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3 Opportunities for the Value Investor

Merck & Co tops the list

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Alberto Abaterusso
Apr 06, 2020
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Value investors may be interested in these stocks for the following reasons:

  1. These stocks do not appear too expensive, as their earnings are trading for not more than 20 times their price.
  2. These stocks have a consistent history of earnings and sales generation. The top and bottom lines have grown over the past five years and no losses were recorded.
  3. These stocks have received positive recommendation ratings from Wall Street sell-side analysts.

Merck & Co

The first stock that meets the above-listed criteria is Merck & Co Inc (

MRK, Financial).

The Kenilworth, New Jersey-based drug giant saw its trailing 12-month revenue per share grow by 4.5% and its trailing 12-month earnings per share without non-recurring items (EPS without NRI) increase by 1.1% over the past five years. The price-earnings ratio (20 as of Friday) has slightly declined over the period in question.

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The stock was trading at a price of $76.25 per share at close on Friday for a market cap of $193.39 billion and a dividend yield of 3.04%.

GuruFocus assigned the company a moderate financial strength rating of 5 out of 10 and a very positive profitability rating of 8 out of 10.

Wall Street sell-side analysts recommend an overweight rating for this stock with an average target price of $95.81 per share.

Alliant Energy Corp

The second stock that meets the above-listed criteria is Alliant Energy Corp (

LNT, Financial).

The Madison, Wisconsin-based distributor of electricity and natural gas in the Midwest region saw its trailing 12-month revenue per share consolidate at a 0.6% average annual growth rate over the past five years while its EPS without NRI grew by about 7.2% per year. The price-earnings ratio (19.38 as of Friday ) went down 2.1% over the period in question.

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The stock was trading at a price of $45.15 per share at close on Friday for a market cap of $11.06 billion and a dividend yield of 3.2%.

GuruFocus assigned a low score of 3 out of 10 to the company's financial strength but a very good score of 7 out of 10 to its profitability.

As of April, Wall Street sell-side analysts recommend two buy ratings and five hold ratings for this stock. Their estimates on the price target average $54.75 per share.

Idacorp

The third stock that meets the above-listed criteria is Idacorp Inc (

IDA, Financial).

The Boise, Idaho-based distributor of electric energy in the United States saw its trailing 12-month revenue per share jump by 1.4% and its EPS without NRI grow by 4.1% over the past five years. The price-earnings ratio (18.58 as of Friday ) declined by 1.1% over the observed years.

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The stock was trading at a price of $85.47 per share at close on Friday for a market cap of $4.31 billion and a dividend yield of 3.04%.

GuruFocus assigned the company a moderate rating of 4 out of 10 for its financial strength and a very positive rating of 7 out of 10 for its profitability.

Wall Street sell-side analysts recommend an overweight rating for this stock with an average target price of $102 per share.

Disclosure: I have no positions in any security mentioned.

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