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Alberto Abaterusso
Alberto Abaterusso
Articles (2390) 

These 3 Stocks Look Like Potential Bargains

They hold some characteristics that are highly welcomed by value investors

October 21, 2020 | About:

If you are looking for bargains, you may be interested in the three stocks listed below, as they meet the following criteria:

  • A price-earnings ratio below 20
  • A low enterprise-value-to-Ebitda ratio compared to the historical mean of the S&P 500 over the past six and a half years (which stands at around 12.6 as of the writing of this article)
  • A solid dividend growth exceeding the S&P 500, which saw dividends per share grow at a compound annual growth rate (CAGR) of 5.1% over the past three years through Sept. 30.

Apogee Enterprises Inc

The first stock that makes the cut is Apogee Enterprises Inc (NASDAQ:APOG), a Minneapolis, Minnesota-based designer and developer of glass and metal products as well as a provider of related services in North America and Brazil.

The stock price closed at $27.21 per share on Tuesday for a market cap of $717.96 million, a price-earnings ratio of 15.12 (versus the industry median of 13.75) and an enterprise-value-to-Ebitda ratio of 7.84 (versus the industry median of 8.47).

GuruFocus assigned a score of 6 out of 10 to the company's financial strength rating and of 7 out of 10 to its profitability rating.

Apogee Enterprises Inc currently pays dividends to its shareholders at a pace of 18 cents per common share every quarter and has increased them by a CAGR of 11.4% over the past three years (versus the industry median of 6.3%). The next payment will be made on Nov. 10 for a forward dividend yield of 2.76% as of Oct. 20.

On Wall Street, the stock has an overweight recommendation rating with an average target price of $29.75 per share.

D.R. Horton Inc

The second stock that makes the cut is D.R. Horton Inc (NYSE:DHI), an Arlington, Texas-based homebuilder.

The stock price closed at $76.52 per share on Tuesday for a market cap of $27.79 billion, a price-earnings ratio of 13.82 (versus the industry median of 11.69) and an enterprise-value-to-Ebitda ratio of 11.7 (versus the industry median of 10.09).

GuruFocus assigned a score of 6 to the company's financial strength rating and of 7 out of 10 to its profitability rating.

D.R. Horton Inc currently pays a quarterly cash dividend of 17.5 cents per common share with the last distribution sent out on Aug. 24, for a trailing 12-month dividend yield of 0.91% as of Oct. 20. The company has increased its dividend per share by a CAGR of 23.3% over the past three years.

On Wall Street, the stock has an overweight recommendation rating with an average target price of $80.06 per share.

Primerica Inc

The third stock to consider is Primerica Inc (NYSE:PRI), a Duluth, Georgia-based provider of financial products such as life insurance, investment and savings and auto, homeowners' and medical insurance products to North American middle income households.

The stock price closed at $117.63 per share on Tuesday for a market cap of $4.64 billion, a price-earnings ratio of 13.37 (versus the industry median of 12.14) and an enterprise-value-to-Ebitda ratio of 10.39 (versus the industry median of 8.4).

GuruFocus assigned a score of 4 to the company's financial strength rating and of 6 out of 10 to its profitability rating.

Primerica Inc currently pays dividends to its shareholders in the amount of 40 cents per common share every quarter, with the last payment made on Sept. 14, for a trailing 12-month dividend yield of 1.31% as of Oct. 20. The company has increased the dividend per share by 24.8% on average every year over the past three years (versus the industry median of 5.55%).

On Wall Street, the stock has an overweight recommendation rating with an average target price of $144.80 per share.

Disclosure: I have no position in any security mentioned.

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About the author:

Alberto Abaterusso
I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. 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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