Energy and Financials continue to dominate the value landscape in our FREE Large Cap Screener this week.
Petrobras (PBR), Equinor (EQNR), and Shell (SHEL) highlight the energy side with strong free cash generation, while Synchrony Financial (SYF), Bank of New York Mellon (BK), and Prudential (PUK) anchor the financial names screening cheaply at the front of the list.
From Synchrony (SYF), at an Acquirer’s Multiple (AM) of 2.3 with a ~36.2% FCF yield, to Equinor (EQNR) at 2.6 AM and ~11.6% FCF yield, investors are still discounting durable earnings power. Petrobras (PBR) also shows up prominently at 4.1 AM with ~35.0% FCF yield—pricing in political and commodity volatility despite robust cash flows.
On the financial side, Bank of New York Mellon (BK) comes through at 2.5 AM with ~3.1% FCF yield, reflecting stable capital returns but muted growth assumptions. Prudential PLC (PUK) screens at 3.7 AM and ~3.8% FCF yield, a reminder that life insurers remain priced like risk is elevated even as fundamentals stay solid.
Second-Tier Strength: Energy and Diversifiers
Beyond Petrobras and Equinor, Shell (SHEL) and TotalEnergies (TTE) both screen at mid-single-digit AMs (~7.7–7.9) with free cash flow yields still comfortably in the high single to low double digits (~12.5% for Shell, ~8.4% for Total). Ecopetrol (EC) remains a standout with ~14.0% FCF yield at ~8.0 AM—again showing how the market continues to heavily discount emerging-market energy exposure.
Materials and adjacent names also reinforce the cyclical skepticism: Vale (VALE) at 6.2 AM (~4.4% FCF yield) and Rio Tinto (RIO) at 7.7 AM (~7.0% FCF yield) highlight the market’s reluctance to fully reward commodity cash flows.
CF Industries (CF) joins at 8.9 AM with ~12.2% FCF yield, a reminder that even fertilizers are trading with high return profiles. Telecoms show similar trends: Ericsson (ERIC) and Telkom Indonesia (TLK) still deliver double-digit FCF yields at modest AMs.
Why It Matters
The clustering is clear: energy continues to be priced as though its cash flows are fleeting, while financials remain compressed under credit and rate fears. That combination of robust free cash flow and low multiples is historically where patient capital tends to be rewarded—through buybacks, dividends, and upside if macro assumptions prove too harsh.
Bottom Line
This week’s screen reinforces a familiar pattern: energy leads the deep-value pack, with financials not far behind. For long-horizon investors willing to lean against consensus, this mix of cheap cash flow and market skepticism continues to offer the “patience premium” that value investing thrives on.
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