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Alberto Abaterusso
Alberto Abaterusso
Articles (2265) 

3 Stocks With Low Forward Price-Earnings Ratios

H&R Block Inc tops the list

August 04, 2020 | About:

One strategy to unearth value opportunities is to screen the market for stocks with an enticing forward price-earnings ratio.

Investors may want to consider the following three stocks, as they have a forward price-earnings ratio that stands below the S&P 500 index's historical average of 15. Estimates of future earnings are based on data from Morningstar analysts.

H&R Block Inc

The first stock that meets the criteria is H&R Block Inc (NYSE:HRB), a Kansas City, Missouri-based provider of assisted income tax return, do-it-yourself tax and virtual tax preparation services to the general public in North America and Australia.

H&R Block Inc has a forward price-earnings ratio of 4.25 (versus the industry median of 23.04), which results from Monday’s share price of $14.04 and analyst expectations for earnings per share (EPS) of about $3.30 for the next full fiscal year.

The stock price has fallen by 47.4% over the past year, determining a market capitalization of $2.71 billion and a 52-week range of $11.29 to $29.62.

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

Wall Street sell-side analysts recommend a hold rating with an average price target of $18.33 per share of H&R Block Inc.

The AES Corp

The second company under consideration is The AES Corp (NYSE:AES), an Arlington, Virginia-based diversified electricity generation and utility operator.

The AES Corp has a forward price-earnings ratio of 10.95 (versus the industry median of 17.83), which is the result of Monday’s closing share price of $15.12 and analyst expectations for EPS of approximately $1.38 for the next full fiscal year.

The stock price has decreased by 7.4% over the past year for a market capitalization of $10.05 billion and a 52-week range of $8.11 to $21.23.

GuruFocus assigned a low rating of 3 out of 10 to the company’s financial strength and a positive rating of 6 out of 10 to its profitability.

Wall Street sell-side analysts issued a buy recommendation rating with an average target price of $17.75 per share of The AES Corp.

Novartis AG

The third company that meets the criteria is Novartis AG (NYSE:NVS), a Swiss drug giant.

Novartis AG has a forward price-earnings ratio of 14.91 (versus the industry median of 18.96), which derives from Monday’s closing share price of $83.65 and analysts' expectations for an EPS of about $5.61 for the next full fiscal year.

The stock price has fallen by almost 8% over the past year for a market capitalization of $194.92 billion and a 52-week range of $69.18 to $99.84.

GuruFocus has assigned a positive rating of 5 out of 10 for the company’s financial strength and a very good rating of 7 out of 10 for its profitability.

Wall Street sell-side analysts recommend an overweight rating with an average target price of $102.64 per share of Novartis AG.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about gold, silver and precious metals mining industries. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master's Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands.

You can follow me on Twitter at https://twitter.com/AAbaterusso

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