3 Low Shiller Price-Earnings Ratio Picks
If you want to increase the likelihood of finding stocks that can beat the market over the next several years, you may want to screen for stocks with a favourable Shiller price-earnings ratio. The following stocks have a Shiller price-earnings ratio that is lower than the S&P 500 index's historical average of 16.72 (as of July 10).
Alexander's Inc
The first company that meets the above criteria is Alexander's Inc (NYSE:ALX), a Paramus, New Jersey-based real estate investment trust company holding properties in New York City.
Alexander's Inc has a Shiller price-earnings ratio of 8.77 (versus the industry median of 14.18), which results from Friday's share price of $239.33 and inflation adjusted earnings per share of $27.28 per year on average over the past 10 years.
The stock price has fallen 36.2% in the past year for a market cap of $1.22 billion and a 52-week range of $223.03 to $394.70.
GuruFocus has assigned a moderate rating of 4 out of 10 to the company's financial strength and a very good rating of 7 out of 10 to its profitability.
The stock has a hold recommendation rating on Wall Street and an average target price of $280 per share.
Daqo New Energy Corp
The second company to consider is Daqo New Energy Corp (NYSE:DQ), a Chinese manufacturer and seller of polysilicon to manufacturers of solar panels in the People's Republic of China.
Daqo New Energy Corp has a Shiller price-earnings ratio of 4.49 (versus the industry median of 29.48), which is the result of a share price of $89.62 as of July 10 and inflation adjusted earnings per share of $19.98 per year on average over the past 10 years.
The share price rose by almost 108% in the past year. The stock has a market cap of $1.25 billion and a 52-week range of $30.75 to $98.01.
GuruFocus has assigned a positive rating of 5 out of 10 to the company's financial strength and a very good rating of 7 out of 10 to its profitability.
The stock has a buy recommendation rating on Wall Street and an average target price of $91.36 per share.
Keurig Dr Pepper Inc
The third company that qualifies is Keurig Dr Pepper Inc (NYSE:KDP), a Burlington, Massachusetts-based global beverage company.
Keurig Dr Pepper Inc has a Shiller price-earnings ratio of 8.98 (versus the industry median of 20.88), which is the result of a share price of $29.20 as of July 10 and inflation adjusted earnings per share of $3.25 per year on average over the past 10 years.
The stock price has risen by almost 4% in the past year for a market cap of $4.84 billion and a 52-week range of $5.36 to $14.
GuruFocus has assigned a moderate rating of 4 out of 10 to the company's financial strength and a positive rating of 6 out of 10 to its profitability.
The stock has an overweight recommendation rating on Wall Street and an average target price of $31.25 per share.
Disclosure: I have no positions in any securities mentioned in this article.
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This article first appeared on GuruFocus.
