If you screen the market for stocks that more than double the earnings return that 20-year high-quality corporate bonds are granting to their holders, you could have a higher chance to discover value opportunities, in my opinion. These bonds, which represent corporate loans issued by triple-A, double-A and single-A companies, are granting a 3.26% monthly return to their holders as of May 22.
Thus, investors may want to consider the following stocks, as they have earnings returns of more than 6.52% and price-earnings ratios of below 15.34.
Aptiv PLC
Shares of Aptiv PLC (APTV, Financial) were trading at a price of $71.89 per unit at close on Friday for a market cap of $18.3 billion.
The Irish global manufacturer and distributor of auto parts offers an earnings yield of 12.6% and has a price-earnings ratio of 7.9.
The share price has decreased by 24.3% so far this year, but Wall Street sell-side analysts predict that it will rebound and hit the price target of $75.65 per share, reflecting 5.2% upside from Friday’s closing price.
GuruFocus assigned a positive rating of 5 out of 10 for the company's financial strength and a rating of 8 out of 10 for its profitability.
GlobalSCAPE Inc
Shares of GlobalSCAPE Inc (GSB, Financial) were trading at a price of $9.26 per unit at close on Friday for a market cap of $173.26 million.
The San Antonio, Texas-based developer and provider of secure information exchange and data transfer services offers an earnings yield of 7.7% and has a price-earnings ratio of 13.04.
The share price has decreased by 5.8% so far this year, but Wall Street sell-side analysts forecast that it will rebound, as they suggest to buy the stock.
GuruFocus assigned a moderate rating of 4 out of 10 for the company’s financial strength and a higher rating of 8 out of 10 for its profitability.
Hamilton Beach Brands Holding Co
Shares of Hamilton Beach Brands Holding Co (HBB, Financial) were trading at a price of $11.76 per unit at close on Friday for a market capitalization of $160.2 million.
The Glen Allen, Virginia-based designer and marketer of consumer electronics offers an earnings yield of 10.7% and a price-earnings ratio of 9.33.
The share price has decreased by 38.4% so far this year, but Wall Street sell-side analysts predict that it will rebound strongly, as the average target price of $15 reflects 27.6% upside from Friday's closing price.
GuruFocus assigned the stock a moderate rating of 5 out of 10 for its financial strength and a rating of 4 out of 10 for its profitability.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- A Trio of Low Price-Book Ratio Stocks to Consider
- A Trio of Stocks With Low Price-Sales Ratios
- 3 Stocks With Low Forward Price-Earnings Ratios
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