Screening for securities that are more than doubling 20-year high-quality corporate bonds' earnings yields raises the possibility of gaining impressive margins.
These bonds represent corporate loans issued by companies that are triple-A, double-A and single-A rated.
The Federal Reserve Bank of St. Louis indicated that the monthly average spot rate of the 20-year bond is 3.97%.
As a result, the following stocks have an earnings yield of more than 7.94% or a price-earnings ratio of less than 12.59 as of July 26.
Moreover, the Peter Lynch chart suggests that these stocks are cheap.
Discover Financial Services (DFS, Financial) traded around $92.91 per share at close on Friday for a market capitalization of $29.64 billion. The Riverwoods, Illinois-based provider of direct banking and payment services in the US. .has an earnings yield of 9.2%, which is nearly in line with the industry median of 9.1% or a price-earnings ratio of 10.87 versus the industry median of 11.
Also, the price-book ratio is 2.61 versus the industry median of 0.95, and the price-sales ratio is 2.88 compared to the industry median of 2.3.
The share price increased 57.53% so far this year. The share price at close Friday was 71% above the 52-week low of $54.36 and only 7% from the 52-week high of $92.98.
The stock seems to be priced fairly, according to the below Peter Lynch chart.
GuruFocus assigned a rating of 4 out of 10 for financial strength, and for profitability and growth.
The stock has an overweight recommendation rating and an average target price of $92.43.
PACCAR Inc. (PCAR, Financial) traded around $71.67 per share at close on Friday for a market capitalization of $24.82 billion. The Bellevue, Washington-based worldwide producer of commercial trucks has an earnings yield of 9.5% versus the industry median of 9.1% or a price-earnings ratio of 10.56 versus the industry median of 11.02.
The stock also has a price-book ratio of 2.59 versus the industry median of 1.62 and a price-sales ratio of 0.99 compared to the industry median of 0.54.
The stock is up 25.43% so far this year. The share price at close Friday was 34.1% above the 52-week low of $53.43 and just 1.9% from the 52-week high of $73.
According to the Peter Lynch chart, the stock appears to trade cheaply.
PACCAR has a GuruFocus financial strength rating of 7 out of 10 and profitability and growth rating of 8 out of 10.
The stock has a hold recommendation rating and an average target price of $71.35 per share.
Fresenius Medical Care AG & Co. KGaA (FMS, Financial) traded around $37.59 per share at close on Friday with a market capitalization of approximately $22.59 billion. The German worldwide provider of kidney dialysis care services has an earnings yield of 9.5% versus the industry median of 4.1% or a price-earnings ratio of 10.52 versus the industry median of 24.53.
The stock also has a price-book ratio of 1.72 versus the industry median of 2.24 and a price-sales ratio of 1.24 versus the industry median of 1.63.
Year to date, the share price increased 16.05%. The share price at close Friday was 21.3% above the 52-week low of $30.99 and 42.1% from the 52-week high of $53.4.
The stock appears cheap according to the Peter Lynch chart.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability and growth rating of 8 out of 10.
The stock has an overweight recommendation rating and an average target price of $46.47, representing a 23.6% increase from the share price at close on Friday.
Disclosure: I have no positions in any securities mentioned.
Read more here:Ă‚
Analysts Recommend Buying These 2 Falling KnivesÂ
2-High Performing Stocks for the Value InvestorÂ
Yamana Gold Is Predicted to OutperformÂ
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
