Seeking Alpha
Growth at reasonable price, long only, value, proprietary formula investing
Profile| Send Message|
( followers)

Every so often, MagicDiligence compiles a list of Magic Formula stocks sorted by their dividend yield, price-to-sales ratio, and price-to-book ratio for investors that like to use those metrics. The result is a list of attractive value stocks for additional research.

Dividend Yield

Dividend yield is a favorite metric for income investors, providing both steady, predictable returns and downside protection. With Magic Formula Investing, you are also buying dividend stocks that are both cheap against earnings and represent a company that efficiently invests capital. The Top 10 Magic Formula highest dividend yield stocks (forward yield) right now are:

TickerCompanyDiv Yield
CHKECherokee, Inc.8.70%
ELNKEarthLink Inc7.50%
RAIReynolds American Inc6.40%
VALUValue Line Inc5.60%
GRMNGarmin Ltd5.50%
LLYEli Lilly and Co5.50%
LOLorillard Inc5.30%
HRBBlock (H&R) Inc.4.20%
LMTLockheed Martin Corp3.50%
RTNRaytheon Co.3.40%

Price-to-Sales Ratio

Using the price-to-sales ratio was a tactic shown to be highly successful by such guru investors as Ken Fisher in Super Stocks and by James O'Shaughnessy in What Works on Wall Street. The Top 10 Magic Formula stocks with lowest price-to-sales ratios are:

TickerCompanyP/S Ratio
ABCAmerisourceBergen Corp0.10
MCKMcKesson Corp0.15
UISUnisys Corp0.22
PRSCProvidence Service Corp (The)0.22
OSKOshkosh Corp0.27
COCOCorinthian Colleges Inc.0.28
EMEEMCOR Group Inc.0.30
GMEGameStop Corp.0.33
KBRKBR Inc0.33
AHCIAllied Healthcare International Inc.0.35

Price-to-Book Ratio

Finally, the price-to-book ratio is often considered the "classic" test of value investing: are you buying a company at or less than the net value of its assets? Price-to-book ratio was a favorite of the "father" of value investing, Ben Graham. The top 10 Magic Formula stocks with lowest price-to-book ratio are:

TickerCompanyP/B Ratio
AHCIAllied Healthcare International Inc.0.66
COCOCorinthian Colleges Inc.0.70
MPAAMotorcar Parts of America Inc0.83
OTCPK:JGBOJiangbo Pharmaceuticals Inc0.86
SUPGSuperGen Inc1.11
ARRSArris Group Inc1.11
GMEGameStop Corp.1.13
AOLAOL Inc1.15
AGXArgan Inc1.18
WDCWestern Digital Corp1.21
Source: Top 10 Stock Dividend Yields, Lowest Price-to-Sales and Price-to-Book Ratios