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A Trio of Large Cap Stocks With Low Price-Sales Ratios

Investors may want to have a look at the following stocks, as they have low price-sales ratios, high profitability and good financial strength.

Fomento Economico Mexicano SAB de CV

The first company to have a look at is Fomento Economico Mexicano SAB de CV (NYSE:FMX), a Mexican bottler of Coca-Cola trademark beverages.

The stock traded at a price of $67.74 per share at close on Friday, May 8 for a price-sales ratio of 1.83. The industry median for the price-sales ratio is 1.63.


Fomento has a GuruFocus profitability rating of 8 out of 10, with a return on equity of 10.75% (versus the industry median of 7.37%), a return on total assets of 4.18% (versus the industry median of 3.46%) and a three-year Ebitda Growth rate of 84.5% (versus the industry median of 6.55%).

The company has received a positive GuruFocus rating of 5 out of 10 for its financial strength. The Piotroski F-Score of 4 indicates that the financial situation of Fomento is stable.

After a 30.7% decline over the past year, the stock now has a market cap of $121.19 billion and a 52-week range of $55.40 to $100.35.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of 1,968 Mexican pesos ($83.10) per share.

HP Inc

The second company to have a look at is HP Inc (NYSE:HPQ), a Palo Alto, California-based computer hardware company.

The stock price traded at $15.66 per share at close on May 8 for a price-sales ratio of 0.4 versus the industry median of 0.99.

HP Inc has a GuruFocus profitability rating of 7 out of 10, a return on total assets of 9.34% (versus the industry median of 2.45%) and a return on capital of 98.82% (versus the industry median of 9.67%).

The company has received a positive GuruFocus rating of 5 out of 10 for its financial strength. The debt-to-equity ratio is -3.69 (versus the industry median of 0.3) and the Piotroski F-score of 6 out of 10, which indicates that the company's financial situation is stable.

After a 14.3% decline over the past year, the stock now has a market cap of $22.4 billion and a 52-week range of $12.54 to $23.93.

Wall Street sell-side analysts recommend a hold rating for this stock and have established an average target price of $19.17 per share.

Sodexo

The third company to have a look at is Sodexo (SDXAY), a French provider of a variety of business services.

The stock traded at $14.45 per share at close on May 8 for a price-sales ratio of 0.43 versus the industry median of 0.83.

Sodexo has a GuruFocus profitability rating of 8 out of 10. The company has a return on equity ratio of 16.23% (versus the industry median of 7.75%) and a return on capital of 98.04% (versus the industry median of 14.72%).

Sodexo has received a positive GuruFocus score of 5 out of 10 for its financial strength. The Piotroski F-Score of 6 out of 10 which indicates that Sodexo is a financially stable company.

Following a 35.2% fall over the past year, the stock now has a market capitalization of $10.55 billion and a 52-week range of $10.15 to $23.91.

Wall Street sell-side analysts recommend an overweight rating for this stock and have established an average target price of $16.39 per share.

Disclosure: I have no positions in any securities mentioned in this article.

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This article first appeared on GuruFocus.