10-09-2016, 10:53 AM
(This post was last modified: 10-09-2016, 10:54 AM by Dividend Watcher.)
Rob, I think Caversham's reply is excellent. To that I would add my response to Amos over in this thread.
I just did a quick scan of CL's stats and recent performance. Yes, if you look at CL's ttm P/E it is in the 40s due to some problems dealing with inflation in South America and the slow growth in emerging markets which factor into their strategy to grow the business in the future. However, IIRC, FAST Graphs uses a portion of the expected short-term forward earnings to calculate P/Es. As to the value, in the 20 year history you show, CL has almost always traded at a premium to both its earnings-justified value (orange line) and the market as a whole.
I don't believe the company is broken and has a bright future ahead. In fact, I just bought some of their products in the last week. They still make products that are good quality, reasonably priced and need to be bought on a frequent basis. I don't see it as that grossly overvalued.
If it were me with your time frame, I'd hang on and collect the dividends to use somewhere else but that's me. I'm doing that in my own portfolio. In either case, you seem well-positioned.
I just did a quick scan of CL's stats and recent performance. Yes, if you look at CL's ttm P/E it is in the 40s due to some problems dealing with inflation in South America and the slow growth in emerging markets which factor into their strategy to grow the business in the future. However, IIRC, FAST Graphs uses a portion of the expected short-term forward earnings to calculate P/Es. As to the value, in the 20 year history you show, CL has almost always traded at a premium to both its earnings-justified value (orange line) and the market as a whole.
I don't believe the company is broken and has a bright future ahead. In fact, I just bought some of their products in the last week. They still make products that are good quality, reasonably priced and need to be bought on a frequent basis. I don't see it as that grossly overvalued.
If it were me with your time frame, I'd hang on and collect the dividends to use somewhere else but that's me. I'm doing that in my own portfolio. In either case, you seem well-positioned.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan