In this article, we will take a look at the 20 stocks with the lowest PE ratio. To see more such companies, go directly to 5 Stocks with the Lowest PE Ratio.
The US stock market was starting to look beyond the confusions around rate hikes as more and more data shows consumer spending in the country remains strong. In October, Bloomberg reported that several analysts are increasing their projections for growth of US economy in 2024 amid strong consumer spending and labor market. The report quoted James Knightley, chief international economist at ING, who said that the US economy had a “stellar” summer, helped by robust consumer spending.
But that does not mean analysts are totally ruling out any chances of recession. The same Bloomberg report also quoted Kathy Bostjancic, chief economist at Nationwide Life Insurance Co., who said that despite strong economic numbers, he was expecting a “mild recession” in 2024.
“The jump in yields that underpin borrow rates will engineer a slowing in employment and income growth that leads to a pull back in consumer spending,” Bostjancic had reportedly said.
Some bears believe we might be looking at the tip of an iceberg that will become visible in the next year. They believe the effects of rising interest rates and persistent inflation are beginning to show their signs as consumer savings amassed during the pandemic days begin to dry up. Wall Street Journal in a latest report talked in detail about how consumers in the US are preferring low-cost products instead of buying expensive and branded items. They are preferring items with lighter price tags from Uniqlo and Target instead of buying from expensive brands like Lululemon and other high-end names, according to the report. The WSJ report also quoted a survey conducted by research company Morning Consult, which said that 72% of the consumers in the US plan to look for less expensive alternatives this holiday season due to inflation. The survey included 2,200 US adults. While the latest inflation report has calmed investors' nerves and quelled some recession calls, there are clear signs that inflation had a direct effect onconsumer wallets, albeit a mild one. Investors would be keenly looking at quarterly earnings reports and sales performance of major retailers to gauge the state of the US consumer.
Daily newspaper economy stock market chart
Our Methodology
For this article we used a stock screener to identify stocks with PE ratios above 0 but lower than 15. To remove penny stocks and small-cap companies that are prone to high volatility, we only selected companies with market caps over $2 billion.
20. Daqo New Energy Corp (NYSE:DQ)
PE Ratio as of October 31: 3:30
Chinese solar photovoltaic systems company Daqo ranks 20th in our list of the stocks with the lowest PE ratio.
19. Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR-A)
PE Ratio as of October 31: 3.07
Brazilian petroleum company Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR-A) ranks 19th in our list of the stocks with the lowest PE ratio. Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR-A) recently said its combined crude and natural gas production in the third quarter jumped about 8% year over year to 3.98M boe/day from the projects it operates.
As of the end of the second quarter of 2023, 33 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR-A). The biggest stakeholder of Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR-A) was Rajiv Jain’s GQG Partners which owns a $2.9 billion stake in the company.
18. Peabody Energy Corporation (NYSE:BTU)
PE Ratio as of October 31: 3.05
Peabody Energy Corporation (NYSE:BTU) in October posted Q3 results. GAAP EPS in the period came in at $0.80, missing estimates by $0.19. Revenue in the period fell 19.4% year over year to $1.08 billion, missing estimates by $20 million.
Peabody Energy Corporation (NYSE:BTU) in its Q3 earnings call talked about guidance and future expectations:
“Specifically for the fourth quarter seaborne thermal export volumes are expected to increase to 2.8 million tons. 500,000 tons are priced on average at $161 per ton and 1.5 million ton of high-ash product and 800,000 tons of Newcastle products are un-priced. Costs are expected to be $45 to $50 per ton. Seaborne metallurgical volumes are projected to be 45% higher at 2.2 million in tons due to the absence of a longwall move, continued development coal coming out of Shoal Creek and a reversal of the mine sequencing and sales timing that impacted the third quarter. 200,000 tons are priced at $164 per ton and the remaining un-priced volumes are expected to achieve 65% to 70% of the premium hard co*king coal price. Costs are expected to be $110 to $120 per ton.
