10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

3 Cheap Dividend Paying Large Caps with Highest Earnings Growth

It's always good to own cheap stocks in order to gain a return.

For sure, cheapness is a question of definition and in the end it's growth that makes a stock cheap or expensive.

Each month I make a screen about the cheapest large-capitalized dividend stocks. Below are screening criteria; they are very stern in my view. I use this screen to find some attractive bargains. In a hot market it's ever harder to find low-valuated stocks with great earnings growth prospects. Especially within the recent months, the number of results decreased rapidly. Let’s see if the recent crisis had some positive effects for the screen.

My criteria for the cheap large cap screen are:

- Market capitalization over USD $10 billion

- Expected earnings per share growth over 10 percent for the next year.

- P/E ratio under 15

- P/S and P/B ratio under 2

- Positive dividends

Thirteen companies fulfilled these criteria. It’s exactly one stock less than last month. Two high-yields are below the results and eight stocks have a current buy or better rating.

Here the results with highest five-year earnings per share growth:

Freeport-McMoRan Copper & Gold (FCX)has a market capitalization of $27.73 billion. The company employs 34,000 people, generates revenue of $18.010 billion and has a net income of $3.977 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.927 billion. The EBITDA margin is 38.46 percent (the operating margin is 31.35 percent and the net profit margin 22.08 percent).

Financial Analysis: The total debt represents 9.95 percent of the company’s assets and the total debt in relation to the equity amounts to 20.10 percent. Due to the financial situation, a return on equity of 18.33 percent was realized. Twelve trailing months earnings per share reached a value of $3.07. Last fiscal year, the company paid $1.25 in the form of dividends to shareholders. Five-year earnings per share is expected to grow by 17.60 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.52, the P/S ratio is 1.56 and the P/B ratio is finally 1.60. The dividend yield amounts to 4.23 percent and the beta ratio has a value of 2.02.

National-Oilwell Varco (NOV) has a market capitalization of $30.32 billion. The company employs 51,661 people, generates revenue of $20.041 billion and has a net income of $2.483 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.185 billion. The EBITDA margin is 20.88 percent (the operating margin is 17.75 percent and the net profit margin 12.39 percent).

Financial Analysis: The total debt represents 10.00 percent of the company’s assets and the total debt in relation to the equity amounts to 15.56 percent. Due to the financial situation, a return on equity of 13.16 percent was realized. Twelve trailing months earnings per share reached a value of $5.58. Last fiscal year, the company paid $0.49 in the form of dividends to shareholders. Five-year earnings per share is expected to grow by 14.33 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.72, the P/S ratio is 1.48 and the P/B ratio is finally 1.47. The dividend yield amounts to 1.49 percent and the beta ratio has a value of 1.76.

Magna Intl. (MGA) has a market capitalization of $16.22 billion. The company employs 121,000 people, generates revenue of $30.837 billion and has a net income of $1.426 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.308 billion. The EBITDA margin is 7.48 percent (the operating margin is 5.68 percent and the net profit margin 4.62 percent).

Financial Analysis: The total debt represents 2.52 percent of the company’s assets and the total debt in relation to the equity amounts to 4.58 percent. Due to the financial situation, a return on equity of 16.28 percent was realized. Twelve trailing months earnings per share reached a value of $6.20. Last fiscal year, the company paid $1.10 in the form of dividends to shareholders. Five-year earnings per share is expected to grow by 12.75 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.24, the P/S ratio is 0.52 and the P/B ratio is finally 1.72. The dividend yield amounts to 1.84 percent and the beta ratio has a value of 1.41.

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 12.25 while the forward P/E ratio is 10.02. P/S ratio is 0.90 and P/B ratio 1.54. The expected earnings growth for next year amounts to 18.65 and 8.47 percent for the upcoming five years.

Related stock ticker symbols:

SKM, BP, NEM, FCX, TCK, PKX, AEG, KSS, ENI, MUR, MGA, BSBR, NOV, ETE

Selected Articles:

· 20 Of The Safest Dividend Aristocrats

· 14 Low Priced Dividend Champions

· 10 Cheapest Growth Picks From The Dow Jones Index

· 19 Foreign Stocks With Cheap Valuation And Good Yields

*Subscribe to my blog via RSS Feed or E-Mail. Alternatively, you can follow me on Facebook or Twitter. Cheap large capitalized stocks with high growth originally published at long-term-investments.blogspot.com.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend's Website


Rating: 2.0/5 (1 vote)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK