3 Of 13 Cheapest Shares with the Highest EPS Growth for Next Year by Dividend

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Dec 22, 2012
The most of my readers are looking for high yielding stocks or cheap stocks to buy. It sounds nearly similar because the goal of both is the same. All leads to a high return of your invested capital.

A cheap stock is the basis for every future return. Beside cheap fundamentals and pricing ratios of a company, the expected growth is an additional important item for investors. After the ongoing turbulences due to the euro debt crises and the fiscal cliff in America, there should be some bargains in relation to growth right now.

I made a screen of America’s cheapest large capitalized stocks with the highest expected growth for the upcoming fiscal year. Stocks from the sheet have a market capitalization of more than USD$10 billion and earnings per share are expected to grow for at least 15 percent. Despite the strong growth, they still have a P/E ratio of less than 15 and a P/S and P/B ratios of less than two.

Thirteen companies fulfilled the mentioned criteria of which 10 companies have a buy or better recommendation. Eleven of the results pay dividends.

Here are my favorites:

The Travelers Companies (TRV) has a market capitalization of $27.78 billion. The company employs 30,000 people, generates revenue of $25.446 billion and has a net income of $1.426 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.416 billion. The EBITDA margin is 25.21 percent (the operating margin is 5.31 percent and the net profit margin is 5.6 percent).

Financial Analysis: The total debt represents 6.31 percent of the company’s assets and the total debt in relation to the equity amounts to 26.98 percent. Due to the financial situation, a return on equity of 5.67 percent was realized. Twelve trailing months earnings per share reached a value of $7.00. Last fiscal year, the company paid $1.59 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.40, the P/S ratio is 1.09 and the P/B ratio is finally 1.17. The dividend yield amounts to 2.53 percent and the beta ratio has a value of 0.69.

Bunge Limited (BG) has a market capitalization of $10.72 billion. The company employs 35,000 people, generates revenue of $58.743 billion and has a net income of $896.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.685 billion. The EBITDA margin is 2.87 percent (the operating margin is 1.60 percent and the net profit margin 1.53 percent).

Financial Analysis: The total debt represents 17.53 percent of the company’s assets and the total debt in relation to the equity amounts to 34.86 percent. Due to the financial situation, a return on equity of 8.05 percent was realized. Twelve trailing months earnings per share reached a value of $5.87. Last fiscal year, the company paid $0.98 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.50, the P/S ratio is 0.18 and the P/B ratio is finally 0.97. The dividend yield amounts to 1.47 percent and the beta ratio has a value of 1.19.

FedEx Corp. (FDX) has a market capitalization of $29.16 billion. The company employs 101,000 people, generates revenue of $42.68 billion and has a net income of $2.032 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.304 billion. The EBITDA margin is 12.43 percent (the operating margin is 7.46 percent and the net profit margin 4.76 percent).

Financial Analysis: The total debt represents 5.57 percent of the company’s assets and the total debt in relation to the equity amounts to 11.32 percent. Due to the financial situation, a return on equity of 13.55 percent was realized. Twelve trailing months earnings per share reached a value of $6.22. Last fiscal year, the company paid $0.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.91, the P/S ratio is 0.68 and the P/B ratio is 2. The dividend yield amounts to 0.60 percent and the beta ratio has a value of 1.24.

Take a look at the full list of cheap large capitalized stocks with highest expected earnings per share growth. The average P/E ratio amounts to 10.69 while the forward P/E ratio is 9.41. P/S ratio is 0.85 and P/B ratio 1.18. The expected earnings growth for next year amounts to 32.23 and 10.60 percent for the upcoming five years.