When screening the market for bargains, investors may want to consider the following three companies, as their stocks have low price-to-median-price-sales values when compared to the average of the S&P 500 (which stands at around 1.73 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 12-month revenue per share times the 10-year median price-sales ratio.
Wall Street sell-side analysts have also issued optimistic recommendation ratings for these stocks, meaning they expect higher share prices over the months ahead.
Pioneer Natural Resources Co
The first stock investors may want to consider is Pioneer Natural Resources Co (PXD, Financial), an Irving, Texas-based independent oil and gas explorer and producer owning total reserves accounting for 31 million barrels of oil, 17 million barrels of natural gas liquids, 88 billion cubic feet of gas and interests in 11 gas processing facilities.
Pioneer Natural Resources Co's price-to-median-price-sales value is 0.49 as of Aug. 26, which ranks higher than 391 out of 511 companies that operate in the oil and gas industry.
The company's revenue per share for the trailing 12 months ended in June 2021 was $55.34. Pioneer Natural Resources Co has a 10-year median price-sales ratio of 5.41. Thus, the median price-sales value is $299.59 as of Aug. 26.
The stock was trading at $6.50 per share at close on Thursday for a market capitalization of $10.59 billion and a 52-week range of $5.75 to $19.97.
Pioneer Natural Resources Co pays quarterly dividends currently. On July 14, the company paid 56 cents per share, while on Sept. 17, it will pay $1.51 per share.
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 6 out of 10 to its profitability.
Wall Street recommends a median rating of buy with an average target price of $207.94 per share for the stock.
Mizuho Financial Group Inc
The second stock investors may want to consider is Mizuho Financial Group Inc (MFG, Financial), a Tokyo-based regional bank providing various banking products and services to consumers, businesses, institutions and corporations.
Mizuho Financial Group Inc's price-to-median-price-sales value is 0.69 as of Aug. 26, which ranks higher than 609 out of 740 companies that operate in the banks industry.
The revenue per share for the trailing 12 months ended in June 2021 was $2.04. Mizuho Financial Group Inc has a 10-year median price-sales ratio of 1.96. Thus, its median price-sales value is $4.02 as of Aug. 26.
The stock was trading at $2.80 per share at close on Thursday for a market capitalization of $35.49 billion and a 52-week range of $2.39 to $3.21.
Currently, Mizuho Financial Group Inc pays semi-annual dividends. On June 18, the company distributed $0.068 per common share.
GuruFocus assigned a score of 3 out of 10 to the company's financial strength and 5 out of 10 to its profitability.
Wall Street recommends a median rating of hold for the stock with an average target price of $3.80 per share.
LyondellBasell Industries NV
The third stock investors may want to consider is LyondellBasell Industries NV (LYB, Financial), a Houston, Texas-based international chemical company.
LyondellBasell Industries NV's price-to-median-price-sales value is 0.92 as of Aug. 26, which ranks higher than 518 out of 671 companies that operate in the chemicals industry.
The revenue per share for the trailing 12 months ended in June 2021 was $105.57. LyondellBasell Industries NV has a 10-year median price-sales ratio of about 1.03. Therefore, the median price-sales value is $109.35 as of Aug. 26.
The stock price was trading at $101.19 per share on Thursday for a market capitalization of $33.85 billion and a 52-week range of $64.21 to $118.01.
Currently, LyondellBasell Industries NV pays dividends. On Sept. 7, the company will distribute a quarterly dividend of $1.13 per common share
GuruFocus assigned a score of 4 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Wall Street recommends a median rating of overweight with an average target price of $120.59 per share for the stock.
Disclosure: I have no position in any securities mentioned.
