Why You Should Look At These 16 Stocks With Cheap Free Cash Flows

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Why You Should Look At These 16 Stocks With Cheap Free Cash Flows

When you put money into the market, you should be aware of the market valuation. One of the major problems in valuation is definitely to predict future cash-flows.

Nobody of us has a crystal-ball and no one can predict the future.

The second problem is that there are companies that must invest massively into the business model in order to boost growth or to replace old machines or buildings.

Investors often calculate with free cash flows. Those are the real income of the company, available for dividends, buybacks or mergers and acquisitions.

Today I like to introduce the cheapest Dividend Achievers with a low price to free cash flow of less than 15.

16 companies fulfilled my criteria of which four have a dividend yield over 3 percent. The most of the results come from the property and casualty insurance industry.

Insurer generates massive cash but they have also big problems with decreasing premiums and increasing competition. There are always good reasons why some companies are cheap.

You may also like my article about the best dividend stocks from the title insurance industry. I still prefer, like Warren Buffett, the fastest growing companies from the insurance sector. Those are ACE, UNH and TRV.

What do you think about the screen?

ACE Limited — Yield: 2.28% ACE Limited (NYSE:ACE) works within the Property & Casualty Insurance industry, a part of the Financial sector, and has a market capitalization of $37.82 billion.

The Financial company employs 20,000 people, generates revenue of $19,283.00 million and has a net income of $3,758.00 million. Sales grew in average 5.60% per year over the past 5 years.

ACE Limited’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,205.00 million. The EBITDA margin is 37.36 percent (the operating margin is 22.97% and the net profit margin 19.49%).

Financials: The total debt represents 6.37 percent of ACE Limited’s assets and the total debt in relation to the equity amounts to 20.87%. Here are some return ratios:

Return on Assets: 3.40%
Return on Equity: 11.10%
Return on Investment: 11.30%
Quick Ratio: –
Current Ratio: –

Twelve-trailing-months earnings per share reached a value of $9.65. Last fiscal year, ACE Limited paid $2.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.81, the P/S ratio is 1.94 and the P/B ratio is finally 1.27. The dividend yield amounts to 2.28%.

P/E: 11.81
Forward P/E: 11.81
PEG: 1.88
P/S: 1.94
P/B: 1.27
P/Cash: 16.84
P/Free Cashflow: 10.26

Earnings Growth: ACE Limited’s expected earnings growth for the next year amounts to 2.89% while earnings growth for the next five years is estimated at 6.28%.

EPS this year: 38.20%
EPS next year: 2.89%
EPS next 5 years: 6.28%

EPS past 5 years: 25.80%
Sales past 5 years: 5.60%

Ownership: Insiders of the company own 0.50% of the outstanding shares. The position changed -7.74% over the recent six months.

The second important group of the company is institutional. Those investors own 92.50% of the company’s shares. The value moved -0.76% over the past half year.

Also important for the stock price are short sellers of the company. The amount of short-selling transactions in relation to the total outstanding and floating shares amounted to 1.19%.

In relation the latest trading volume, the ratio was 2.95. High values show that a huge amount of shares being shorted. Investors hope for declining prices and showing a kind of sentiment of the stock. – See more stocks here: Why You Should Look At These 16 Stocks With Cheap Free Cash Flows…