Industry Overview
Several sectors are showing up repeatedly in this week’s screen, indicating clusters of value opportunities:
- Integrated Oil and Gas Exploration and Production leads with 6 stocks, suggesting that energy stocks—particularly diversified oil producers—are broadly undervalued based on operating earnings.
- Computer Hardware and Storage and Wireless and Wireline Telecommunications Services each have 3 stocks, indicating potential value pockets in both tech hardware and telecom.
- Several industries have 2 stocks featured, including:
- Specialty Finance
- Healthcare Support Services
- Energy Utilities
- Biopharma (Other, Non-System-Specific, System-Specific)
- Metal Ore Mining
- Patient Care
The dominance of energy, healthcare, and tech-oriented hardware suggests that value investors may currently find the best deals in cyclical and defensive sectors.
Now let’s dive into this week’s top 5 stocks by the lowest Acquirer’s Multiple®. Here’s an analysis of the top 5 large-cap stocks from the screener with the lowest Acquirer’s Multiple (AM), focusing on those with the best value characteristics (remember, a lower AM is better—a 1 is more attractive than a 10):
1. Synchrony Financial (SYF)
Acquirer’s Multiple: 1.8
Price: $61.36
Industry: Specialty Finance
Free Cash Flow Yield: 41.97%
5Y Average ROA: 9%
Dividend Yield: 2.03%
Enterprise Value: $19.95B
Operating Income: $10.99B
Synchrony Financial tops the list with an exceptionally low Acquirer’s Multiple and massive FCF yield—signaling it may be significantly undervalued relative to operating earnings. The company also generates a healthy return on assets and pays a modest dividend.
2. Equinor ASA (EQNR)
Acquirer’s Multiple: 2.3
Price: $23.63
Industry: Integrated Oil & Gas
Free Cash Flow Yield: 11.50%
5Y Average ROA: 22%
Dividend Yield: 12.16%
Enterprise Value: $69.42B
Operating Income: $30.42B
Equinor offers a compelling mix of low valuation, strong ROA, and an eye-catching dividend yield. This Norwegian energy firm may appeal to income investors and deep value hunters alike.
3. Petrobras (PBR)
Acquirer’s Multiple: 3.4
Price: $12.19
Industry: Integrated Oil & Gas
Free Cash Flow Yield: 47.57%
5Y Average ROA: 16%
Dividend Yield: 41.60%
Enterprise Value: $98.51B
Operating Income: $28.89B
Petrobras stands out with an extraordinary FCF and dividend yield. While geopolitical and operational risks may be higher in Brazil, value-focused investors could find the reward worth the risk.
4. Stellantis NV (STLA)
Acquirer’s Multiple: 5.5
Price: $10.96
Industry: Consumer Vehicles & Parts
Free Cash Flow Yield: -24.18%
5Y Average ROA: 3%
Dividend Yield: 15.95%
Enterprise Value: $32.05B
Operating Income: $5.87B
Despite a solid operating income and high dividend, Stellantis’s negative FCF yield suggests some recent headwinds. Still, its AM and dividend may attract contrarian value investors.
5. Bank of New York Mellon (BK)
Acquirer’s Multiple: 5.5
Price: $87.93
Industry: Investment Services
Free Cash Flow Yield: 3.64%
5Y Average ROA: 1%
Dividend Yield: 2.48%
Enterprise Value: $31.74B
Operating Income: $5.78B
BK appears to be trading reasonably based on enterprise value vs. income, but its low ROA and modest FCF yield suggest a more defensive value profile.
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