3 Stocks for Growth-Oriented Investors
Growth-oriented investors may want to consider the following stocks, since they represent businesses with price-earnings ratios below 20 that recorded significant improvements in their trailing 12-month net earnings per share over the past year and are recommended by Wall Street analysts.
AT&T Inc.
The first company that qualifies is AT&T Inc. (NYSE:T), a Dallas-based telecommunications service provider. The wireless business accounts for about two-thirds of AT&T's revenue, and this segment accounts for 68 million post-paid and 17 million prepaid phone customers. Fixed-line business services account for about 20% of total revenue, including Internet access, as well as home and wholesale networks and other services. Fixed-line residential services instead account for 10% of total revenue and consist mostly of broadband internet access services. The remaining 2% of total revenue comes from Mexico, where AT&T serves 21 million customers.
Trailing 12-month net income from continuing operations for the quarter ended June 30 was $2.24 per diluted share, up 10-fold from 22 cents in the prior-year quarter.
The price-earnings ratio was 5.64 (versus the industry median of 14.39) as of Friday.
Following a 25.43% decrease over the past year, the stock traded at $15.34 per share at close on Friday for a market capitalization of $109.31 billion and a 52-week range of $15.34 to $21.53.
On Aug. 1, AT&T Inc. paid a quarterly cash dividend of 27.8 cents per common share (a decline of 46.54% year over year), resulting in a trailing 12-month dividend yield of 10.4% and a forward dividend yield of 7.24% as of closing on Friday.
GuruFocus gave AT&T Inc. a 4 out of 10 rating for its financial strength and a 7 out of 10 rating for its profitability.
On Wall Street, AT&T Inc shares have a median recommendation rating of hold and an average price target of $21.07 per share.
CSX Corp
The second company that makes the cut is CSX Corp. (NASDAQ:CSX), a Jacksonville, Florida-based provider of rail transit services across a 21,000-mile rail network serving 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec with nearly $12.5 billion in annual revenue in 2021. Total revenues come from shipments of coal (13% of the total), chemicals (22%), intermodal containers (16%), car freight (9%) and the rest from a diverse mix of other bulk and industrial goods. The company also owns and leases approximately 3,500 locomotives.
Trailing 12-month net income from continuing operations for the quarter ended June 30 was $1.79 per diluted share, an increase of nearly 22% from $1.47 for the same period ended June 30, 2021.
The price-earnings ratio was 14.97 (versus the industry median of 11.46) as of Friday.
After a 12.68% decrease that occurred over the past year, the stock was trading around $26.64 per share on Friday for a market capitalization of $57.04 billion and a 52-week range of $26.61 to $38.63.
On Sept. 15, CSX Corp. paid a quarterly cash dividend of 10 cents per common share, which is a 7.53% hike year over year, resulting in a trailing 12-month dividend of 1.48% and forward dividend yield of 1.5% as of closing on Friday.
GuruFocus gave CSX Corp. a 5 out of 10 rating for its financial strength and a 9 out of 10 rating for its profitability.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $34.76 per share.
Yamana Gold Inc.
The third company that makes the cut is Yamana Gold Inc. (NYSE:AUY), a Canadian precious metals explorer, developer and producer with mineral properties in Canada and South America. In 2021, the company produced 1.011 million gold equivalent ounces. Its mines produce not only gold (90% of total production) but also silver (10% of total production). Production implies a cost of sales of approximately $690 per gold equivalent ounce and all-in-sustaining costs of approximately $1,030 per gold equivalent ounce. At the end of 2021, total Proven and Probable Mineral Reserves were 13.7 million gold equivalent ounces at a grade of 0.56 grams per tonne of mineral (g/t) and approximately 111.26 million ounces of silver at a grade of 5.5 g/t. The company operates five gold mines and has interests in various other metals projects including exploration activities throughout Canada, Brazil, Chile and Argentina.
Trailing 12-month net income from continuing operations for the quarter ended June 30 was 28 cents per diluted share, an increase of nearly 65% from 17 cents for the same period ended June 30, 2021.
The price-earnings ratio is 18.12 (versus the industry median of 10.17) as of Friday.
Following a 14.39% increase over the past year, the stock was trading around $4.53 per share at close on Friday for a market capitalization of $4.39 billion and a 52-week range of $3.70 to $6.40.
On Oct. 14, Yamana Gold Inc. will pay a quarterly cash dividend of 3 cents per common share, which is flat year over year and results in a trailing 12-month dividend yield of 2.65% and a forward dividend yield of 2.65% as of closing on Friday.
GuruFocus assigned a score of 6 out of 10 to Yamana Gold Inc.'s financial strength and 6 out of 10 to its profitability.
On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $6.59 per share.
This article first appeared on GuruFocus.
