8 Large Companies Valued Under 10 Times Earnings
Though it was briefly considered a bank holding company due to the recession and bailouts, MetLife Inc. (NYSE: MET) is now just considered an insurance, asset management, annuities and benefits company again. It sports a whopping $62 billion market cap, and shares are marginally lower after the prior week’s earnings report beat expectations. MetLife trades at just over nine times trailing and expected 2015 earnings, but is valued at less than nine times expected 2016 earnings. One problem is that revenue peaked in 2014 and is expected to dip in 2015 and only recover to 2014 levels in 2016. Also acting against the company is the new proposed fiduciary role, potentially creating a conflict of interest in many companies like this. MetLife pays its investors roughly a 2.7% dividend yield, and UBS recently added it to a focus list.
Shares of MetLife were recently at $55.88, it has a consensus price target of $60.73, and its 52-week range is $46.10 to $58.23. MetLife’s short interest was last seen at 16.1 million shares, less than three days to cover.
Formerly known as Sallie Mae, Navient Corp. (NASDAQ: NAVI) provides financial products and services around student and education loans and business services to some 12 million customers. It has a market cap of almost $6 billion and a dividend yield approaching 4%. Navient’s problem is that it has had sliding revenue and is expected to continue to do so. This explains its valuation being about eight times trailing and expected 2015 earnings. The other risk is that the business of loaning to students comes with much more regulation and scrutiny than in prior years.
Navient shares were at $15.65, with a 52-week trading range of $15.49 to $22.71. The consensus price target is $20.11. Navient’s most recent short interest was 10.1 million shares, with about 3.4 days to cover. That was its highest short interest reading in a year.
Trinity Industries Inc. (NYSE: TRN) is a true value stock that comes with a growth-value dilemma for investors. It serves the railroad with about 76,000 rail cars to serve the energy, chemicals and construction sector, and it also makes key equipment and infrastructure items for the rail and highway systems. Trinity is also involved in energy equipment and has barge operations. After shares were cut in half before a brief recovery, its market cap is now only about $4.5 billion. Trinity faces declining revenues after a big jump in 2014, and its target industries keep the investing public only willing to value it about seven times trailing and expected earnings.
Shares of Trinity Industries were recently trading at $28.30. The stock has a consensus price target of $37.00 and a 52-week range of $24.13 to $50.77. Trinity’s most recent short interest was 17.3 million shares, or about eight days to cover, down from a short interest of nearly 30 million shares a year ago.