Screening for stocks that more than double the earnings return that 20-year high-quality corporate bonds grant to their holders (an average monthly spot rate of 3.51% as of the writing of this article) raises chances to uncover value opportunities.
The 20-year high-quality corporate bonds represent corporate loans issued by triple-A, double-A and single-A companies. The following stocks are trading their earnings for less than 14.25 times their price, according to the earnings yield.
Owens Corning
Shares of Owens Corning (OC, Financial) closed at $65.00 on Monday for a market capitalization of $7.07 billion. The Toledo, Ohio-based producer and distributor of building products and equipment has an earnings yield of 7.04% versus the industry median of 7.69% and a price-earnings ratio of 14.21 versus the industry median of 13.01.
The stock has risen 84.5% over the past five years through Dec. 23, though it is still trading below its fair price based on the Peter Lynch chart.
GuruFocus assigned a 4 out of 10 rating for the company's financial strength and an 8 out of 10 rating for its profitability.
The stock grants a forward dividend yield of 1.48% as of Monday.
Wall Street issued an overweight recommendation rating for shares of Owens Corning with an average target price of $73.31.
Vishay Intertechnology
Shares of Vishay Intertechnology Inc. (VSH, Financial) closed at $21.30 on Monday for a market capitalization of $3.08 billion. The Malvern, Pennsylvania-based manufacturer and provider of semiconductors has an earnings yield of 8.1% versus the industry median of 4.2% and a price-earnings ratio of 12.31 versus the industry median of 23.92.
The stock price is up 49.4% over the past five years. However, shares still seem to be cheap based on the Peter Lynch chart.
Vishay Intertechnology has received a rating of 7 out of 10 for both its financial strength and its profitability.
The stock grants a forward dividend yield of 1.79% as of Monday.
The stock has a hold recommendation rating from Wall Street analysts and an average target price of $17.60 per share.
Primoris Services
Shares of Primoris Services Corporation (PRIM, Financial) closed at $22.56 on Monday with a market capitalization of $1.1 billion.
The Dallas, Texas-based specialty contractor and infrastructure company has an earnings yield of 7.6%, which is nearly in line with the industry median of 7.7%. The price-earnings ratio of 13.12 is slightly higher than the industry median of 13.01.
The stock appears cheap according to the following Peter Lynch chart, following a 5-year decline of 2%.
GuruFocus assigned the company a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10.
The stock offers a forward dividend yield of 1.07% as of Monday.
Wall Street sell-side analysts issued an overweight recommendation rating for shares of Primoris Services Corporation and have set an average target price of $28.75.
Disclosure: I have no positions in any securities mentioned.
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