To increase your chances of discovering value opportunities, one method is to screen the market for stocks with lower trailing 12-month price-to-free-cash-flow ratios than that of S&P Index, which stands at around 15.72 as of the time of writing.
Therefore, investors could be interested in the following stocks, since they meet the above criteria and are recommended by sell-side analysts on Wall Street.
BP PLC
The first stock investors could be interested in is BP PLC (BP, Financial), a London-based oil and gas giant.
BP PLC’s price-to-free-cash-flow ratio was about 5.92 as of July 5, ranking better than 63.3% of 575 companies that operate in the oil and gas industry.
The free cash flow per share for the trailing 12 months ended March 31 stood at $4.59.
Following a 1.83% increase over the past year, the stock closed at $27.15 per share on Tuesday for a market capitalization of $84.50 billion and a 52-week range of $22.64 to $34.30.
Currently, BP PLC pays a quarterly dividend of 32.8 cents per common share with the last payment issued on June 24.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of approximately $37.41 per share.
Devon Energy Corp
The second stock investors could be interested in is Devon Energy Corp. (DVN, Financial), an Oklahoma City-based oil and gas producer.
Devon Energy Corp.’s price-to-free-cash-flow ratio was 8.42 as of July 5, ranking better than 53.04% of the 575 companies that operate in the oil and gas industry.
The company's free cash flow per share for the trailing 12 months ended March 31 was $6.16.
Following a 78.97% increase that occurred over the past year, the stock was trading at $51.89 per share at close on Tuesday for a market capitalization of $32.56 billion and a 52-week range of $24.05 to $79.40.
Currently, Devon Energy Corp. pays a quarterly dividend of $1.27 per common share with the last payment issued on June 30.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $80.93 per share.
Cenovus Energy Inc.
The third stock investors could be interested in is Cenovus Energy Inc. (CVE, Financial), a Canadian developer, producer and marketer of crude oil and natural gas liquids.
Cenovus Energy Inc.’s price-to-free-cash-flow ratio was about 10.63 as of July 5, ranking worse than 59.13% of 575 companies that operate in the oil and gas industry.
The company's free cash flow per share for the trailing 12 months ended March 31 was $1.66.
The stock price has increased by 82.89% over the past year to close Tuesday at $17.64 per share for a market cap of $33.48 billion and a 52-week range of $7.20 to $24.91.
Currently, Cenovus Energy Inc. pays a quarterly dividend of 0.105 Canadian dollars ($0.081) per common share with the last payment issued on June 30.
On Wall Street, the stock has a median recommendation rating of buy and an average target price of $26.03 per share.
