Screening for stocks with compelling Shiller price-earnings ratios increases the likelihood of identifying value opportunities, in my opinion. Thus, investors may want to consider the following stocks, as their Shiller price-earnings ratios are trading below the S&P 500 Index's historical average of 16.77 as of Dec. 23.
Chevron Corp
The first company under consideration is Chevron Corp (CVX, Financial), a San Ramon, California-based integrated oil and gas company.
The company has a Shiller price-earnings ratio of 10.75, which is the result of a share price of $85.69 as of Dec. 23 and 10-year average inflation-adjusted earnings per share of $7.97 as of the most recent quarter. The industry has a median of 11.92 for the Shiller price-earnings ratio.
The share price has declined by 28.79% over the past year for a market capitalization of $164.95 billion and a 52-week range of $51.60 to $122.72.
GuruFocus has assigned a rating of 5 out of 10 to both the company's financial strength and its profitability.
As of December, the stock has a median recommendation rating of overweight with an average target price of $101.89 per share.
China Merchants Bank Co Ltd
The second company to be under consideration is China Merchants Bank Co Ltd (CIHKY, Financial).
Based in Shenzhen, China, the provider of various financial products and services to clients primarily in the People's Republic of China has a Shiller price-earnings ratio of 16.36. The ratio is the result of a share price of $30.27 as of Dec. 23 and 10-year average inflation-adjusted earnings per share of $1.85 as of the most recent quarter. The industry has a median of 12.44 for the Shiller price-earnings ratio.
The share price has risen by 17.23% over the past year, determining a market capitalization of $152.68 billion and a 52-week range of $19.38 to $33.20.
GuruFocus has assigned a rating of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
As of December, the stock has a median recommendation rating of overweight with an average target price of $44.54 per share.
Royal Dutch Shell PLC
The third company under consideration is Royal Dutch Shell PLC (RDS.A, Financial) (RDS.B, Financial), a major British-Dutch petrochemical company.
Royal Dutch Shell PLC has a Shiller price-earnings ratio of approximately 9.11. This is the result of the combination of the following data:
- A share price of $35.94 for the common stock class A as of Dec. 23.
- A share price of $34.55 for the common stock class B as of Dec. 23.
- 10-year average inflation-adjusted earnings per share of approximately $3.87 as of the most recent quarter.
Common stock class A:
The common stock class A share price declined by 38.77% over the past year, determining a market capitalization of about $140.3 billion and a 52-week range of $21.26 to $61.17.
Common stock class B:
The common stock class B share price declined by 42.17% over the past year, determining a market capitalization of about $134.9 billion and a 52-week range of $19.19 to $62.27.
GuruFocus has assigned a rating of 4 out of 10 to the company's financial strength and of 6 out of 10 to its profitability.
As of December, the stock has a median recommendation rating of overweight with an average target price of about $44.33 per share.
Disclosure: I have no positions in any securities mentioned in this article.
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