Dividend Yield | Mar 24, 2013 06:54AM ET
Some investors say that growth matters as do price ratios. They are right. If you buy a stocks with a low valuation compared to the intrinsic value, you can earn a solid return when other investors identify the gap and jump on the stock.
But cheapness could have several reasons and can be evaluated using many fundamentals. I focus on classical fundamentals like P/E, P/B and P/S.
Each month, I make a screen of America’s cheapest dividend-paying, large cap stocks with the highest expected growth for the upcoming fiscal year. The stocks from the list have a market capitalization of more than USD 10 billion and earnings per share are expected to grow at least 10 percent over the next year.
Yet despite the strong growth, these stocks still have a P/E ratio of less than 15 and a P/S and P/B ratio of less than two. Fourteen companies fulfilled the mentioned criteria of which ten have a buy or better recommendation.
PetroChina (PTR) has a market capitalization of $241.42 billion. The company employs 552,810 people, generates revenue of $353.396 billion and has a net income of $21.027 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $52.558 billion. The EBITDA margin is 14.87 percent (the operating margin is 7.95 percent and the net profit margin 5.95 percent).
Financial Analysis: The total debt represents 20.52 percent of the company’s assets and the total debt in relation to the equity amounts to 41.82 percent. Due to the financial situation, a return on equity of 11.16 percent was realized. Twelve trailing months earnings per share reached a value of $10.14. Last fiscal year, the company paid $4.56 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.00, the P/S ratio is 0.73 and the P/B ratio is finally 1.41. The dividend yield amounts to 3.80 percent and the beta ratio has a value of 1.10.
Here is the full table with some fundamentals (TTM):
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.
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