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Alberto Abaterusso
Alberto Abaterusso
Articles (2532) 

3 Low Forward Price-Earnings Ratio Stock Picks

Their forward-looking valuations are trading below the S&P 500's historical average

January 08, 2021 | About:

The three securities listed below could be of interest to investors, as their forward price-earnings ratios are lower than the S&P 500's historical average of 15. The projections of future earnings are based on data from Morningstar analysts.

Merck & Co. Inc

The first stock that qualifies is Merck & Co. Inc (NYSE:MRK), a Kenilworth, New Jersey-based drug giant.

Merck has a forward price-earnings ratio of 12.80 (versus the industry median of 18.61), which results from Thursday's closing price of $84.02 per share and analyst expectations for net earnings per share (EPS) of approximately $6.56 for the next full fiscal year.

The stock price has fallen by nearly 6% over the past year for a market capitalization of $212.57 billion and a 52-week range of $65.25 to $92.06.

GuruFocus has assigned a rating of 5 out of 10 for the company's financial strength and a rating of 8 out of 10 for its profitability.

Wall Street sell-side analysts recommend an overweight median rating with an average price target of $96.84 per share for the stock.

AbbVie Inc

The second stock that qualifies is AbbVie Inc (NYSE:ABBV), a North Chicago, Illinois-based drug major.

AbbVie has a forward price-earnings ratio of 8.81 (versus the industry median of 18.61), which derives from Thursday's closing price of $106.71 per share and analyst expectations for EPS of approximately $12.11 for the next full fiscal year.

The stock price has risen by 18.3% over the past year for a market capitalization of $188.39 billion and a 52-week range of $62.55 to $109.15.

GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and a rating of 8 out of 10 for its profitability.

Wall Street sell-side analysts recommend an overweight median rating with an average price target of $116.80 per share for the stock.

Novavax Inc

The third stock that qualifies is Novavax Inc (NASDAQ:NVAX), a Gaithersburg, Maryland-based late-stage biotech developer of vaccines to prevent serious infectious diseases.

Novavax has a forward price-earnings ratio of 8.25 (versus the industry median of 30.19), which derives from Thursday's closing price of $128.18 per share and analysts' expectations for EPS of approximately $15.54 for the next full fiscal year.

The stock price has skyrocketed over the past year for a market capitalization of $8.16 billion and a 52-week range of $3.65 to $189.40.

GuruFocus has assigned a rating of 3 out of 10 for the company's financial strength and a rating of 1 out of 10 for its profitability.

Wall Street sell-side analysts recommend an overweight median rating with an average price target of $188.50 per share for the stock.

Disclosure: I have no positions in any securities 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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