For Immediate Release
Chicago, IL – May 23, 2022 – Today, Zacks Investment Ideas feature highlights TotalEnergies SE TTE, Pangea Logistics Solutions PANL and Danaos Corp. DAC.
3 Low P/E Stocks Displaying Attractive Earnings Growth
The market continues to punish investors in the seemingly “no-fun allowed” environment that we have found ourselves in. Many of us already can’t wait to put this year behind us, and it’ll undoubtedly be talked about for years to come.
Coming out of a once-in-a-lifetime pandemic, we have found ourselves in a unique economic situation. The Fed has become much more hawkish, raising interest rates to curb inflation that had gotten out of control.
Low borrowing costs during the initial phases of the pandemic helped provide liquidity, a major driving force behind many of the runs we witnessed stocks go on. Now that the cheap borrowing days are over, stocks and indexes have extensively pulled back.
Nonetheless, investors have been rolling with the punches. The high-growth names have been hit the hardest throughout 2022, making many investors pivot to value stocks. Value stocks are typically much less volatile.
Three companies that are strong value plays include TotalEnergies SE, Pangea Logistics Solutions and Danaos Corp.
All three companies sport the highly coveted Zacks Rank #1 (Strong Buy), have solid dividend yields, low forward earnings multiples, strong projected earnings growth, and have a Style Score of A for Value.
For investors looking to add value plays to their portfolios, let’s take an enhanced look at all three companies to see why they are solid bets.
TotalEnergies SE is an extensive energy company that produces and markets energies on a global scale. Energy operations of the company span across oil, biofuels, natural gas, green gases, renewables, and electricity.
Year-to-date, shares have shown a valuable blend of defense and appreciation, up around 10%. The return is more than enough to handily outperform the S&P 500’s decline of 18%. In the sea of red that has been 2022, the strong share performance bodes well.
The company also sports a beautifully low forward earnings multiple of 4.8X, which is well below the Zacks Oil and Gas – Refining and Marketing Industry’s average of 6.5X. Additionally, the value is an absolute fraction of 2020 highs of 49.1X and is well below the median of 11.4X over the last five years.
In addition to attractive valuation levels, the company also rewards its shareholders extensively. The company has a 3.91% annual dividend yield with a sustainable payout ratio sitting at 24% of earnings. Furthermore, the company has increased its dividend by nine times just over the last five years.
Analysts have been upping their earnings outlook across the board over the last 60 days. For the upcoming quarter, the Consensus Estimate Trend has increased by a mighty 60% up to $2.99 per share, displaying a sizable 135% growth in earnings from the year-ago quarter. Additionally, current fiscal year earnings are expected to expand by 75% year-over-year.
Pangea Logistics Solutions
Pangea Logistics Solutions is a global provider of comprehensive maritime logistics and transportation solutions. The company not only owns a large fleet of bulk carriers, but also designs, produces, and operates port and inland projects.
Year-to-date, shares have been on an absolute tear. Up nearly 60% so far, the performance doesn’t even come close to the general market’s decline. Once again, the strength within the shares bodes well – investors have defended this stock, buying at every stop along the way.
The company’s forward earnings multiple is sitting nicely at 3.5X, well below the median of 5.4X over the last five years and nowhere near 2020 highs of 61.3X. Additionally, the value displays a sizable 80% discount relative to the S&P 500’s forward earnings multiple of 17.4X.
PANL has shown a commitment to its shareholders within its 3.43% dividend yield, with a very sustainable payout ratio sitting at 12% of earnings. Furthermore, the company has increased its dividend three times over the last five years.
Like TTE, the company has witnessed positive estimate revisions across the board over the last 60 days. The Consensus Estimate Trend for the upcoming quarter has increased by nearly 48% up to $0.37 per share, reflecting a considerable 28% expansion in the bottom line from the year-ago quarter. Looking forward, the $1.67 per share estimate for the current fiscal year displays a 19% growth in earnings.
Danaos is one of the largest independent owners of modern, large-size containerships. The company charters its containerships on long-term contracts at fixed rates.
Year-to-date, DAC shares have been substantial, providing investors with a 7% return and easily outpacing the S&P 500. DAC shares have shown a valuable blend of defense relative to most other stocks in a time of overall weakness.
DAC’s forward earnings multiple is sitting nicely at 2.6X, well below 2021 highs of 6.7X, and just slightly above its median of 1.8X over the last five years. Additionally, the value represents a very steep 85% discount relative to the S&P 500’s forward P/E ratio.
Like PANL and TTE, the company likes to reward its investors handsomely. DAC has an annual dividend yield of 3.81% and has a very sustainable payout ratio of 12% of earnings. Furthermore, the company has increased its dividend twice over the last five years.
Positive estimate revisions have hit across the board over the last 60 days. For the upcoming quarter, the $6.89 per share estimate reflects a sizable triple-digit earnings growth of 107% from the year-ago quarter. Earnings are expected to surge 85% year-over-year for the current fiscal year.
While the general market has suffered throughout 2022, these stocks have done quite the opposite, providing investors with positive returns. Additionally, growth rates are robust, shares are at attractive valuation levels, and most importantly, they all carry a Zacks Rank #1 (Strong Buy).
All three companies are tremendous value bets, further displayed by their Style Score of A for Value.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Danaos Corporation (DAC) : Free Stock Analysis Report
Pangaea Logistics Solutions Ltd. (PANL) : Free Stock Analysis Report
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
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