In search of bargains, investors may be interested in the following three companies, as their stocks have a low price-to-median-price-sales-value when compared to the average of the S&P 500 (which stands around 1.6 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 the price-sales ratio. It requires investors to divide the current share price by the trailing twelve-month revenue per share times the 10-year median price-sales ratio.
Wall Street is also positive about these securities, as sell-side analysts have issued optimistic recommendation ratings for them.
Carlisle Companies Inc
The first stock to consider is Carlisle Companies Inc (CSL, Financial), a Scottsdale, Arizona-based diversified manufacturer of engineered products for companies operating in the building, aerospace and defense, medical, electronics and automotive industries.
Carlisle Companies Inc's price-to-median-ps-value is 1.09 as of Feb. 19, which ranks higher than 46.76% of 710 companies that operate in the construction industry.
Carlisle Companies Inc's revenue per share for the trailing twelve months ended in December 2020 was $77.42. Carlisle Companies Inc has a 10-Year Median price-sales ratio of 1.78. Thus, the median price-sales value is $138 as of Feb. 19.
The stock price traded at $150.41 per share at close on Friday for a market capitalization of $8.02 billion and a 52-week range of $97.55 to $160.61.
Currently, Carlisle Companies Inc pays a quarterly dividend of 52.5 cents per common share with the last payment issued last year on Dec. 1 and the next one to distribute on March 1. The payment generates a trailing 12-month dividend yield of 1.38% and a forward dividend yield of 1.4% as of Feb. 19.
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 a median rating of overweight with an average target price of $174.88 per share for the stock.
Cognizant Technology Solutions Corp
The second stock to consider is Cognizant Technology Solutions Corp (CTSH, Financial), a Teaneck, New Jersey-based professional provider of consulting, technology and outsourcing services worldwide.
Cognizant Technology Solutions Corp's price-to-median-ps-value is 0.80 as of Feb. 19, which ranks higher than 81% of 828 companies that operate in the software industry.
Cognizant Technology Solutions Corp's revenue per share for the trailing twelve months ended in December 2020 was $30.76. Cognizant Technology Solutions Corp has a 10-year median price-sales ratio of 3. Thus, its median price-sales value is $92.02 as of Feb. 19.
The stock price was trading at $73.64 per share at close on Friday for a market capitalization of $39.07 billion and a 52-week range of $40.01 to $82.73.
Currently, Cognizant Technology Solutions Corp pays quarterly dividends to its shareholders. On Feb. 26, the company will pay 24 cents per common share, reflecting a 9.1% increase from the 22 cents paid on Nov. 30. The payment reflects a trailing 12-month dividend yield of 1.22% and a forward dividend yield of 1.3% as of Feb. 19.
GuruFocus assigned a score of 7 out of 10 to the company's financial strength and of 8 out of 10 to its profitability.
Wall Street recommends a median rating of overweight for the stock with an average target price of $85.19 per share.
Brookfield Infrastructure Partners LP
The third stock to consider is Brookfield Infrastructure Partners LP (BIP, Financial), a Hamilton, Bermuda-based global operator of natural gas pipelines, electricity and natural gas connections, as well as coal export terminals. The company is also engaged in the transportation and storage services of utilities, as well as the data infrastructure businesses.
Brookfield Infrastructure Partners LP's price-to-median-ps-value is 0.56 as of Feb. 19, which ranks higher than 84% of 309 companies that operate in the utilities–regulated industry.
Brookfield Infrastructure Partners LP's revenue per share for the trailing twelve months ended in December 2020 was at $30.142. Brookfield Infrastructure Partners LP has a 10-year median price-sales ratio of about 3.15. Therefore, the median price-sales value is $95.22 as of Feb. 19.
The stock price was trading at $53.20 per share on Friday for a market capitalization of $15.60 billion and a 52-week range of $23.01 to $54.74.
Currently, Brookfield Infrastructure Partners LP pays a quarterly dividend to its shareholders with the last payment, 48.5 cents per common share, made on Dec. 31. The next payment of 51 cents per common share is set to issue on March 31. The distribution produces a trailing 12-month dividend yield of 3.75% and a forward dividend yield of 3.83% as of Feb. 19.
GuruFocus assigned a score of 3 out of 10 to the financial strength and of 7 out of 10 to the profitability of the company.
Wall Street recommends a median rating of overweight with an average target price of $58.83 per share for the stock.
Disclosure: I have no position in any security mentioned.
Read more here:
- A Trio of Stocks Trading Near the GF Value Line
- 3 Magic Formula Stocks for the Value Investor
- 3 Stocks Trading Below Intrinsic Value
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