Cheap stocks are the basis for future returns. Beside cheap fundamentals and pricing ratios of a company, the expected growth is an additional important item for investors. After the sell-off at the capital markets and new uncertainty due to the European debt crisies, there should be some bargains in relation to growth right now.
I screened the capital market by cheap large capitalized stocks - Stocks with a market capitalization of more than $10 billion and an expected earnings growth of at least 25 percent for the next year, but they have a price to earnings ratio of less than 15 and a price to sales and price to book ratio of less than 1. Only eight stocks fulfilled these criteria. Here are the results sorted by lowest P/E ratio:
1. American Intl. Group (AIG) has a market capitalization of $39.90 billion. The company employs 63,000 people, generates revenues of $77,301 million and has a net income of $12,077 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $31,427 million. Because of these figures, the EBITDA margin is 40.66 percent (operating margin 23.20 percent and the net profit margin finally 15.62 percent).
The total debt representing 15.58 percent of the company’s assets and the total debt in relation to the equity amounts to 124.78 percent. Due to the financial situation, the return on equity amounts to 30.11 percent. Finally, earnings per share amounts to $10.05 of which $0.00 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 188.04 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 2.09, Price/Sales 0.54 and Price/Book ratio 1.14. Dividend Yield: None. The beta ratio is 3.43.
2. Mitsui & Co. (MITSY) has a market capitalization of $27.05 billion. The company employs 40,026 people, generates revenues of $60,843.10 million and has a net income of $894.50 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,387.97 million. Because of these figures, the EBITDA margin is 7.21 percent (operating margin 4.06 percent and the net profit margin finally 1.47 percent).
The total debt representing 39.76 percent of the company’s assets and the total debt in relation to the equity amounts to 144.47 percent. Due to the financial situation, the return on equity amounts to 13.34 percent. Finally, earnings per share amounts to $49.96 of which $12.22 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 34.61 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 5.93, Price/Sales 0.45 and Price/Book ratio 0.88. Dividend Yield: 2.24 percent. The beta ratio is not calculable.
3. Barclays (BCS) has a market capitalization of $29.30 billion. The company employs 146,100 people, generates revenues of $31,633.38 million and has a net income of $7,182.44 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $18,626.35 million. Because of these figures, the EBITDA margin is 58.88 percent (operating margin 19.13 percent and the net profit margin finally 14.35 percent).
The total debt representing 54.80 percent of the company’s assets and the total debt in relation to the equity amounts to 1,604.98 percent. Due to the financial situation, the return on equity amounts to 7.26 percent. Finally, earnings per share amounts to $1.29 of which $0.35 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 36.62 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 7.43, Price/Sales 0.64 and Price/Book ratio 0.40. Dividend Yield: 3.38 percent. The beta ratio is 2.56.
4. Morgan Stanley (MS) has a market capitalization of $26.06 billion. The company employs 62,648 people, generates revenues of $38,036 million and has a net income of $5,463 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,621 million. Because of these figures, the EBITDA margin is 20.04 percent (operating margin 16.31 percent and the net profit margin finally 14.36 percent).
The total debt representing 25.58 percent of the company’s assets and the total debt in relation to the equity amounts to 361.17 percent. Due to the financial situation, the return on equity amounts to 7.97 percent. Finally, earnings per share amounts to $1.69 of which $0.20 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 34.81 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 7.99, Price/Sales 0.72 and Price/Book ratio 0.45. Dividend Yield: 1.41 percent. The beta ratio is 1.53.
5. Nippon Telegraph & Telepone (NTT) has a market capitalization of $62.77 billion. The company employs 219,343 people, generates revenues of $133,987.80 million and has a net income of $9,104.21 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $47,365.30 million. Because of these figures, the EBITDA margin is 35.35 percent (operating margin 11.79 percent and the net profit margin finally 6.79 percent).
The total debt representing 23.23 percent of the company’s assets and the total debt in relation to the equity amounts to 56.97 percent. Due to the financial situation, the return on equity amounts to 6.45 percent. Finally, earnings per share amounts to $2.44 of which $0.78 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 55.71 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 10.16, Price/Sales 0.49 and Price/Book ratio 0.63. Dividend Yield: 2.93 percent. The beta ratio is 0.34.
6. Manulife Financial (MFC) has a market capitalization of $19.14 billion. The company employs 24,000 people, generates revenues of $36,918.28 million and has a net income of $-1,486.32 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,712.28 million. Because of these figures, the EBITDA margin is 4.64 percent (operating margin -6.13 percent and the net profit margin finally -4.03 percent).
The total debt representing 5.82 percent of the company’s assets and the total debt in relation to the equity amounts to 54.12 percent. Due to the financial situation, the return on equity amounts to -6.92 percent. Finally, earnings per share amounts to $0.99 of which $0.51 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 547.80 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 10.74, Price/Sales 0.54 and Price/Book ratio 0.88. Dividend Yield: 4.64 percent. The beta ratio is 2.07.
7. Gerdau (GGB) has a market capitalization of $13.05 billion. The company employs 41,290 people, generates revenues of $17,581.32 million and has a net income of $1,376.22 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,046.14 million. Because of these figures, the EBITDA margin is 17.33 percent (operating margin 11.61 percent and the net profit margin finally 7.83 percent).
The total debt representing 34.20 percent of the company’s assets and the total debt in relation to the equity amounts to 75.34 percent. Due to the financial situation, the return on equity amounts to 11.28 percent. Finally, earnings per share amounts to $0.67 of which $0.25 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 44.90 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 11.48, Price/Sales 0.75 and Price/Book ratio 1.11. Dividend Yield: 2.46 percent. The beta ratio is 1.95.
8. The Travelers Companies (TRV) has a market capitalization of $22.26 billion. The company employs 32,000 people, generates revenues of $25,112 million and has a net income of $3,216 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,496 million. Because of these figures, the EBITDA margin is 33.83 percent (operating margin 17.15 percent and the net profit margin finally 12.81 percent).
The total debt representing 6.29 percent of the company’s assets and the total debt in relation to the equity amounts to 25.95 percent. Due to the financial situation, the return on equity amounts to 12.09 percent. Finally, earnings per share amounts to $3.78 of which $1.41 were paid in form of dividends to shareholders last fiscal. Earnings per share is expected to grow by 68.31 percent for the next year.
Here are the price ratios of the company: The P/E ratio is 14.25, Price/Sales 0.92 and Price/Book ratio 0.96. Dividend Yield: 2.92 percent. The beta ratio is 0.70.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.