Screening for securities that more than double 20-year high-quality corporate bonds in terms of a higher earnings return increases the likelihood of bumping into value.
These bonds represent corporate loans issued by triple-A, double-A and single-A-rated companies. The holders of these 20-year high-quality corporate bonds receive a 3.82% monthly spot rate, according to the Federal Reserve Bank of St. Louis.
Therefore, the following companies have a price-earnings ratio of less than 13.09 (the price-earnings ratio is the inverse of the earnings yield).
Shares of UniCredit SpA (OTCPK:UNCFF) were $11.39 at close on Friday for a market capitalization of $25.44 billion. The Italian global bank has an earnings yield of 20.41% versus the industry median of 9% and a price-earnings ratio of 4.9 versus the industry median of 11.15.
The stock also has a price-book ratio of 0.4 versus the industry median of 0.99 and a price-sales ratio of 1.27 versus the industry median of 2.78.
The stock price was down 0.7% year to date. The closing share price on Friday was 13.8% above the 52-week low of $10.01 and 46% below the 52-week high of $16.63.
According to the Peter Lynch chart, the stock is not expensive.
GuruFocus assigned a low rating of 3 out of 10 for the financial strength and for the profitability and growth of the company.
The stock has a moderate buy recommendation rating with an average target price of $15.32.
Shares of United Airlines Holdings Inc. (UAL, Financial) were around $86.3 at close on Friday for a market capitalization of $22.17 billion. The American provider of air transportation services worldwide has an earnings yield of 11.44% versus the industry median of 8.26% and a price-earnings ratio of 8.74 versus the industry median of 12.11.
The stock also has a price-book ratio of 2.21 versus the industry median of 1.53 and a price-sales ratio of 0.55 versus the industry median of 0.59.
The stock was up 3% so far this year. The closing price on Friday was 12% above the 52-week low of $77.02 and 13.4% below the 52-week high of $97.85.
According to the Peter Lynch chart, the stock appears trading cheaply.
United Airlines Holdings has a moderate rating of 4.7 out of 10 for financial strength and a very positive rating of 7 out of 10 for profitability and growth.
The stock has a moderate buy recommendation rating with an average target price of $105.80.
Shares of KeyCorp (KEY, Financial) traded at $16.80 at close on Friday with a market capitalization of $16.85 billion.
KeyCorp is the Cleveland, Ohio-based parent company of KeyBank. The regional bank has an earnings yield of 10% versus the industry median of 9% and a price-earnings ratio of 10 versus the industry median of 11.13.
The bank also has a price-book ratio of 1.14 versus the industry median of 0.99 and a price-sales ratio of 2.79 versus the industry median of 2.76.
The stock price increased 13.7% so far this year. The closing price on Friday was 23% above the 52-week low of $13.66 and 27.2% below the 52-week high of $21.37.
The stock seems cheap based on the Peter Lynch chart.
GuruFocus assigned a very low financial strength rating of 2.6 out of 10 and a low profitability and growth rating of 3 out of 10.
The stock has a moderate buy recommendation rating with an average target price of $19.67.
Disclosure: I have no positions in any securities mentioned.
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