If you pick stocks that more than double the earnings return that 20-year high-quality corporate bonds are offering to their holders, you could end up with a higher likelihood to unearth value opportunities. These bonds, which represent corporate loans issued by triple-A, double-A and single-A companies, imply a very low risk of failure and are offering a 2.83% monthly return to their holders as of July.
Thus, investors may want to consider the following stocks, as they have earnings returns of more than 5.66% and price-earnings ratios below 17.67.
Sony Corp
Shares of Sony Corp (SNE, Financial) traded at $79.37 per unit at close on Tuesday for a market capitalization of $96.94 billion.
The Japanese global consumer electronics company offers an earnings return of 6.32% and has a price-earnings ratio of 15.83.
The share price has risen by 43% over the past year, determining a 52-week range of $50.94 to $84.15.
GuruFocus assigned a positive rating of 6 out of 10 for the company's financial strength and another positive rating of 5 out of 10 for the profitability.
Wall Street sell-side analysts recommend a buy rating for this stock and have set an average target price of $95.65 per share.
Flagstar Bancorp Inc
Shares of Flagstar Bancorp Inc (FBC, Financial) traded at a price of $31.82 each at close on Tuesday for a market capitalization of $1.81 billion.
The Troy, Michigan-based regional bank offers an earnings return of 15.53% and has a price-earnings ratio of 6.44.
The stock has fallen by 9.6% over the past year, determining a 52-week range of $16.76 to $40.
GuruFocus assigned a low rating of 2 out of 10 to the company's financial strength and a moderate rating of 4 out of 10 to its profitability.
Wall Street sell-side analysts recommend a buy rating for the stock and have established an average target price of $39.50 per share.
Jones Lang LaSalle Inc
Shares of Jones Lang LaSalle Inc (JLL, Financial) traded at $103 each at close on Tuesday for a market capitalization of $5.33 billion.
The Chicago, Illinois-based provider of commercial real estate and investment management services to clients worldwide offers an earnings return of 7.86% and has a price-earnings ratio of 12.73.
The stock has declined by 20.8% over the past year for a 52-week range of $78.29 to $178.55.
GuruFocus assigned a positive rating of 6 out of 10 to the company's financial strength and a high rating of 8 out of 10 to its profitability.
Wall Street sell-side analysts recommend a buy recommendation rating for this stock and have established an average target price of $128.60 per share.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 High Yield Stocks for the Dividend Investor
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- A Trio of Low Price-Book Ratio Stocks to Consider
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