring - SA Corp and Arrowhead A.

Still, I would really think about taking a lot of your cash out - I guess you could invest in any european market? Because throwing in the devaluation of the rand really makes future projections quite hard when you need euros - we only need them for holidays!

Good place to browse. There are EU etf's paying around 4.2% yield but I am sure you could get 5-6% with your own selection.
http://www.topyields.nl/top-dividend-yields-of-europe-africa.php (but some are because the share price has tanked/ so you do need to research..)


Orca

  • Hero Member
  • *****
  • Posts: 2274
  • Karma: +54/-3
    • View Profile
Re: Sector PE ratios.
« Reply #8 on: July 05, 2015, 09:18:12 pm »
I just checked. Cash on the JSE earns 5.85% pa. Surely if I stay in cash, it would be better than 4.8% on divies that attract tax as well? That way I would not loose my capital in sinking divi stocks.

Your method could well work for you but my circumstances differ as I pay no tax on interest and no VAT on sales and purchases.

I must add that I was watching BBC1 Finance on Friday and the foreign investment analysts interviewed all agreed that Africa is the place to be in future. SA being on top of the list with Nigeria second.
I started here with nothing and still have most of it left.

Mr_Dividend

  • Hero Member
  • *****
  • Posts: 586
  • Karma: +21/-0
    • View Profile
Re: Sector PE ratios.
« Reply #9 on: July 06, 2015, 07:02:52 am »
Well, I do hope you find a method that works for you. But just to be clear - as you are bringing cash into it - I do get capital growth on top of the dividends - , I just do not use it at the moment.

Maybe every 5 years or so I might sell a few shares and take an overseas holiday - but would prefer it if my lifestyle was dictated to by the dividends and use share growth if the kak hits the fan money.

Patrick

  • Administrator
  • Hero Member
  • *****
  • Posts: 2550
  • Karma: +47/-2
    • View Profile
Re: Sector PE ratios.
« Reply #10 on: July 07, 2015, 09:41:40 am »
But for me, what I like about the dividend way is that there is no thinking involved - I collect all the dividends for a year, and that's all the money I have for the following year. Easy. Never going to run out and as I am only 40, this could go on for a while. At the worst I might have to cut back spending or even find a part time job - but should be ok. But certainly do not have to worry if my capital will last - which would be a big worry for me. Also never have to worry about when/what shares to sell because guaranteed I will sell at the wrong time.. :mad:
It's true, I've read and understand so much about the 4% rule, but I'm always drawn to the dividend way of living. If I stopped work now and cashed in my holdings and bought something like the Dividend aristocrats, I'd cover all my living costs on their divi alone.

If it wasn't for the capital gains I'd have to pay I'd probably start doing this now and finally get out of the foord equity unit trust I first bought. It has been performing reasonably well, but the divvies are low, and the costs are higher than I'd like.

I could keep my STXIND there for growth, as I have sideline income to cover the remainder of my costs without needing to sell.

Whenever I have a bad day at work I keep asking myself why I'm still at the office...

Mr_Dividend

  • Hero Member
  • *****
  • Posts: 586
  • Karma: +21/-0
    • View Profile
Re: Sector PE ratios.
« Reply #11 on: July 07, 2015, 10:34:55 am »
Well, have only been doing this for under a year, but I love this early retirement lark. Depends on your personality I guess, and of course, some people love their jobs. If my wife retired now I really do not know what she would do, she has quite limited interests - work keeps her busy.

For me, I have been in the veg garden for the last hour, so need to decide what to do for there next hour and a half. Prep bathroom for painting, cleaning inside of the bakkie in case a buyer comes along, or sit at my desk and carry on with a course I am doing in sketchup, hmmm. I do know I will be watching Wimbeldon all afternoon though, after my well deserved afternoon nap.  ;D

seriously, I wake up with a big smile, each and every day.

jaDEB

  • Global Moderator
  • Hero Member
  • *****
  • Posts: 4534
  • Karma: +30/-3
    • View Profile
Re: Sector PE ratios.
« Reply #12 on: July 07, 2015, 10:42:07 am »
My retirement plan is as follows :

At age 55 I divorce my current wife, then get married to a successful 25 year old. Thus I will be 93 when she retires  :)
jaDEB

If it scares you, it's a sign you need to do it