Volatility is back and that’s good. Finally, we get some action! Still, the future returns from stocks as an asset isn’t that great and it’s understandable that some people go for bonds or other “safe” assets. However, with my time horizon, I can’t afford to try to time the market and luckily, the market isn’t crazy about the kind of stocks that I like. That being said, it’s really hard to find good value when the S&P trades at close to a forward P/E 16.1 which is far above the 10-year P/E at 14.7

I continue to believe that at one point, probably in a down-trending market, people will start to favour value over growth. Then, boring and somewhat safer stocks will be much easier to hold than riskier assets such as the FANGs. But today I want to highlight the importance of focusing on not overpaying as well as trying to at least get a a small safety of margin. People love to quote Buffet and say “price is what you pay value is what you get” but I can assure you that Buffet would slap you in the face with a BigMac if you paid 60 times the earnings for a company that sells a boring (non growth) product such as toilet-paper or tooth-paste. Common people…

In my system, there’s a few equities trading at fair or even cheap prices. Do note that the US market is more expensive than the Nordic market, and most value cases can be found in Wastern Europe or in property-focused stocks. That being said, let’s see the menu.

A la carte Appetizers

Procter & Gamble (PG) is a classic dividend growth stock which is now trading at a fair price. I’m targeting a 3.37% yield which corresponds to a stock price at $82. The company trades at $78 which is 4.06% above my target, so it seems okey to consider PG now.

Home Depot (HD) is another strong dividend growth stock which I like. It’s a retailer, but with a very solid e-commerce pipeline. I do not see this stock breaking as of the IOT or Amazon. My target yield is 2.37% and the stock trades -2.87% compared to that. However, so small differences isn’t worth weighting that much when you have the time horizon that I have. In the long-term perspective, it’s the fundamental return from the company itself that will reward you as a shareholder. HD seems like a company worth considering.

A la carte Main Courses

Enbridge (ENB) is a company I’ve been buying a lot of lately. The debt is quite heavy and investors didn’t like it when management shifted from focusing on dividend growth to paying down debt. However, I like it. Debt is scary when interest goes up, because debt becomes more expensive. My target yield is 5.65% and ENB is actually trading at a yield at 6.81%, meaning a positive difference at 27%. Could be a value-trap, but I don’t think so.

Oaktree Capital (OAK) is another stock I like. They focus on distressed debt, which isn’t that bad considering we live in a world were everybody spends money they don’t have. Target price is $50 and the stock trades at $40, but I think the intrinsic value could be as much as $61. Anyhow, it’s never bad to have a double-digit safety of margin.

A la carte Desserts

Hormel Foods Corp – they haven’t really experienced any boost in its share price, even though they “earned” a lot of money. When I read the transcript from the CFO and the CEO, my trust only got strengthened that this company is doing good choices. Not cheap at all, but I’m feeling good if I get HRL close to $30-32.

I do like Kimberly-Clark (KMB), Medtronic, Omnicom, Equinix, and Starbucks. Most of these stocks are trading -5% to my target price, but whatever. As long as I don’t buy a super boring company selling toilet paper at a price to earnings ratio way above 30-40, it’s okay. A premium compared to the industry average is fine if the company has a moat or specific goodwill which makes it able to beat its peers.

In the Nordic market Nordea (the Nordic bank) is trading at a price to book value close to 1.0 which is okay for one of the best banks in the world (ref stress tests). Veidekke (my largest holding) and even Kopparbergs are still trading at a good/fair price. There are other companies worth mentioning, but I’m starting to feel my hangover, so I’ll leave it like this.


Take care,



Anonymous · April 6, 2018 at 7:06 am

Which company which sells toiletpaper is trading for 60 p/e?

    Stockles · April 6, 2018 at 7:28 am

    None, it was just an example that price do matter (can’t be blind just because it’s high quality)

      Stockles · April 6, 2018 at 10:51 am

      But you can take a look at Rollins (which I’ve talked about before). P/E 60 and forward P/E 40. Great EPS growth, so might be misguiding metrics, but still very high.

        Anonymous · April 6, 2018 at 3:53 pm

        are you still buying Tesla? What is estimated forward P/E?

          Stockles · April 7, 2018 at 12:12 am


          Nah, it was just a funny thought I had back in the days. Interesting bet on battery storage, but no sound way to value Tesla. I like consisent free cash flow but that’s not happening for Tesla. Musk wants to spend money on ideas and innovation, but not sure shareholders will benefit that much.

Dividend Diplomats · April 7, 2018 at 12:22 am

Stockles –

Nice article. Love PG and KMB. Also – I need to look at the Nordic bank you mentioned, I am very interested to hear more!


Anonymous · April 7, 2018 at 8:19 am

what do you think about klovern AB, sagax AB d, Hemfosa etc?

    Stockles · April 8, 2018 at 5:43 am

    Don’t know sagax AB d, but both kløvern AB (growing a lot!) and Hemfosa are great companies worth watching.

Anonymous · April 7, 2018 at 8:26 am

oohh yes, i know you sold general electric at mid 20´s something?, are you planning to buy it back?

    Stockles · April 8, 2018 at 5:44 am

    Actually, I’ve never owned General Electric (GE). I don’t think I’ll buy it either. Way to many different segments and sectors within a single company makes it hard to figure out the bear/bull cases.

