If you want to increase your likelihood to discover value opportunities, one method is to screen the market for stocks with trailing 12-month price-to-free-cash-flow ratios lower than that of the S&P 500 Index, which stands at around 14.48 as of the writing of this article.
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.
Royal Bank of Canada
The first stock investors could be interested in is Royal Bank of Canada (RY, Financial), a Toronto, Canada-based bank providing diversified financial services to consumers, households and businesses internationally.
Royal Bank of Canada’s price-to-free-cash-flow ratio is about 3.13 as of early trading on Wednesday, ranking higher than 63% of 1,129 companies that operate in the banks industry.
The free cash flow per share for the trailing 12 months ended in October 2021 stood at $32.70.
Due to a 23.6% increase that took place over the past year, the stock was at $102.46 per share in early trading on Wednesday for a market capitalization of $146.16 billion and a 52-week range of $79.82 to $108.09.
Royal Bank of Canada pays dividends in the amount of 1.20 Canadian dollars ($0.95) per share every quarter. The next payment will be made on Feb. 24, 2022.
On Wall Street, the stock has a median recommendation rating of hold with an average target price of approximately $115 per share.
Petroleo Brasileiro SA Petrobras
The second stock investors could be interested in is Petroleo Brasileiro SA Petrobras (PBR, Financial), a Rio De Janeiro, Brazil-based oil and gas integrated operator.
Petroleo Brasileiro SA Petrobras's price-to-free-cash-flow ratio is 1.70 as of early trading on Wednesday, ranking higher than 92% of the 53 companies that operate in the oil and gas industry.
The company's free cash flow per share for the trailing 12 months ended in September 2021 was $6.66.
Due to a 7.10% increase that occurred over the past year, the stock was trading at $11.31 per share in early trading on Wednesday for a market capitalization of $70.59 billion and a 52-week range of $7.06 to $12.38.
Petroleo Brasileiro SA Petrobras pays dividends every six months. The next payment, $1.173 per share, will be made on Dec. 22.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $13.43 per share.
Takeda Pharmaceutical Co. Ltd.
The third stock investors could be interested in is Takeda Pharmaceutical Co. Ltd. (TAK, Financial), a Tokyo-based manufacturer of specialty generic drugs.
Takeda Pharmaceutical Co. Ltd.’s price-to-free-cash-flow ratio is 6.07 as of early trading on Wednesday, ranking higher than 93% of 484 companies that operate in the drug manufacturing industry.
The company's free cash flow per share for the trailing 12 months ended in September 2021 was $2.28.
Due to a 26% drop that took place over the past year, the stock was trading at $13.84 per share in early trading on Wednesday for a market capitalization of $43.60 billion and a 52-week range of $13.17 to $19.97.
Takeda Pharmaceutical Co. Ltd. pays dividends every six months. The next payment, $0.397 per share, will be made on Dec. 13.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $18.97 per share.
