Investors looking for bargains may be interested in the following three companies, as their stocks have a low price-to-median-ps-value when compared to the average of the S&P 500 (about 1.5 as of the writing of this article).
This approach is based on the idea that the stock valuation will revert to its historical (10-year) average in terms of price-sales ratio. It requires investors to divide the current share price by the trailing twelve-months revenue per share times the 10-year median price-sales ratio.
Wall Street is also positive about these stocks, as sell-side analysts have issued optimistic recommendation ratings for them.
BCE Inc
The first stock investors may be interested in is BCE Inc (BCE, Financial), a Canadian telecommunications and media services company.
BCE's price-to-median-ps-value is 1.07 as of Dec. 4, which ranks higher than 42.42% of companies that operate in the telecommunication services industry.
BCE's revenue per share for the trailing twelve months through the most recent quarter was $19.11. BCE's 10-Year Median price-sales ratio is about 2.1942. Thus, the median price-sales value is $41.94.
The stock price traded at $44.84 per share at close on Friday for a market capitalization of $40.27 billion and a 52-week range of $31.66 to $49.26.
Currently, BCE pays quarterly dividends to its shareholders with the next payment of 0.833 Canadian dollars (about $0.6515) per common share to be made on Jan. 15, 2021 for a forward dividend yield of 5.66% as of Dec. 4.
GuruFocus assigned a score of 4 out of 10 to the financial strength and of 7 out of 10 to the profitability of the company.
Wall Street recommends an overweight recommendation rating with an average target price of $46.04 per share for the stock.
PPG Industries Inc
The second stock investors could be interested in is PPG Industries Inc (PPG, Financial), a Pittsburgh, Pennsylvania-based global distributor of specialty chemicals.
PPG Industries' price-to-median-ps-value is 1.36 as of Dec. 4, which ranks higher than 33.44% of companies that operate in the chemicals industry.
PPG Industries' revenue per share for the trailing twelve months through the most recent quarter was $57.802. PPG Industries' 10-year median price-sales ratio is nearly 1.87. Thus, its median price-sales value is $108.08.
The stock price was trading at $146.93 per share at close on Friday for a market capitalization of $34.71 billion and a 52-week range of $69.77 to $149.88.
Currently, PPG Industries pays quarterly dividends to its shareholders with the next distribution of 54 cents per common share scheduled for Dec. 11, giving a forward dividend yield of 1.47% as of Dec. 4.
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and of 8 out of 10 to its profitability.
Wall Street recommends an overweight recommendation rating with an average target price of $150.43 per share for the stock.
Stanley Black & Decker Inc
The third stock investors may be interested in is Stanley Black & Decker Inc (SWK, Financial), a New Britain, Connecticut-based global seller of power tools and professional industrial products.
Stanley Black & Decker's price-to-median-ps-value is 1.42 as of Dec. 4, which ranks higher than 28.68% of companies that operate in the industrial products industry.
Stanley Black & Decker's revenue per share for the trailing twelve months through the most recent quarter was approximately $89.93. Stanley Black & Decker's 10-year median price-sales ratio is about 1.41. Therefore, the median price-sales value stands at $127.05.
The stock price was trading at $180.85 per share on Friday for a market capitalization of $28.98 billion and a 52-week range of $70 to $195.
Currently, Stanley Black & Decker pays a quarterly cash dividend of 70 cents per common share with the next payment to issue on Dec. 15 for a forward dividend yield of 1.55% as of Dec. 4.
GuruFocus assigned a score of 5 out of 10 to the financial strength and of 8 out of 10 to the profitability of the company.
Wall Street recommends an overweight recommendation rating with an average target price of $199.63 per share for the stock.
Disclosure: I have no position in any security mentioned.
Read more here:
- 3 Magic Formula Stocks
- 3 Stocks Trading Below Intrinsic Value
- A Trio of Stock Picks for a 'Buy and Hold' Approach
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