PE ratios point to value in these stocks by the PE Tracker Team
The big market downturn in March has sent price earnings ratios down along with prices for stocks, indicating that good values for investors may be readily available on the market. The stock market peaked around Valentine’s Day with the S&P 500 at 3,400. The index has since entered a “bear” market going as low as 2,300 before rebounding partially to 2,900. Our PE Ratio Stock Tracker App shows that real economy stocks have median PE ratios at around 22x today. Here are six stocks that have PE ratios lower than 22x.
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Six Low PE Ratio Stocks
CBRE Group Inc (NYSE:CBRE) (PE: 10x)
CBRE is a major international provider of real estate services and related investments. The stock price took a big hit during the real estate crisis in 2008, but it’s has been climbing back since then. The company has shown consistent earnings growth in recent years. Revenues were up 12% from 2018 to 2019.
Analysts were predicting more growth for the coming years, but the impact from the recent coronavirus scare is not yet clear. Another financial crisis would be a serious headwind to revenues (CBRE would see far less transaction activity), but the PE ratio suggests a tantalizing purchase if coronavirus does not cause prolonged pain to the US real estate market.
Apple Inc. (NASDAQ:AAPL) (PE: 24x)
Apple went public in 1980. It took off with the iPod in 2001 and really made its mark with the first iPhone in 2007. The price has fallen with the recent market disruptions. It’s still down from its recent peak of $325 to $300 now.
With Apple stock making investors happy for over a decade, this might be a compelling price for them to make new investments. The PE ratio is actually right now somewhat above the median for real economy stocks, but that’s low for a tech company that is still generally in expansion mode, and especially low for a tech company with such brand recognition.
Delta Air Lines, Inc. (NYSE:DAL) (PE: 4x)
Invest at your own risk.
Delta Airlines was showing healthy profitability since 2016 until the quarter ended in March. 2016 was the same year that famed value investor Warren Buffett, who once famously eschewed all airline stocks, started to pick up Delta shares himself. Before the coronavirus, people were more confident about their economic situation and travelling more in a growing economy. However, the coronavirus changed all that. Delta swung to a loss in the first quarter, and the second quarter will likely be worse. Warren Buffet sold all his airline shares in April.
For these reasons, the PE ratio is so low at 4x (a trailing figure based based on 2019 earnings).
To support employment in the industry, the US Treasury department allotted billions of dollars to airlines, including about $5 billion for Delta.
Oracle Corporation (NYSE:ORCL) (PE: 16x)
Oracle is a tech stock that has a very low PE ratio. Stock price performance has been consistent since the 2001 recession. Oracle is benefitting from the transition to cloud computing and is likely a fairly safe buy for the long term.
Robert Half International Inc. (NYSE:RHI) (12x)
Robert Half provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. An economic downturn will reduce hiring and thus demand for Robert Half’s staffing services. But if you have a long-term horizon you may want to take a second look.
Home Depot Inc (NYSE:HD) (22x)
Home Depot is often used as a case study for great financial management of a company. It was showing consistent strong earnings performance.
But after the recent market crash, the stock was down big. It is back with a vengeance though; It is up 50% in price from its low in March, and 10% since we highlighted the stock on our Instagram page on April 20th.
The Price Earnings Ratio Stock Value Tracker gives real-time PE ratios for 18 of the most important publicly traded stocks in the United States including Apple and Home Depot, with an easy-to-use dashboard that shows you were the value is. Click here to check it out.