When looking for bargains, investors could be interested in the following three companies, as their stocks have low price-to-median-price-sales-values when compared to the average of the S&P 500 (which stands around 1.7 as of the writing of this article).
This approach is based on the idea that the stock valuation will revert to its historical (10-year) average in terms of the price-sales ratio. It requires investors to divide the current share price by the trailing twelve-month revenue per share times the 10-year median price-sales ratio.
Sell side analysts on Wall Street have also issued positive recommendation ratings for these stocks, suggesting that their share prices are expected to trade higher over the several months ahead.
Nucor Corp
The first stock investors could be interested in is Nucor Corp (NUE, Financial), a Charlotte, North Carolina-based manufacturer and seller of steel products.
Nucor Corp's price-to-median-price-sales-value is 1.56 as of April 19, which ranks higher than 109 out of 302 companies that operate in the steel industry.
The company's revenue per share for the trailing 12 months ended in December 2020 was $66.40. Nucor Corp has a 10-year median price-sales ratio of 0.765. Thus, the median price-sales value is $50.80 as of April 19.
The stock was trading at $79.44 per share at close on Monday for a market capitalization of $23.73 billion and a 52-week range of $34.72 to $82.76.
Currently, Nucor Corp pays a quarterly dividend of 40.5 cents per common share with the next payment to issue on May 11, which will be on par with the previous distribution. The stock offers a forward dividend yield of 2.04% as of April 19.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
Wall Street recommends a median rating of overweight with an average target price of $74.60 per share for the stock.
CMS Energy Corp
The second stock investors could be interested in is CMS Energy Corp (CMS, Financial), a Jackson, Michigan-based energy company.
CMS Energy Corp's price-to-median-price-sales-value is 1.65 as of April 19, which ranks higher than 69 out of 312 companies that operate in the utilities and regulated industry.
The revenue per share for the trailing 12 months ended in December 2020 was $22.34. CMS Energy Corp has a 10-year median price-sales ratio of 1.6643. Thus, its median price-sales value is $38.85 as of April 19.
The stock was trading at $64.12 per share at close on Monday for a market capitalization of $18.56 billion and a 52-week range of $52.35 to $67.98.
Currently, CMS Energy Corp pays a quarterly dividend of 43.5 cents per common share with the last payment issued on Feb. 2, which was a 6.62% hike from the previous distribution. The stock offers a trailing 12-month dividend yield of 2.58% as of April 19.
GuruFocus assigned a score of 3 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
Wall Street recommends a median rating of overweight for the stock with an average target price of $65.94 per share.
Jacobs Engineering Group Inc
The third stock to consider is JB Hunt Transport Services Inc (JBHT, Financial), a Lowell, Arkansas-based provider of surface transportation and shipping services in the U.S. and Canada.
JB Hunt Transport Services Inc's price-to-median-price-sales-value is 1.21 as of April 19, which ranks higher than 230 out of 479 companies that operate in the transportation industry.
The revenue per share for the trailing 12 months ended in December 2020 was $90.25. JB Hunt Transport Services Inc has a 10-year median price-sales ratio of about 1.5316. Therefore, the median price-sales value is $138.24 as of April 19.
The stock price was trading at $166.93 per share on Monday for a market capitalization of $17.67 billion and a 52-week range of $92.06 to $178.40.
Currently, JB Hunt Transport Services Inc distributes a quarterly dividend of 28 cents per common share with the last payment issued on Feb. 5, which was a 3.7% increase compared to the previous distribution. The stock offers a trailing 12-month dividend yield of 0.65% as of April 19.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 9 out of 10 to its profitability.
Wall Street recommends a median rating of overweight with an average target price of $177.82 per share for the stock.
Disclosure: I have no position in any securities mentioned.
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