If you are looking for bargain opportunities among U.S.-listed equities, then you may want to consider the following three stocks, as they meet the criteria listed below:
- A price-earnings ratio of less than 20.
- A smaller enterprise-value-to-Ebitda ratio compared to the historical mean of the S&P 500 over the past seven years (which is 10.54 currently).
- A solid dividend growth surpassing the S&P 500, which saw its dividends per share grow at a compound annual rate of about 2.8% over the past three years through March 31.
United Microelectronics Corp
The first stock that makes the cut is United Microelectronics Corp (UMC, Financial), a Taiwanese semiconductor wafer foundry operator with sales primarily in the U.S., Europe, Taiwan and other Asian countries.
The stock closed at $8.17 per share on Monday for a market cap of $20.13 billion, a price-earnings ratio of 18.39 (versus the industry median of 27.64) and an enterprise value-to-Ebitda ratio of 5.96 (versus the industry median of 16.41).
GuruFocus assigned a score of 7 out of 10 to both the company's financial strength rating and its profitability rating.
United Microelectronics Corp currently pays annual dividends to its shareholders and has increased them by 17.2% every year over the past three years. The last payment of 13.6 cents per common share (up 44.7% from the previous distribution) was made on Aug. 12, 2020, for a trailing 12-month and forward dividend yield of 1.67% as of May 17.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $11.96 per share.
Quest Diagnostics Inc
The second stock that qualifies is Quest Diagnostics Inc (DGX, Financial), a Secaucus, New Jersey-based diagnostics and research services provider.
The stock closed at $132.01 per share on Monday for a market cap of $16.05 billion, a price-earnings ratio of 10.02 (versus the industry median of 30.89) and an enterprise value-to-Ebitda ratio of 6.66 (versus the industry median of 21.10).
GuruFocus assigned a score of 6 out of 10 to the company's financial strength and 8 out of 10 to its profitability.
Currently, Quest Diagnostics Inc pays a quarterly cash dividend of 62 cents per common share and has increased it by an annual average growth rate of 17.9% over the past three years. The most recent payment was issued on April 21 (up 10.71% from the prior distribution) for a trailing 12-month dividend yield of 1.74%, and a forward dividend yield of 1.88%, as of May 17.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $144.25 per share.
Whirlpool Corp
The third stock that makes the cut is Whirlpool Corp (WHR, Financial), a Benton Harbor, Michigan-based home appliances global producer and marketer.
The stock closed at $245.52 per share on Monday for a market cap of $15.38 billion, a price-earnings ratio of 11.47 (versus the industry median of 21.32) and an enterprise value-to-Ebitda ratio of 7.68 (versus the industry median of 12.72).
GuruFocus assigned a score of 5 out of 10 to the company's financial strength and 7 out of 10 to its profitability.
Currently, Whirlpool Corp pays dividends to its shareholders every quarter and it has increased them by 4.1% on average every year over the past three years. The last distribution, $1.25 per common share, was made on March 15, while the next one, $1.40 per common share, is scheduled for payment on June 15. Based on these data and Monday's closing price, the stock grants a trailing 12-month dividend yield of 2% and a forward dividend yield of 2.28%.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $263.60 per share.
Disclosure: I have no positions in any securities mentioned.
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