3 Stocks With Low Shiller Price-Earnings Ratios

Value investors may want to consider these companies

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Feb 09, 2022
Summary
  • Heartland Financial, Encore Capital Group and Horace Mann Educators could be value opportunities.
  • Their Shiller price-earnings ratios are below the S&P 500 Index's historical average.
  • 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 increases the odds of discovering good value opportunities, in my opinion. Thus, investors may want to consider the following stocks since their Shiller price-earnings ratios are below the S&P 500 Index's historical average of 16.91 as of the time of writing. The Shiller price-earnings ratio is calculated as the last closing share price dividend by 10-year average inflation-adjusted earnings per share.

Heartland Financial USA

The first company investors may want to consider is Heartland Financial USA Inc. (

HTLF, Financial), a Dubuque, Iowa-based regional bank serving individuals and businesses through 133 branches in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California.

The company has a Shiller price-earnings ratio of 15.08, which is the result of a closing share price of $52.03 on Tuesday and 10-year average inflation-adjusted earnings per share of approximately $3.45 as of the September 2021 quarter. The industry has a median of 13.89 for the ratio.

The share price has risen by 12.90% over the past year for a market capitalization of $2.19 billion and a 52-week range of $42.84 to $54.04.

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GuruFocus has assigned a score of 3 out of 10 to the company's financial strength and 4 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $59.75 per share.

Encore Capital Group

The second company investors may want to consider is Encore Capital Group Inc. (

ECPG, Financial), a San Diego-based financial services company providing debt recovery solutions and services to businesses worldwide.

The company has a Shiller price-earnings ratio of 14.86, which is the result of a share price of $69.12 at close on Tuesday and 10-year average inflation-adjusted earnings per share of about $4.66 as of the September 2021 quarter. The industry has a median ratio of 13.89.

The share price has risen by 109.34% over the past year for a market capitalization of $2.04 billion and a 52-week range of $31.82 to $69.90.

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GuruFocus has assigned a rating of 3 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 with an average target price of $69 per share.

Horace Mann Educators

The third company investors may want to consider is Horace Mann Educators Corp. (

HMN, Financial), a Springfield, Illinois-based multiline, property and casualty insurance company. The company also offers other types of insurance products, covering various areas from health care to education.

The company has a Shiller price-earnings ratio of 13.55. The ratio is the result of a share price of $42.74 at close on Tuesday and a 10-year average inflation-adjusted earnings per share of $3.04 as of the September 2021 quarter. The industry has a median ratio of 15.28.

The share price has risen 5.90% over the past year, determining a market capitalization of $1.71 billion and a 52-week range of $36.21 to $44.61.

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

On Wall Street, the stock has a median recommendation rating of hold with an average target price of $43.50 per share.

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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
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