Revenge Of The Value Investors

With surgical precision, conservative fund managers have carved out the best stocks from the body financial.

with dividends fall less than those of corporations with no distribution at all.

Value investors measure a company’s generosity by its yield, which is its dividend divided by its share price. Currently, S&P 500 stocks pay out an average yield of 1.2% annually, or 60 cents for every $50 share. Eley looks for his portfolio to offer a payout of roughly twice that figure, or 2.4% annually. In our screen, however, we set our sights slightly lower in order to find stocks outdoing the S&P 500.
Among the few stocks in our screen beating the index’s yield were specialized multinational bank Banco Latinoamericano de Exportaciones (NYSE: BLX), with a dividend yield of 3.34%, and auto giant Ford Motor Co. (NYSE: F), yielding 3.19%.

THE INTANGIBLES
While we’ve listed some of the most important value investing numbers to look at, experts say you should feel free to mull over other criteria when you screen for shares, some of which can’t be boiled down to pure numbers. For investors like you, it’s a good idea to look at annual reports and articles written about the company in the current financial press.

Using four criteria, we came up with a list of 10 value stocks. We searched for stocks with: price-to-book value of 4 or higher; P/E of 19 times projected earnings or less; return on equity of 15 or higher; and dividend yield of 1.2% or higher.*

Company

(Exchange: Ticker)

Price**

Estimated EPS

Price-to-Book Value

P/E

Return On Equity

Dividend Yield

Banco Latinoamericano (NYSE: BLX) $28.75

4.58

3.12

6.3 4 9.7 3.34%
Citigroup (NYSE: C) 43.13

4.11

3.39

15.7 21.5 1.30
CNA Surety (NYSE: SUR) 14.00

1.23

1.98

11.4 17.3 2.29
Doral Financial (Nasdaq: DORL) 16.88

1.56

2.55

10.8 23.5 1.42
Eaton (NYSE: ETN) 85.88

6.30

3.03

13.6 22.2 2.05
Elbit Systems (Nasdaq: ESLTF) 15.50

1.20

2.51

12.9 19.5 2.58
Ford Motor (NYSE: F) 57.63 5.53

2.82

10.4

27.0 3.19
General Motors (NYSE: GM) 84.88

9.52

3.76

8.9 42.1 2.36
Peoples Bancshares (Nasdaq: PBKB) 19.88

2.77

2.03

7.2 28.2 4.03
Sauer Inc. (NYSE: SHS) 10.25

1.03

1.80

10.0 18.0 2.73
*Stocks are rated a “buy” or higher, according to Zacks Investment Research
**As of May 26, 1999
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