Screening for stocks with compelling Shiller price-earnings ratios increases the likelihood of unearthing value opportunities, in my opinion. Thus, investors may want to consider the three stocks listed below, as their Shiller price-earnings ratios are trading lower than the S&P 500 Index's historical average of 16.78 as of Feb. 12.
Allstate Corp
The first company to consider is Allstate Corp (ALL, Financial), a Northbrook, Illinois-based provider of insurance products to clients in North America.
The company has a Shiller price-earnings ratio of 15.07, which is the result of a share price of $104.43 as of Feb. 12 and 10-year average inflation-adjusted earnings per share of $6.93 as of the September quarter. The industry has a median of 14.59 for the Shiller price-earnings ratio.
The share price has declined by 15.97% over the past year for a market capitalization of $31.77 billion and a 52-week range of $64.13 to $125.92.
GuruFocus has assigned a rating of 4 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
As of February, the stock has a median recommendation rating of overweight with an average target price of $124.93 per share on Wall Street.
Banco Santander (Brasil) SA
The second company investors may want to consider is Banco Santander (Brasil) SA (BSBR, Financial), a São Paulo, Brazil-based bank that serves individuals and businesses of any size in Brazil and internationally.
The stock has a Shiller price-earnings ratio of 14.82. The ratio is the result of a share price of $7.56 as of Feb. 12 and 10-year average inflation-adjusted earnings per share of $0.51 as of the September quarter. The industry has a median of 13.10 for the Shiller price-earnings ratio.
The share price has fallen by 18.62% over the past year, determining a market capitalization of $56.40 billion and a 52-week range of $3.69 to $9.50.
GuruFocus has assigned a rating of 3 out of 10 to the company's financial strength and 5 out of 10 to its profitability.
As of February, the stock has a median recommendation rating of overweight with an average target price of $8.51 per share on Wall Street.
Mitsubishi Corp
The third company to consider is Mitsubishi Corp (MSBHF, Financial), a Tokyo, Japan-based conglomerate company engaging in several sectors including finance, industrials, energy, chemicals and food and beverages.
The stock has a Shiller price-earnings ratio of 11.65. The ratio is the result of a share price of $27.6 as of Feb. 12 and 10-year average inflation-adjusted earnings per share of $2.37 as of the quarter that ended on March 31, 2020. The industry has a median of 15.02 for the Shiller price-earnings ratio.
The share price has risen by 8.7% over the past year, determining a market capitalization of $40.28 billion and a 52-week range of $18.86 to $27.60.
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 February, the stock has a median recommendation rating of overweight with an average target price of 2,878.89 Japanese Yen (about $27.43) per share on Wall Street.
Disclosure: I have no positions in any securities mentioned in this article.
Read more here:
- 3 Stocks With a Solid History of Sales and Earnings Growth
- 3 Stock Picks for the Value Investor
- A Trio of Fast Growing Earnings Stocks
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