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Philip van Doorn

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April 16, 2022, 9:24 a.m. EDT

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By Philip van Doorn

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“For three years, the company has had average net income of $4 billion, while paying dividends of about $1 billion a year and doing $3 billion a year in buybacks,” Brooker said. BK’s current dividend yield is 2.83%.

With low credit exposure, Bank of New York Mellon would have a much easier time navigating a decline in credit quality during a recession than banks focused on lending.

Brooker called the bank’s price-to-earnings valuation “undemanding.” Bank of New York Mellon’s stock trades for 9.9 times the consensus earnings estimate for the next 12 months among analysts polled by FactSet. This compares to forward price-to-earnings ratios of 11.3 for the S&P 500 banking industry group and 19 for the full S&P 500.

Jardine Matheson — a conservative play on the reopening of Asia

Jardine Matheson Holdings Ltd. /zigman2/quotes/208792442/delayed SG:J36 +0.47% is based in Hong Kong. The company’s shares held by First Eagle are listed on the Singapore Exchange. There is also an American depositary receipt: /zigman2/quotes/204099444/delayed JMHLY +2.30% .

Jardines was founded in 1832 and moved its headquarters to Hong Kong in 1844. The company is a conglomerate that trades at a forward P/E ratio of only 9.4, according to FactSet. “As a sum of the parts, since many components are public, we believe it trades at a significant discount,” Brooker said.

Brooker emphasized that Jardines has a strong management team and low debt. He also said U.S. investors getting used to a post-pandemic economy may not realize that much of Asia is still partially locked down, with Shanghai as a current example.

Brooker said that while U.S. investors are justifiably concerned about the validity of accounting for some Chinese companies, Jardine Matheson’s accounting is “above board, in our view.” He added that most of the company’s business exposure is in Indonesia.

Publicly traded units that are controlled by Jardine Matheson include:

  • Dairy Farm International Holdings Ltd. /zigman2/quotes/204020912/delayed SG:D01 -0.36% /zigman2/quotes/205427163/delayed DFIHY -3.73% , which runs convenience stores and supermarkets.

  • Hongkong Land Holdings Ltd. /zigman2/quotes/202780843/delayed SG:H78 -0.20% /zigman2/quotes/206019401/delayed HNGKY +2.46% .

  • Jardine Cycle & Carriage Ltd. /zigman2/quotes/206836469/delayed SG:C07 -0.31% /zigman2/quotes/203863934/delayed JCYGY +1.98% , which invests in the automotive industry and other industries in Southeast Asia.

  • Mandarin Oriental International Ltd. /zigman2/quotes/209525551/delayed SG:M04 0.00% , a hotel operator.

Shares of Jardines have a dividend yield of about 3.50%, with payments made twice a year.

Brooker emphasized the company’s culture of “doing business honorably.”

Exxon Mobil — the advantage of diverse assets

Exxon Mobil Corp. /zigman2/quotes/204455864/composite XOM +0.81% was the First Eagle Global Fund’s second-largest stock holding as of Feb. 28, making up 2.7% of the portfolio.

Even after rising 37% this year, to add to a 48% gain in 2021, Exxon’s stock trades at a forward P/E valuation of only 9.6. The stock features a 4.20% dividend yield, and the company wasn’t forced to cut its payout during the oil-price doldrums of 2020.

When asked about the influence of activist investors, led by Engine No. 1, who gained a presence on Exxon’s board of directors, Brooker said that this has been seen as a “big win for ESG efforts.” But he went on to say that what was really happening was “more complicated,” and that the board was was focusing on the efficient allocation of capital.

Looking far ahead, Brooker expects Exxon and other major integrated oil companies to be “part of the solution to climate risk.”

Shorter-term during a time of so much disruption for world energy markets, he sees Exxon as a compelling play because of the diversity of its business and energy assets, especially in the U.S. and Canada.

He pointed to higher risks for companies that have their oil-producing assets in specific regions. In contrast, “Exxon can move capital around to where its best and highest use is,” he said.

Top holdings

The First Eagle Global Fund’s largest position as of Feb. 28 was gold bullion, which made up 11.1% of the portfolio. Here are the next nine positions to round out the top 10 holdings:

Company Ticker % of portfolio
Oracle Corp. /zigman2/quotes/202180826/composite ORCL 2.9%
Exxon Mobil Corp. /zigman2/quotes/204455864/composite XOM 2.7%
Comcast Corp. Class A /zigman2/quotes/209472081/composite CMCSA 2.0%
British American Tobacco PLC /zigman2/quotes/209116881/delayed UK:BATS 1.7%
Meta Platforms Inc. Class A 1.6%
Philip Morris International Inc. /zigman2/quotes/201611010/composite PM 1.6%
Schlumberger N.V. /zigman2/quotes/201012972/composite SLB 1.6%
C.H. Robinson Worldwide,\ Inc. /zigman2/quotes/203490767/composite CHRW 1.5%
Compagnie Financiere Richemont S.A. /zigman2/quotes/203783259/delayed CH:CFR 1.5%

Click on the tickers for more about each company.