Mr ATM · April 8, 2018 at 3:38 am

Of your list, l’ve half size portions in Kmb and ENB. Need to build them both up, both have been beaten down and at historically high yield.

Problem is there is so much risk and uncertainty in the market right now. Who knows how far the trade war is going to go.

I’m pretty happy with my portfolio and dividend cash flow right now and don’t feel the rush to buy anything at the moment. So l will wait, build more cash and wait for market to crash 20% or more. Imagine KMB and JNJ at 5% yield 🙂

    Stockles · April 8, 2018 at 5:47 am

    Hi Mr ATM,

    Yes, KMB might become cheaper (not a bargain at all right now), but ENB is cheap. About the risk, true, but nothing new. Risk will always be there. You were very eager to buy the last time the market dropped, but now you changed? What happened?

    I’m also eager to see the market crash, but I will still add money now too. Can’t afford to try to time the market, but I’ll keep some cash too.

      Stockles · April 8, 2018 at 5:49 am

      Also, take a look at Omnicom. Trades at the highest yield ever. Would not be supriced if Google say that they are interested in OMC. High quality company with “long-term contracts”. Also, Markel is worth watching. About 20% of the revenue is now from investments. Quite similar to BRK.B

        Mr ATM · April 8, 2018 at 4:31 pm

        Thanks will look into these companies you mentioned.

      Mr ATM · April 8, 2018 at 4:29 pm

      Last time feb 5 drop was not systemic as l recall. It was more driven by algo trading. So l bought the dip.

      But now we got systemic risks in the market that are growing by the hour. In other words these are no dips. Market seems to be heading down from here in a hurrry.

      Also l bought everything l needed to buy. So now not in a hurry.

Anonymous · April 8, 2018 at 12:23 pm

will you buy more veidekke?

    Stockles · April 8, 2018 at 1:06 pm

    Yes, Veidekke is a wonderful company which I’m planning to add to for a long time. Position is now 50000 NOK and I think the area 80 – 85 is very cheap.

Stockles · April 8, 2018 at 2:13 pm

Question from a reader:
I wonder about your target for PG. Given the slow growth I wouldn’t buy it at 3.3% yield even after considering how secure and predictable their earnings may be. I just might hop in at $69 or so …

As for PG:
I see. If one uses the simplest way to analyse stocks PG trades with a yield at 3.52 which is 13 % above its 5-year average at 3.11%. Could indicicate undervalue/fair value. Mean consensus is $93 and there’s a spread at 1.4% to the lowest target ($78.50), and a 36% spread to the highest target $105. There is support at $75.9, but both MA50 and MA200 is bearish, so might be okey to wait it out.

The dividend growth is shitty at only 2% so I get your point. For me, PG is out as of now, because I’m focusing on more growth than income, but i figured some of my readers should at least be aware of this great company.

Closing Thoughts on Procter & Gamble from SSD
Procter & Gamble has long been a favorite dividend stock for conservative investors. With a track record of paying a dividend every year since 1890, including more than 60 consecutive years of payout increases, the company’s reputation as a dependable income investment is well-earned.

However, as with all mature businesses, P&G’s sheer size has caused a number of growth and innovation challenges over the past decade. These issues do not seem insurmountable or likely to cause more pain than just a slow bleed over time, but they need to be thoughtfully addressed if the company is to continue its rich history of profitable long-term growth.

P&G’s portfolio transformation and profit growth initiatives are far from proven, but it’s encouraging to see the company be more proactive. Having an activist investor on the board to help bring in some fresh thinking seems like a positive as well.

Overall, the company’s strategic plans to improve organic growth and regain market share will take time to play out, but this blue chip dividend king should continue delivering rock solid income and low single-digit payout growth in the years ahead.

Anonymous · April 8, 2018 at 2:31 pm

liker du noen sparebanker?

    Stockles · April 8, 2018 at 2:33 pm

    Ja. Jeg eier jo Sparebanken Øst som fortsatt er greit priset. Dog, tror Sparebanken Nord-Norge er det beste sparebanken. Høyest ROE og gode langsiktige resultater + særegen markedsposisjon. Ikke særlig billig, men greit nok. Mange sparebanker er dog priset på lik linje med Danske Bank og Nordea som er mye større, så usikkert hva som er å foretrekke.

Anonymous · April 8, 2018 at 4:33 pm


hva tenker du om olav thon som er på veldig lav P/E i forhold til konkurranse fra Amazon?

    Stockles · April 9, 2018 at 12:32 am


    Dette spørsmålet må du nesten utdype. Ser ikke helt sammenhengen mellom Olav Thon, P/E og Amazon.

      Anonymous · April 9, 2018 at 3:44 am

      Det er vel mer riktig å si e-handel

        Stockles · April 9, 2018 at 4:35 am

        Men hva mener du er sammenhengen mellom Olav Thon og Amazon?

          Anonymous · April 9, 2018 at 7:51 am

          Amazon tenker jo å opprette distribusjon fra sverige. Regner med det vil øke presset på kjøpesentre.

Dividend Daze · April 20, 2018 at 2:40 pm

And you know Buffett probably bought that BigMack with a coupon too lol. PG is on my watch list for a new potential buy. Would always love to add to my position in HRL as well. Been seeing a lot of people buy ENB lately as well.

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