While I made my daily research on several stock market screeners, one question came deeply into my mind. When the markets are so expensive, who are the cheapest stocks, not by P/E but in terms of cash flow or Ebitda. I also included the Cash and debt of the company.
So, the good thing is that you can buy stocks in every market cycle but you must be careful with your investment spending.
Your final return depends in the end on your inital investment cost and if you buy at a high price, your return will fall into a low or negative area.
Good to know that dividends can upper your yield but my experience is that it could be very painful for an investor to look at a suffering return over years.
These are my criteria:
- Market Cap over 15 Billion
- Dividend Yield in the higher yield space over 3 percent
- Cheapest Enterprise-To-Ebitda Ratio on the market
My screen delivered some interesting results in the large cap area: Oil companies are top.
COP, CVX are the best results in terms of EV/EBITDA. Both have a ratio of around 5 which is very comfortable in the current situation but what about Russia and the Middle East crises?
My second best results came from the technology space: Intel and Verizon. Warren Buffett added his VZ stake by one third on the past quarter and he might be right because VZ is much cheaper than rival AT&T. The EV/EBITDA ratio is only at 6.35 while T has a ratio of 9.66.
Healthcare is also good positioned with Merck, Pfizer and Eli Lilly but those are suffering on the patent cliff.
These are the best results in terms of lowest debt-to-equity ratio:
#1 ConocoPhillips (NYSE:COP) has a market capitalization of $98.66 billion. The company employs 19,200 people, generates revenue of $56.185 billion and has a net income of $8.037 billion. ConocoPhillips's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20.761 billion. The EBITDA margin is 36.95 percent (the operating margin is 22.78 percent and the net profit margin 14.30 percent).
Financial Analysis: The total debt represents 18.35 percent of ConocoPhillips's assets and the total debt in relation to the equity amounts to 41.59 percent. Due to the financial situation, a return on equity of 15.94 percent was realized by ConocoPhillips. Twelve trailing months earnings per share reached a value of $6.49. Last fiscal year, ConocoPhillips paid $2.70 in the form of dividends to shareholders
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.36, the P/S ratio is 1.77 and the P/B ratio is finally 1.91. The dividend yield amounts to 3.61 percent and the beta ratio has a value of 1.01....Check out #2-5 here...5 Cash-Hoarding Stocks With Top Yields And Strong Cash Flows