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4 Stocks With High Forward Rates of Return

Value investors could be interested in these businesses

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Nov 05, 2021
Summary
  • Winnebago Industries Inc, Meredith Corp, Stride Inc and Marten Transport Ltd. are yielding more than double the return of 20-year high-quality market corporate bonds.
  • Donald Yacktman's forward rate of return is calculated as 'normalized free cash flow yield plus real growth plus inflation.'
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Donald Yacktman, a well-known value investor and founder of the AMG

Yacktman Fund (Trades, Portfolio), takes the "forward rate of return" highly into account when he wants to evaluate the attractiveness of a stock. He calculates this valuation ratio as "normalized free cash flow yield plus real growth plus inflation."

Value investors could be interested in the following four U.S.-listed equities, as their forward rates of return are more than doubling the return on 20-year high-quality market corporate bonds, which is 3.00% as of the writing of this article.

Winnebago Industries Inc

The first stock that could be of interest to investors is Winnebago Industries Inc (

WGO, Financial), a Forest City, Iowa-based manufacturer and seller of recreational vehicles and marine products in North America.

Winnebago Industries Inc's forward rate of return is 25.6%, which ranks higher than 94% of 52 companies that operate in the vehicles and parts industry.

The share price has increased by 50.65% over the past year to close at $72.32 on Thursday for a market cap of $2.42 billion. The 52-week range is $44.33 to $87.53. Its price-sales ratio is 0.68 and its price-book ratio is 2.26.

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ZAZOVE ASSOCIATES LLC, BlackRock Inc. and VANGUARD GROUP INC are among the largest fund holders of the company with 33.66%, 15.76% and 7.61% of shares outstanding, respectively.

Meredith Corp

The second stock that could appeal to value investors is Meredith Corp (

MDP, Financial), a Des Moines, Iowa-based diversified media operator with publishing activities mainly in the United States of America.

Meredith Corp's forward rate of return is 11.24%, which ranks higher than 60% of 68 companies that operate in the media-diversified industry.

The share price has gained 320.43% over the past year to trade at $58.23 at close on Thursday for a market cap of $2.67 billion and a 52-week range of $13.59 to $58.83. Its price-earnings ratio is 9.89 and its price-book ratio is 3.93.

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BlackRock Inc. is the largest top fund holder of the company with 14.25% of shares outstanding. The asset management firm is followed by FMR LLC with 9.86% and VANGUARD GROUP INC with 9.38%.

Stride Inc

The third stock to consider is Stride Inc (

LRN, Financial), a Herndon, Virginia-based provider of online curriculum, software systems and educational services to promote individualized learning for U.S. and international students between 5 and 12 years old.

Stride Inc's forward rate of return is 17.10%. Though lower than the educational industry, it is almost six times higher than the return on 20-year high-quality market corporate bonds.

The share price has climbed 45.71% over the past year to trade at $36.47 at close on Thursday for a market cap of $1.56 billion and a 52-week range of $29.39 to $38.33. Its price-earnings ratio is 28.71 and its price-book ratio is 2.11.

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CALAMOS ADVISORS LLC, ZAZOVE ASSOCIATES LLC and VANGUARD GROUP INC are the largest amid the top fund holders of the company with 31.23%, 8.84% and 8.87% of shares outstanding, respectively.

Marten Transport Ltd

The fourth stock that could be of interest to value investors is Marten Transport Ltd. (

MRTN, Financial), a Mondovi, Wisconsin-based operator of a temperature-sensitive truckload carrier for shipping companies in North America.

Marten Transport Ltd.’s forward rate of return is 6.42%. Though lower than 85% of 59 companies in the transportation industry, it is more than double the return on 20-year high-quality market corporate bonds.

The share price has risen by 6.84% over the past year to trade at $17.33 at close on Thursday for a market cap of $1.44 billion and a 52-week range of $14.72 to $19.08. Its price-earnings ratio is 17.68 and its price-book ratio is 2.28.

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BlackRock Inc. and VICTORY CAPITAL MANAGEMENT INC are the largest amid the top fund holders of the company with 11.61% and 7.28% of shares outstanding, respectively.

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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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