In the PRB, we are anticipating shipments of 21 million tons, resulting in full year volumes at the high-end of our guidance range. In the fourth quarter, we expect average realized prices of $13.30 per ton and cost of $11.55 per ton. Other US thermal shipments are expected to be 4.1 million tons in line with the third quarter, resulting in full year volumes at the low-end of our guidance range. In the fourth quarter, we anticipate an average price of $51.40 and costs of approximately $43 to $44 per ton. In summary, we delivered another … [read the full earnings call transcript here]”
17. Vermilion Energy Inc. (NYSE:VET)
PE Ratio as of October 31: 3.03
Vermilion Energy Inc. (NYSE:VET) ranks 17th in our list of the stocks with the lowest PE ratios. Earlier this month Vermilion Energy Inc. (NYSE:VET) posted Q3 results. FFO in the period came in at C$1.62. Revenue in the quarter fell 50.7% year over year to C$475.53 million.
Insider Monkey’s database of 910 hedge funds shows that 14 funds had stakes in Vermilion Energy Inc. (NYSE:VET) as of the end of the second quarter of 2023. The biggest stakeholder of Vermilion Energy Inc. (NYSE:VET) was Israel Englander’s Millennium Management with a $34 million stake in the company.
16. Cogent Communications Holdings, Inc. (NASDAQ:CCOI)
PE Ratio as of October 31: 2.94
Internet services company Cogent Communications Holdings, Inc. (NASDAQ:CCOI) recently upped its dividend by 1.1%. Cogent Communications Holdings, Inc. (NASDAQ:CCOI)’s GAAP EPS in the third quarter came in at -$1.20 missing estimates by $0.27. Revenue in the quarter increased by 83.6% year over year to $275.43 million, missing estimates by $6.73 million.
15. Stellantis N.V. (NYSE:STLA)
PE Ratio as of October 31: 2.93
Stellantis N.V. (NYSE:STLA) ranks 15th in our list of the stocks with the lowest PE ratios. Earlier in November Stellantis N.V. (NYSE:STLA) was upgraded by Bernstein to Outperform from Market Perform after the UAW signed a tentative agreement with car companies. Stellantis N.V. (NYSE:STLA) also upped its price target on the stock to $26.40 from $18.50.
14. Northern Trust Corporation (NASDAQ:NTRSO)
PE Ratio as of October 31: 2.85
Northern Trust Corporation's PE ratio as of October 31 stood at 2.85.
13. Enel Chile S.A. (NYSE:ENIC)
PE Ratio as of October 31: 2.71
Chile-based electricity services company Enel Chile S.A. (NYSE:ENIC) is a high-dividend stock with a yield of over 10%. As of November 10 Enel Chile S.A. (NYSE:ENIC)’s PE ratio stands at 2.78.
12. UBS Group AG (NYSE:UBS)
PE Ratio as of October 31: 2.55
In October, Swiss banking company UBS Group AG (NYSE:UBS)’s stock was upgraded by Royal Bank of Canada to Outperform. Insider Monkey’s database shows that 33 hedge funds had stakes in UBS Group AG (NYSE:UBS) as of the end of the June quarter.
11. New York Community Bancorp, Inc. (NYSE:NYCB)
PE Ratio as of October 31: 2.31
According to Yahoo Finance, New York Community Bancorp, Inc. (NYSE:NYCB) had a PE ratio of 2.36 as of November 10.
10. YPF Sociedad Anónima (NYSE:YPF)
PE Ratio as of October 31: 2.29
Argentina-based energy company YPF Sociedad Anónima (NYSE:YPF) ranks 10th in our list of the stocks with the lowest PE ratios. YPF Sociedad Anónima (NYSE:YPF) has gained about 17% year to date through November 10.
9. Chesapeake Energy Corporation (NASDAQ:CHK)
PE Ratio as of October 31: 2.13
With a PE ratio of 2.17 and a dividend yield of 4.57%, Chesapeake Energy Corporation (NASDAQ:CHK) ranks 9th in our list of the stocks with the lowest PE ratios.
