If you are looking for bargain opportunities, you may want to consider the three stocks listed below, as they match 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 surpassing the S&P 500, which saw its dividend per share grow at a compound annual growth rate (CAGR) of about 5.03% over the past three years through Sept. 30
Intel Corp
The first stock that makes the cut is Intel Corp (INTC, Financial), a Santa Clara, California-based semiconductor company.
The stock price closed at $50.69 per share on Tuesday for a market cap of $207.73 billion, a price-earnings ratio of 9.94 (versus the industry median of 30.27) and an enterprise-value-to-Ebitda ratio of 5.88 (versus the industry median of 17.26).
GuruFocus assigned a score of 6 out of 10 to the company's financial strength rating and of 9 out of 10 to its profitability rating.
Intel Corp currently pays dividends to its shareholders in the amount of 33 cents per common share every quarter and has increased them by 6.6% per annum over the past three years (versus the industry median of 7.7%). The last payment was made on Dec. 1 for a trailing 12-month dividend yield of 2.6% as of Dec. 8.
On Wall Street, the stock has a median recommendation rating of hold and an average target price of $52.45 per share.
Rio Tinto PLC
The second stock that makes the cut is Rio Tinto PLC (RIO, Financial), an Australian multinational metals and mining corporation.
The stock price closed at $72.89 per share on Tuesday for a market cap of $90.89 billion, a price-earnings ratio of 15.84 (versus the industry median of 18.53) and an enterprise-value-to-Ebitda ratio of 5.96 (versus the industry median of 12).
GuruFocus assigned a score of 6 out of 10 to the company's financial strength rating and of 8 out of 10 to its profitability rating.
This year Rio Tinto PLC has paid two semi-annual dividends of $2.31 per common share on April 16 and of $1.55 per common share on Sept. 17, for a trailing 12-month dividend yield of 5.3% as of Dec. 8. The company has increased its dividend per share by 29% per annum over the past three years, while the industry has a median of 7.7% per annum for the three-year dividend growth rate.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $76.38 per share.
Allstate Corp
The third stock to consider is Allstate Corp (ALL, Financial), a Northbrook, Illinois-based provider of insurance products to clients in North America.
The stock price closed at $105.45 per share on Tuesday for a market cap of $32.06 billion, a price-earnings ratio of 7.39 (versus the industry median of 12.42) and an enterprise-value-to-Ebitda ratio of 5.87 (versus the industry median of 8.91).
GuruFocus assigned a score of 4 out of 10 to the company's financial strength rating and of 7 out of 10 to its profitability rating.
Allstate Corp currently pays dividends to its shareholders in the amount of 54 cents per common share every quarter, with the next payment to be made on Jan. 4, 2021 for a forward dividend yield of 2.05% as of Dec. 8. The company has increased the dividend per share by 14.9% per annum over the past three years (versus the industry median of 6.1%).
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $118.79 per share.
Disclosure: I have no position in any security mentioned.
Read more here:
- A Trio of Opportunities Trading at Low Price-to-Free-Cash-Flow Ratios
- 3 Stocks That Could Be Bargains
- Increase Exposure to Gold and Silver Through These 3 Operators
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