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Alberto Abaterusso
Alberto Abaterusso
Articles (1765) 

3 Low Price-Book Stocks for Value Investors

Wall Street predicts these companies will outperform

November 10, 2019 | About:

If investors pick stocks with a market capitalization of more than $2 billion but less than 1.5 times book value, they will have better odds of discovering value.

Thus, value investors could be interested in the following securities, which have also received positive recommendation ratings from analysts on Wall Street, corroborating expectations for good performers.

Assurant

The first company to consider is Assurant Inc. (NYSE:AIZ). Shares of the New York-based housing and lifestyle insurance company closed at $130.07 on Friday for a market capitalization of $7.9 billion.

The price-book ratio is 1.4 compared to the industry median of 1.15. It is ranked higher than 156 out of 451 companies operating in the insurance industry.

Year to date, the stock has gained 45.4% to a level that is no longer cheap according to the Peter Lynch chart.

On Sept. 16, the company paid a quarterly dividend of 60 cents per common share, generating a 1.85% forward dividend yield as of Friday.

Wall Street issued a buy recommendation rating with an average target price of $144.50 per share.

Radian Group

The second company is Radian Group Inc. (NYSE:RDN). Shares of the Philadelphia-based mortgage and real estate services company closed at $25.28 on Friday for a market capitalization of $5.08 billion.

The price-book ratio is 1.36 compared to the industry median of 1.15. It outperforms 180 out of 413 competitors that operate in the insurance industry.

Year to date, the stock is up 54.5%. Regardless of the increase, the shares still seem to be trading cheaply based on the Peter Lynch chart.

Wall Street recommends an overweight rating for shares of Radian Group with an average target price of approximately $29.23. The rating means the stock is expected to outperform either its industry or the overall market over the next couple of years.

Corteva

The third company is Corteva Inc. (NYSE:CTVA). Shares of the Wilmington, Delaware-based provider of agriculture products closed at $26.2 on Friday for a market capitalization of $19.61 billion.

The price-book ratio of 0.78 is below the industry median of 1.45 and tops 159 out of a total of 210 companies that operate in the agriculture industry.

Year to date, the stock is down 9.6%. GuruFocus has insufficient historical financial data to generate a Peter Lynch chart.

However, the price-book ratio, along with a price-sales ratio of 1.18, suggest it is not an expensive stock.

Sell-side analysts on Wall Street recommend an overweight rating for shares of Corteva and have established an average target price of $30.40.

Corteva will pay a quarterly dividend of 13 cents per common share on Dec. 18, the second distribution ever according to GuruFocus, producing a 1.98% forward dividend yield as of Nov. 8.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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