A Trio of Capital-Intensive Stocks to Consider

Investors could be interested in these businesses due to their compelling price-to-tangible-book-value ratios

Summary
  • AerCap Holdings NV, Rayonier Advanced Materials Inc and Hudbay Minerals Inc are more undervalued than most of their competitors in terms of a better price-to-tangible-book-value ratio
  • The price-to-tangible-book-value ratio is preferred to the price-book ratio with regard to capital intensive companies, as the evaluation of their business mainly derives from tangible assets
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When seeking value opportunities among capital-intensive businesses, investors may want to consider the three stocks listed below, as their price-to-tangible-book-value ratios are more appealing than their respective industry medians.

The price-to-tangible-book-value ratio is preferred to the price-book ratio for these publicly traded companies, as the appraisal of their business mainly derives from tangible assets.

AerCap Holdings NV

The first stock that matches the criteria is AerCap Holdings NV (AER, Financial), a Dublin, Ireland-based owner and manager of a fleet of 1,330 aircraft and on order aircraft across airports in China, Hong Kong, Macau, the U.S., Ireland and internationally.

AerCap Holdings NV has a price-to-tangible-book-value ratio of 0.94, which is more appealing than the industry median of 1.6 and ranks higher than 72.5% of the 818 competitors that operate in the transportation industry.

The share price was approximately $59.90 per share as of early trading on Sept. 29. The tangible book value per share was approximately $64.14 as of June 29.

The stock has a market capitalization of $8.01 billion and a 52-week range of $24.29 to $63.49.

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GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 7 out of 10 for the profitability rating of the company.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $73 per share.

Rayonier Advanced Materials Inc

The second stock that meets the criteria is Rayonier Advanced Materials Inc (RYAM, Financial), a Jacksonville, Florida-based manufacturer and global seller of cellulose specialty products.

Rayonier Advanced Materials Inc's price-to-tangible-book-value ratio of 0.64 is more appealing than the industry median of 2.4, and it ranks higher than 91.2% of 1,350 companies that operate in the chemicals industry.

The stock price was approximately $7.60 per share as of early trading on Sept. 29, while the tangible book value per share was $11.80 as of the June 2021 quarter.

The stock has a market capitalization of $481.85 million and a 52-week range of $3 to $11.30.

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GuruFocus assigned a score of 3 out of 10 for the financial strength rating and 7 out of 10 for the profitability rating of the company.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $8.83 per share.

Hudbay Minerals Inc

The third stock that meets the criteria is Hudbay Minerals Inc (HBM, Financial), a Toronto, Canada-based mining company engaging in the discovery, production and marketing of base and precious metals in the Americas.

Hudbay Minerals Inc's price-to-tangible-book-value ratio of 0.97 appeals more than the industry median of 2.2, ranking better than 81.91% of 2,040 companies that operate in the metals and mining industry.

The stock price was trading at $5.90 per share as of early trading on Sept. 29, while the tangible book value per share was $6.10 as of June 29.

The stock has a market capitalization of $1.54 billion and a 52-week range of $3.99 to $9.60.

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GuruFocus assigned a score of 4 out of 10 for both the financial strength rating and the profitability rating of the company.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $10.06 per share.

Disclosure: I have no position in any security mentioned.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure