Interested in finding high-yield large-caps to add to your portfolio for the new year?
We ran a screen on large-cap companies (market caps above $10 billion) for those yielding more than 3%. Large-cap companies are considered more stable than their smaller counterparts.
We then screened for those stocks that are undervalued by levered free cash flow/enterprise value. This will provide a starting point for your analysis. This ratio gives us the money that the business can use to grow and pay dividends to shareholders.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks are a bargain? Use this list as a starting point for your own analysis.
1. Nokia Corporation (NOK): Provides Internet and digital mapping and navigation services worldwide. Market cap at $17.77B, most recent closing price at $4.62. Levered free cash flow at $1.39B vs. enterprise value at $12.23B (implies a LFCF/EV ratio at 11.37%). Dividend yield at 5.47%.
2. Statoil ASA (STO): Engages in the exploration, production, transportation, refining, and marketing of petroleum and petroleum-derived products. Market cap at $82.01B, most recent closing price at $25.72. Levered free cash flow at $11.55B vs. enterprise value at $86.17B (implies a LFCF/EV ratio at 13.4%). Dividend yield at 4.15%.
3. Seagate Technology PLC (STX): Designs, manufactures, markets, and sells hard disk drives for the enterprise, client compute, and client non-compute market applications in the United States and internationally. Market cap at $12.82B, most recent closing price at $33.97. Levered free cash flow at $2.27B vs. enterprise value at $13.07B (implies a LFCF/EV ratio at 17.37%). Dividend yield at 4.47%.
*FCF data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.