A List of Cheap, Big-Cap Stocks

There are a lot of cheap stocks out there, but I wanted to find a list of some of the cheapest that were large enough for just about any investor to consider buying. All of the stocks on the list below have Market Capitalizations of more than $6 billion (I screened for $5 billion but all were more than $6 billion).

To make sure they had solid balance sheets, I required that debt be no more than 50% of total capital, and to make sure that earnings were not in the process of totally falling apart, I also removed any stock with a Zacks rank of #4 or #5 (Sell or Strong Sell). Most of the companies on the list are based overseas, but most have substantial U.S. operations.

It is not exactly a list that constitutes a closet index, as it has many Health Care and Energy firms and a few Financials but only one tech company and one Basic Materials name. Two of the firms, BP (BP) and Transocean (RIG), have very large contingent liabilities from the Deepwater Horizon oil spill, and several of the health care names are drug companies with lots of drugs that will be coming off patent in a few years. Thus they might be cheap for a reason, but they are cheap.

Not only on earnings for this year and next, but 7 of the 18 firms on the list are selling below book value, and eight have dividend yields of more than 2%. If you are a patient value-investor type, this list might be a good place to start looking more closely.

Company Ticker P/E using Curr FY Est P/E using Next FY Est Div Yield Price/ Book
Pfizer Inc PFE 7.07 6.81 4.72% 1.37
Bp Plc BP 6.61 5.83 0.00% 1.14
Sanofi-Aventis SNY 6.72 6.68 3.72% 1.16
Astrazeneca Plc AZN 7.89 7.92 4.61% 3.47
China Petro&Chm SNP 7.57 6.61 2.90% 1.19
Anglo Amer -Plc AAUKY 5.58 4.13 0.00% 1.98
Lukoil Hldg-Adr LUKOY 5.07 4.3 2.68% 0.81
Ing Groep-Adr ING 6.85 5.2 0.00% 0.33
Gazprom Neft GZPFY 6.21 4.38 2.30% 1.01
Transocean Ltd RIG 6.24 5.64 0.00% 0.72
Annaly Cap Mgmt NLY 6.76 6.46 15.13% 1.06
Korea Tele-Adr KT 7.14 6.7 3.68% 0.96
Forest Labs A FRX 7.7 7.07 0.00% 1.79
Cigna Corp CI 7.69 7.17 0.51% 1.5
Lincoln Natl-In LNC 7.31 6.52 0.16% 0.64
Cliffs Natural CLF 6.51 5.66 0.94% 2.65
Micron Tech MU 4.42 4.63 0.00% 0.76
Xl Group Plc XL 7.69 7.13 2.24% 0.61
Average 6.72 6.05 0.02 1.29


ASTRAZENECA PLC (AZN): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
CHINA PETRO&CHM (SNP): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report

About Dirk van Dijk 112 Articles

Affiliation: Zacks Investment Research

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market beating Zacks Strategic Investor service.

Visit: Zacks Investment Research

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