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3 Stocks Trading With Low Price-to-Free Cash Flow Ratios

These companies could be value opportunities

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Alberto Abaterusso
Aug 29, 2021

Summary

  • Walmart, Dell Technologies and General Dynamics have low trailing 12-month price-to-free cash flow ratios.
  • Wall Street is also positive about these companies.
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If you want to increase your chances of success when attempting to discover value opportunities, one method is to look for stocks with trailing 12-month price-to-free cash flow ratios lower than that of the S&P Global Index, which stands at around 29.82.

Therefore, investors could be interested in the following stocks, as they meet the above criteria and are recommended by sell-side analysts on Wall Street.

Walmart

The first stock investors could be interested in is Walmart Inc. (

WMT, Financial), a Bentonville, Arkansas-based retail giant.

Walmart’s price-to-free cash flow ratio is about 23.26 as of Aug. 27, ranking higher than 45 out of 216 companies that operate in the retail - cyclical industry.

The free cash flow per share for the trailing 12 months ended in July 2021 stood at $6.30.

Due to a 5.52% increase that occurred over the past year, the stock traded at $146.52 per share at close on Friday for a market capitalization of $410.57 billion and a 52-week range of $126.28 to $153.6597.

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Walmart pays dividends in the amount of 55 cents per share every quarter. The next payment is scheduled for Sept. 7.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of approximately $168.84 per share.

Dell Technologies

The second stock investors could be interested in is Dell Technologies Inc. (

DELL, Financial), a Round Rock, Texas-based developer and manufacturer of IT hardware, software and high technology solutions, selling its products and services to global customers.

Dell Technologies' price-to-free cash flow ratio is 6.09 as of Aug. 27, ranking higher than 86% out of 1,271 companies that operate in the hardware industry.

The company's free cash flow per share for the trailing 12 months ended in April 2021 was $15.92.

Due to a 46.72% increase that happened over the past year, the stock was trading at $97 per share at close on Friday for a market capitalization of $74.04 billion and a 52-week range of $58.88 to $104.62.

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Dell Technologies does not pay dividends.

GuruFocus assigned a score of 3 out of 10 to both the company's financial strength and its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $119.21 per share.

General Dynamics

The third stock investors could be interested in is General Dynamics Corp. (

GD, Financial), a Falls Church, Virginia-based aerospace and defense company.

General Dynamics' price-to-free cash flow ratio is 14.54 as of Aug. 27, ranking higher than 63% of 131 companies that operate in the aerospace and defense industry.

The company's free cash flow per share for the trailing 12 months ended in June 2021 was $13.74.

As a result of 33.73% increase that took place over the past year, the stock was trading at $199.72 per share at close on Friday for a market capitalization of $55.83 billion and a 52-week range of $129.17 to $201.15.

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General Dynamics pays dividends in the amount of $1.190 per share every quarter. The next payment is scheduled for Nov. 12.

GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 8 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $215 per share.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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