I have been tracking the performance of five stocks over the past month. In this article, I will analyze these five stocks on a relative value basis and analyze each stock's performance over the past month to gauge its current positioning for future growth.
ConocoPhillips (COP, Financial): When I reviewed this stock one month ago it was trading at $71.50 per share and today it's hovering around $70 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. This stock has been range bound between $65 and $75 per share since November of 2011. The company does however pay out a nice dividend of $2.64 per share (annualized) which amounts to a dividend yield of about 3.9% at the stock's current price. The company is consistent with its dividend payment and raises it significantly on occasion. The trailing twelve month price to earnings multiple on the stock is 7.86 on earnings of $8.97 per share — compared to the industry average of 12.23. This implies investors are not willing to pay a premium on the stock.
The company's two closest competitors in this industry are BP (BP) and Chevron Corporation (CVX). BP currently has a PEG ratio of 1.69 with a five year earnings growth forecast of 4% and Chevron Corporation currently has a PEG ratio of 1.08 with a five year earnings growth forecast of 7.5%. ConocoPhillips is moderately priced by comparison with a PEG ratio of 1.21 and a five year earnings growth forecast of 7.2%. Based on this information, I rate this stock a buy right now.
Dana Holding Corp (DAN, Financial): One month ago this stock was trading at $14.51 per share and today it's around $15 per share. The S&P has risen from 1280 to 1325 in the same time period, a gain of 45 points. The stock has been rising steadily since the first of the year when it was around $11 per share. The trailing twelve month price to earnings multiple on the stock is 24.74 on earnings of $.64 per share — compared to the sector average of 8.99, suggesting investors are willing to pay a premium on the stock. Dana Holding Corp is an automotive supplier that produces driveshafts, axels, thermal sealing and structural automobile parts for most vehicle manufacturers in the world.
In recent news the company is expanding their distribution network to better serve their global customers — in this case European automakers. The company's two closest competitors in this sector are American Axle & Manufacturing (AXL) and Magna International Inc. (MGA). American Axle & Manufacturing currently has a five year expected PEG ratio of .44 and American Axle & Manufacturing currently has a five year expected PEG ratio of 1.10. Dana Holding Corp is comparatively cheaper with its five year expected PEG ratio of only .14. I rate this stock a buy right now.
Donaldson Company (DCI, Financial): One month ago this stock was at $72.45 per share and today it's hovering around $76 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is presently hitting new 52 week highs daily and trending upwards from a 52 week low of $46.37 it reached in August of 2011. Over and above this capital appreciation the company also pays a dividend of $.64 (annually) which amounts to a dividend yield of about .9% at the stock's current price. The trailing twelve month price to earnings multiple on the stock is 24.76 on earnings of $3.09 per share — compared to the sector average of 15.00. This implies investors are willing to pay a premium on the stock.
In recent news, the company has raised its quarterly dividend by 7% to $.16 per share and announced a two for one stock split that will go into effect in March of 2012. The companies two closest competitors are Cummins Inc. (CMI) and Pall Corporation (PLL). Cummins currently has a PEG ratio of .44 and Pall Corporation has a PEG ratio of 1.72. Donaldson Company is slightly more expensive by comparison with a PEG ratio of 1.76. I believe this stock is headed in the right direction, and rate it a buy right now.
Goldman Sachs Group (GS, Financial): Looking back one month ago this stock was at $104.31 per share and today it's hovering around $117 per share. The S&P has risen from 1280 to 1325 in the same time period, a gain of 45 points. This stock seems to have found its current bottom at around $90 per share in this economic environment and is bouncing off that level. Although the banking crisis tarnished Goldman's reputation somewhat the banks brand name still carries some weight and as the boom of the "bust and boom cycle" progresses the public tends to forget. (politicians rely on this phenomenon) In short this may be the buying opportunity of a lifetime but the company does have some exposure in Europe which may cause some volatility in the stock.
In addition to capital appreciation the company also pays a dividend of $1.40 per share (annually) which amounts to a dividend yield of about 1.3% at the stock's current price. The company's two closest competitors are JP Morgan Chase & Co. (JPM) and Morgan Stanley (MS). JP Morgan currently has a PEG ratio of 1.19 and Morgan Stanley has a PEG ratio of .97. Goldman Sachs is still cheaper by comparison with a PEG ratio of .89. I would avoid shares of Goldman Sachs for now, and look to JP Morgan Chase and Morgan Stanley for better investment opportunities.
Meadwestvaco (MWV, Financial): When I checked this stock one month ago it was at $31.22 per share and today it's hovering around the $30 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is in a short term upward trend off the 52 week low of $22.75 it reached in October of 2011. The company also pays a dividend of $1 per share (annualized) which amounts to a dividend yield of about 3.4% at the stock's current price. Meadwestvaco has a history of paying out this dividend on a consistent basis. The trailing twelve month price to earnings multiple on the stock is 20.86 on earnings of $1.47 per share — compared to the sector average of 10.33. This suggests investors are willing to pay a premium on the stock.
The company's two closest competitors in this market are International Paper (IP) and Weyerhaeuser Company (WY). International Paper currently has a PEG ratio of 2.11 with a five year forecast earnings growth of 5% and Weyerhaeuser Company currently has a PEG ratio of 16.11 and also has a five year forecast earnings growth of 5%. Meadwestvaco is much cheaper by comparison with a PEG ratio 1.68 and a five year forecast earnings growth of 10%. I think this stock is a buy at current price levels.