Click  here  for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Don’t miss:   These income strategies can help protect your stock investments from inflation and a recession

/zigman2/quotes/208792442/delayed
SG : Singapore: SGX
$ 51.15
+0.24 +0.47%
Volume: 255,100
Aug. 18, 2022 1:13p
P/E Ratio
6.10
Dividend Yield
4.13%
Market Cap
$14.67 billion
Rev. per Employee
$91,618
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/zigman2/quotes/204099444/delayed
US : U.S.: OTC
$ 50.84
+1.15 +2.30%
Volume: 22,294
Aug. 17, 2022 3:59p
P/E Ratio
6.06
Dividend Yield
3.95%
Market Cap
$14.67 billion
Rev. per Employee
$91,683
loading...
/zigman2/quotes/204020912/delayed
SG : Singapore: SGX
$ 2.74
-0.01 -0.36%
Volume: 141,000
Aug. 18, 2022 1:10p
P/E Ratio
129.25
Dividend Yield
2.74%
Market Cap
$3.74 billion
Rev. per Employee
$38,964
loading...
/zigman2/quotes/205427163/delayed
US : U.S.: OTC
$ 13.41
-0.52 -3.73%
Volume: 3.00
Aug. 10, 2022 12:01p
P/E Ratio
126.24
Dividend Yield
2.46%
Market Cap
$3.74 billion
Rev. per Employee
$38,992
loading...
/zigman2/quotes/202780843/delayed
SG : Singapore: SGX
$ 4.91
-0.01 -0.20%
Volume: 597,400
Aug. 18, 2022 1:12p
P/E Ratio
13.92
Dividend Yield
4.48%
Market Cap
$11.12 billion
Rev. per Employee
$838,125
loading...
/zigman2/quotes/206019401/delayed
US : U.S.: OTC
$ 25.24
+0.61 +2.46%
Volume: 270.00
Aug. 16, 2022 12:25p
P/E Ratio
14.30
Dividend Yield
4.02%
Market Cap
$11.12 billion
Rev. per Employee
$838,867
loading...
/zigman2/quotes/206836469/delayed
SG : Singapore: SGX
$ 31.80
-0.10 -0.31%
Volume: 121,900
Aug. 18, 2022 1:13p
P/E Ratio
10.02
Dividend Yield
3.92%
Market Cap
$12.24 billion
Rev. per Employee
$99,043
loading...
/zigman2/quotes/203863934/delayed
US : U.S.: OTC
$ 46.30
+0.90 +1.98%
Volume: 393.00
Aug. 17, 2022 10:18a
P/E Ratio
9.89
Dividend Yield
3.67%
Market Cap
$8.88 billion
Rev. per Employee
$83,993
loading...
/zigman2/quotes/209525551/delayed
SG : Singapore: SGX
$ 1.96
0.00 0.00%
Volume: 24,000
Aug. 17, 2022 5:04p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$2.48 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/204455864/composite
US : U.S.: NYSE
$ 92.20
+0.74 +0.81%
Volume: 13.68M
Aug. 17, 2022 4:03p
P/E Ratio
10.07
Dividend Yield
3.82%
Market Cap
$381.17 billion
Rev. per Employee
$5.69M
loading...
/zigman2/quotes/202180826/composite
US : U.S.: NYSE
$ 79.25
-0.27 -0.34%
Volume: 5.19M
Aug. 17, 2022 4:03p
P/E Ratio
33.01
Dividend Yield
1.62%
Market Cap
$211.91 billion
Rev. per Employee
$296,783
loading...
/zigman2/quotes/204455864/composite
US : U.S.: NYSE
$ 92.20
+0.74 +0.81%
Volume: 13.68M
Aug. 17, 2022 4:03p
P/E Ratio
10.07
Dividend Yield
3.82%
Market Cap
$381.17 billion
Rev. per Employee
$5.69M
loading...
/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 39.26
-1.10 -2.73%
Volume: 18.45M
Aug. 17, 2022 4:00p
P/E Ratio
12.81
Dividend Yield
2.75%
Market Cap
$178.12 billion
Rev. per Employee
$643,704
loading...
/zigman2/quotes/209116881/delayed
UK : U.K.: London
3,440.50 p
+34.00 +1.00%
Volume: 3.24M
Aug. 17, 2022 4:35p
P/E Ratio
14.59
Dividend Yield
6.33%
Market Cap
£76.49 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201611010/composite
US : U.S.: NYSE
$ 101.17
-0.55 -0.54%
Volume: 3.04M
Aug. 17, 2022 4:00p
P/E Ratio
17.37
Dividend Yield
4.94%
Market Cap
$157.68 billion
Rev. per Employee
$455,187
loading...
/zigman2/quotes/201012972/composite
US : U.S.: NYSE
$ 35.40
-0.18 -0.51%
Volume: 7.70M
Aug. 17, 2022 4:00p
P/E Ratio
19.34
Dividend Yield
1.98%
Market Cap
$50.32 billion
Rev. per Employee
$270,348
loading...
/zigman2/quotes/203490767/composite
US : U.S.: Nasdaq
$ 116.11
-1.44 -1.23%
Volume: 1.23M
Aug. 17, 2022 4:00p
P/E Ratio
13.98
Dividend Yield
1.89%
Market Cap
$14.56 billion
Rev. per Employee
$1.56M
loading...
/zigman2/quotes/203783259/delayed
CH : Switzerland: SWX
CHF 112.05
-0.70 -0.62%
Volume: 931,550
Aug. 17, 2022 5:31p
P/E Ratio
28.96
Dividend Yield
2.01%
Market Cap
CHF63.52 billion
Rev. per Employee
N/A
loading...

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