A low price-earnings ratio is just the start of screening for potential value stocks, as Peter Lynch of the Fidelity Magellan Fund explained a few times. During a period of growth stock mania like the present one, it probably makes sense from a basic contrarian stance to apply value stock selection basics and see what arises.
It’s not necessary to completely understand the complexity of his formulas to begin to get a feel for the value stock criteria. These stocks are worth researching since they have 1) lower-than-the-market p/e’s, 2) show a record of earnings, 3) pay dividends and 4) keep debt levels at low levels.
4 Low P/E Stocks With Dividends
Himax Technologies
Himax is a “fabless semiconductor solutions provider dedicated to display imaging processing technologies,” according to the company’s website. Founded in 2001 and based in Taiwan, it falls in the small cap category with a market capitalization of $969 million.
The stock trades with a price-earnings ratio of 12.61 at a time when the Shiller p/e for the S&P 500 is 36. This year’s earnings are by 46% and, over the past five years, up 42%. The debt-to-equity ratio is .54% with the long-term debt-to-equity ratio at .04%. Himax offers investors a 5.23% dividend.
Jiayin
A fintech platform based in China the company says it’s focused on connecting “underserved individual borrowers and financial institutions.” Operating from corporate headquarters in Shanghai, the company is definitely a small cap with a market cap of $211 million.
The stock is trading with a price-earnings ratio 2.60 and at 1.14 times its book value. Earnings over the past five years show growth of 14.65%. The debt-to-equity ratio is .02. Jiayin Group paid a dividend on August 27, 2024 of 11.08%. As the daily price above shows, the stock is participating in China’s rally after interest rate cuts.
Perdoceo Education
The education and training services company is based in Shaumburg, Illinois. Colorado Technical University and the American Intercontinental University System are two of Perdoceo’s academic institutions which provide degree programs from associate to doctoral levels.
With a price-earnings ratio off 10.32, the stock trades at 1.53 times book. Earnings this year are down 3.67%. The past five years shows EPS growth of 23.04%. The debt-to-equity ratio is .03. Market capitalization is $1.38 billion. Perdoceo pays a dividend of 2.19%.
Tenaris
Pipes for oil delivery is the main business and the firm provides other related services for the energy sector. Based in Luxembourg, the company operates in 23 countries globally. Market capitalization is $18.44 billion. Average daily volume for the NYSE stock is 2.11 million shares traded.
This year’s earnings are down by 48% — the EPS growth over the past five years comes to +34%. The price-earnings ratio is 6.92 and it’s trading at 1.09 its book value. The debt-to-equity ratio is .04. Tenaris pays a 3.70% dividend.
No artificial intelligence was used in the writing of this post.
Stats courtesy of FinViz.com. Charts courtesy of Stockcharts.com.
More analysis and commentary at johnnavin.substack.com.