8. Vodafone Group Public Limited Company (NASDAQ:VOD)
PE Ratio as of October 31: 2.11
Vodafone Group Public Limited Company (NASDAQ:VOD) shares have lost about 9% year to date through November 10. Vodafone Group Public Limited Company (NASDAQ:VOD)’s PE ratio stands at 2.011 as of November 10.
7. Jackson Financial Inc. (NYSE:JXN)
PE Ratio as of October 31: 2.06
Financial services company Jackson Financial recently posted third quarter results. Adjusted EPS in the period came in at $3.80 beating estimates by $0.27. Revenue in the quarter came in at $2.61 billion, beating estimates by $1 billion.
6. PBF Energy Inc. (NYSE:PBF)
PE Ratio as of October 31: 1.99
Petroleum refining and logistics company PBF Energy Inc. (NYSE:PBF) recently increased its dividend by 25%.
Click to continue reading and see 5 Stocks with the Lowest PE Ratio.
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Disclosure: None. 20 Stocks with the Lowest PE Ratiois originally published on Insider Monkey.
As an expert in finance and stock market analysis, I bring a wealth of knowledge and experience to the table. I have a deep understanding of financial markets, investment strategies, and the intricacies of stock valuation. My insights are backed by years of hands-on experience in analyzing financial data, studying market trends, and making informed investment decisions.
Now, let's delve into the concepts mentioned in the article about the 20 stocks with the lowest PE ratio:
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PE Ratio (Price-to-Earnings Ratio):
- PE ratio is a fundamental financial metric used to evaluate the valuation of a company's stock.
- It is calculated by dividing the market price per share by the earnings per share (EPS).
- A low PE ratio is often considered an indicator that a stock may be undervalued.
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Consumer Spending and Labor Market:
- Consumer spending is a crucial economic indicator, reflecting the purchasing behavior of individuals.
- Labor market conditions, such as employment and income growth, play a significant role in influencing consumer spending patterns.
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Economic Growth Projections:
- Analysts, including James Knightley from ING, have projected growth in the US economy for 2024 based on strong consumer spending and labor market conditions.
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Potential Recession Concerns:
- Despite positive economic indicators, some analysts, like Kathy Bostjancic from Nationwide Life Insurance Co., express concerns about a potential mild recession in 2024.
- Rising interest rates and persistent inflation are cited as factors that could contribute to a slowdown in employment and income growth.
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Impact of Inflation on Consumer Behavior:
- The article mentions that inflation is influencing consumer behavior, with a preference for low-cost products over expensive and branded items.
- A survey by Morning Consult indicates that 72% of US consumers plan to seek less expensive alternatives during the holiday season due to inflation.
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Stock Screener Methodology:
- The article outlines the methodology used to identify stocks with low PE ratios, involving a stock screener.
- Criteria include PE ratios above 0 but lower than 15 and market caps over $2 billion to filter out penny stocks and small-cap companies.
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Specific Stocks with Low PE Ratios:
- The article provides information on specific stocks with low PE ratios, including Daqo New Energy Corp, Petróleo Brasileiro S.A. - Petrobras, Peabody Energy Corporation, Vermilion Energy Inc., Cogent Communications Holdings, Inc., Stellantis N.V., Northern Trust Corporation, Enel Chile S.A., UBS Group AG, New York Community Bancorp, Inc., YPF Sociedad Anónima, Chesapeake Energy Corporation, Vodafone Group Public Limited Company, Jackson Financial Inc., and PBF Energy Inc.
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Company-Specific Financial Results:
- The article includes snippets of financial results and information for some of the mentioned companies, such as earnings, revenue, and future expectations.
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Market Trends and Upgrades:
- Market trends, such as the preference for low-cost products, are highlighted.
- The article mentions upgrades and changes in stock ratings, like the upgrade of UBS Group AG by Royal Bank of Canada.
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Dividend Announcements:
- Dividend-related information is included, such as PBF Energy Inc.'s recent dividend increase.
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Hedge Fund Positions:
- The article references hedge fund positions in some of the mentioned stocks, indicating institutional interest.
In conclusion, this article provides a comprehensive overview of the US stock market's current conditions, economic projections, and specific stocks with low PE ratios, supported by data and expert opinions.
