A Trio of Stocks With High Forward Rates of Return

Value investors could be interested in these businesses

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Jul 17, 2022
Summary
  • Petroleo Brasileiro SA Petrobras, Crescent Point Energy Corp and International Game Technology PLC generate more than twice the yield of 20-year high-quality market corporate bonds.
  • 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, took the forward rate of return into account when he evaluated the attractiveness of a stock. This valuation ratio is calculated as normalized free cash flow yield plus real growth plus inflation.

Value investors could be interested in the following U.S.-listed equities as their forward rates of return are more than double the return on 20-year high-quality market corporate bonds, which is 4.93% as of the time of writing.

Petroleo Brasileiro SA Petrobras

The first stock that could be of interest is Petroleo Brasileiro SA Petrobras (

PBR, Financial), a Brazilian integrated oil and gas operator.

Petroleo Brasileiro SA Petrobras’ forward rate of return is 37.56% (as of March 2022), which ranks higher than 93.59% of 593 companies that operate in the oil and gas industry.

The share price has increased by 10.21% over the past year to close at $11.23 on Friday for a market cap of $70.44 billion. The 52-week range is $9.20 to $16.29. Its price-earnings ratio is 2.73 and its price-book ratio is 0.86.

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GQG Partners LLC,

Baillie Gifford (Trades, Portfolio) and Arrowstreet Capital, Limited Partnership are among the largest institutional shareholders of the company with 2.98%, 1.10% and 0.72% of shares outstanding.

Crescent Point Energy Corp

The second stock that could be of interest to value investors is Crescent Point Energy Corp. (

CPG, Financial), a Calgary, Canada-based fossil fuel exploration company and producer of light and medium crude oil, liquid natural gas and reserves in western Canada and the United States.

Crescent Point Energy Corp.’s forward rate of return is 17.72% (as of March 2022), which ranks higher than 74.37% of the 593 companies that operate in the oil and gas industry.

The share price has risen by 109.12% over the past year to trade at $6.65 at close on Friday for a market cap of $3.74 billion and a 52-week range of $2.75 to $10.96. Its price-earnings ratio is 1.46 and its price-book ratio is 0.73.

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Franklin Resources Inc., BlackRock Inc. and Connor, Clark & Lunn Investment Management Ltd. are among the largest institutional shareholders of the company with 5.37%, 4.95% and 3.17% of shares outstanding.

International Game Technology PLC

The third stock that could be of interest to value investors is International Game Technology PLC (

IGT, Financial), a London, United Kingdom-based operator of global digital lottery, gaming and betting in the U.S. and internationally.

International Game Technology PLC’s forward rate of return is 10.91% (as of March 2022), which ranks higher than 73.49% of the 562 companies that operate in the travel and leisure industry.

The stock price has fallen nearly 5% over the past year to trade around $18 on Friday, giving it a market cap of $3.65 billion and a 52-week range of $16.46 to $32.95. Its price-earnings ratio is 7.86 and its price-book ratio is 2.76.

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BlackRock Inc., Massachusetts Financial Services Co /Ma/ and Boston Partners are among the largest institutional shareholders of the company with 4.74%, 3.65% and 3.28% of shares outstanding.

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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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