ConocoPhillips (COP, Financial): When I reviewed this stock one month ago it was trading at $71.50 per share and today it's hovering around $70 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. This stock has been range bound between $65 and $75 per share since November of 2011. The company does however pay out a nice dividend of $2.64 per share (annualized) which amounts to a dividend yield of about 3.9% at the stock's current price. The company is consistent with its dividend payment and raises it significantly on occasion. The trailing twelve month price to earnings multiple on the stock is 7.86 on earnings of $8.97 per share — compared to the industry average of 12.23. This implies investors are not willing to pay a premium on the stock.
The company's two closest competitors in this industry are BP (BP) and Chevron Corporation (CVX). BP currently has a PEG ratio of 1.69 with a five year earnings growth forecast of 4% and Chevron Corporation currently has a PEG ratio of 1.08 with a five year earnings growth forecast of 7.5%. ConocoPhillips is moderately priced by comparison with a PEG ratio of 1.21 and a five year earnings growth forecast of 7.2%. Based on this information, I rate this stock a buy right now.
Dana Holding Corp (DAN, Financial): One month ago this stock was trading at $14.51 per share and today it's around $15 per share. The S&P has risen from 1280 to 1325 in the same time period, a gain of 45 points. The stock has been rising steadily since the first of the year when it was around $11 per share. The trailing twelve month price to earnings multiple on the stock is 24.74 on earnings of $.64 per share — compared to the sector average of 8.99, suggesting investors are willing to pay a premium on the stock. Dana Holding Corp is an automotive supplier that produces driveshafts, axels, thermal sealing and structural automobile parts for most vehicle manufacturers in the world.
In recent news the company is expanding their distribution network to better serve their global customers — in this case European automakers. The company's two closest competitors in this sector are American Axle & Manufacturing (AXL) and Magna International Inc. (MGA). American Axle & Manufacturing currently has a five year expected PEG ratio of .44 and American Axle & Manufacturing currently has a five year expected PEG ratio of 1.10. Dana Holding Corp is comparatively cheaper with its five year expected PEG ratio of only .14. I rate this stock a buy right now.
Donaldson Company (DCI, Financial): One month ago this stock was at $72.45 per share and today it's hovering around $76 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is presently hitting new 52 week highs daily and trending upwards from a 52 week low of $46.37 it reached in August of 2011. Over and above this capital appreciation the company also pays a dividend of $.64 (annually) which amounts to a dividend yield of about .9% at the stock's current price. The trailing twelve month price to earnings multiple on the stock is 24.76 on earnings of $3.09 per share — compared to the sector average of 15.00. This implies investors are willing to pay a premium on the stock.
In recent news, the company has raised its quarterly dividend by 7% to $.16 per share and announced a two for one stock split that will go into effect in March of 2012. The companies two closest competitors are Cummins Inc. (CMI) and Pall Corporation (PLL). Cummins currently has a PEG ratio of .44 and Pall Corporation has a PEG ratio of 1.72. Donaldson Company is slightly more expensive by comparison with a PEG ratio of 1.76. I believe this stock is headed in the right direction, and rate it a buy right now.
Goldman Sachs Group (GS, Financial): Looking back one month ago this stock was at $104.31 per share and today it's hovering around $117 per share. The S&P has risen from 1280 to 1325 in the same time period, a gain of 45 points. This stock seems to have found its current bottom at around $90 per share in this economic environment and is bouncing off that level. Although the banking crisis tarnished Goldman's reputation somewhat the banks brand name still carries some weight and as the boom of the "bust and boom cycle" progresses the public tends to forget. (politicians rely on this phenomenon) In short this may be the buying opportunity of a lifetime but the company does have some exposure in Europe which may cause some volatility in the stock.
In addition to capital appreciation the company also pays a dividend of $1.40 per share (annually) which amounts to a dividend yield of about 1.3% at the stock's current price. The company's two closest competitors are JP Morgan Chase & Co. (JPM) and Morgan Stanley (MS). JP Morgan currently has a PEG ratio of 1.19 and Morgan Stanley has a PEG ratio of .97. Goldman Sachs is still cheaper by comparison with a PEG ratio of .89. I would avoid shares of Goldman Sachs for now, and look to JP Morgan Chase and Morgan Stanley for better investment opportunities.
Meadwestvaco (MWV, Financial): When I checked this stock one month ago it was at $31.22 per share and today it's hovering around the $30 per share. In the same time period the S&P has risen from 1280 to 1325, a gain of 45 points. The stock is in a short term upward trend off the 52 week low of $22.75 it reached in October of 2011. The company also pays a dividend of $1 per share (annualized) which amounts to a dividend yield of about 3.4% at the stock's current price. Meadwestvaco has a history of paying out this dividend on a consistent basis. The trailing twelve month price to earnings multiple on the stock is 20.86 on earnings of $1.47 per share — compared to the sector average of 10.33. This suggests investors are willing to pay a premium on the stock.
The company's two closest competitors in this market are International Paper (IP) and Weyerhaeuser Company (WY). International Paper currently has a PEG ratio of 2.11 with a five year forecast earnings growth of 5% and Weyerhaeuser Company currently has a PEG ratio of 16.11 and also has a five year forecast earnings growth of 5%. Meadwestvaco is much cheaper by comparison with a PEG ratio 1.68 and a five year forecast earnings growth of 10%. I think this stock is a buy at current price levels.
