My daughter and I have been in Portugal for the last several days. She came here to compete in an international surf contest. I came to watch, eat a metric ton of seafood, and get a general sense of what’s happening in Europe economically and otherwise. One suggestion: Consider the Franklin International Core Dividend Tilt Index ETF (DIVI), says Nilus Mattive, editor of Safe Money Report.
Back in California, a seafood feast like one I just had would easily exceed $100 – and the bottle of wine I ordered with it would be at least $30. Yet here, even in a well-known area charging tourist prices, all that seafood was under $40 – and the whole bottle of wine was an astonishing $10.
Franklin International Core Dividend Tilt Index ETF (DIVI)
You’ll find the same kind of relative bargains when you look at European stocks right now. The S&P 500 Index (^SPX) is currently trading at about 20 times forward earnings estimates. Meanwhile, the Stoxx Europe 600 trades at 14.8 times forward earnings. UK stocks are even cheaper still.
These broad index numbers are not perfect comparisons, of course. But we can find similar discounts even if we start examining things sector by sector. For example, if we look at some of the more conservative areas — the types of companies that also tend to pay good dividends — we find discounts of 20% or 30%.
US financials are trading at 15.6 times forward earnings. European firms go for 11.2 times. Consumer staples, mostly food and beverage companies, will cost you 22 times earnings in the US versus 16.5 in Europe. And utilities, the original “orphan and widow” stocks? You might pay 17.1 times earnings in the States against 13.8 in Europe.
That’s one reason to look at DIVI, a broad-based global stock fund that emphasizes income-producing shares. It currently gets a “B-” Weiss Rating and holds hundreds of different stocks, about 60% of which are based in Europe.
