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A Trio of Low Shiller Price-Earnings Ratio Stocks

Value investors may want to consider these businesses

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Oct 24, 2021
Summary
  • KB Home, Western Midstream Partners LP and Dynex Capital Inc could be value opportunities
  • Their Shiller price-earnings ratios are below the S&P 500 Index's historical average of 16.88 as of the writing of this article
  • The ratio is calculated as the last closing share price dividend by 10-year average inflation-adjusted earnings per share
  • Wall Street is positive about these stocks
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Picking stocks with compelling Shiller price-earnings ratios raises the likelihood to discover value opportunities, in my opinion. Thus, investors may want to consider the following stocks, as their Shiller price-earnings ratios are standing below the S&P 500 Index's historical average of 16.88 as of the writing of this article.

Western Midstream Partners LP

The first company investors may want to consider is Western Midstream Partners LP (

WES, Financial), a Woodlands, Texas-based natural gas and crude oil midstream operator in the United States.

The company has a Shiller price-earnings ratio of 15.79, which is the result of a share price of $22.74 at close on Friday and 10-year average inflation-adjusted earnings per share of approximately $1.44 as of the June 2021 quarter. The industry has a median of 15.88 for the Shiller price-earnings ratio.

The share price has risen by 154.4% over the past year for a market capitalization of $9.39 billion and a 52-week range of $7.395 to $23.78.

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GuruFocus has assigned a score of 3 out of 10 to the company's financial strength rating and 7 out of 10 to its profitability rating.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $25.63 per share.

KB Home

The second company investors may want to consider is KB Home (

KBH, Financial), a Los Angeles-based homebuilder.

The company has a Shiller price-earnings ratio of 15.34, which is the result of a share price of $41.10 at close on Friday and 10-year average inflation-adjusted earnings per share of about $2.68 as of the most recent fiscal quarter ended on Aug. 31, 2021. The industry has a median of 15.24 for the Shiller price-earnings ratio.

The share price has risen by 15.2% over the past year for a market capitalization of $3.6 billion and a 52-week range of $30.25 to $52.48.

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GuruFocus has assigned a rating of 4 out of 10 to the company's financial strength and 6 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $53.55 per share.

Dynex Capital Inc

The third company investors may want to consider is Dynex Capital Inc. (

DX, Financial), a Glen Allen, Virginia-based real estate investment trust.

The company has a Shiller price-earnings ratio of 9.57. The ratio is the result of a share price of $17.81 at close on Friday and 10-year average inflation-adjusted earnings per share of $1.86 as of the June 2021 quarter. The industry has a median of 16.12 for the Shiller price-earnings ratio.

The share price has increased 13% over the past year, determining a market capitalization of $616.08 million and a 52-week range of $15.49 to $20.50.

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GuruFocus has assigned a rating of 5 out of 10 to the company's financial strength and 3 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $19.50 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.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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