For the value investor, here are a few small caps of the Russell 2000 index, now trading below book value and paying dividends.
The index itself has recently fallen to new 52-week lows, an indication that value might now be present among the components. Nothing is guaranteed but this is how Benjamin Graham used to find stocks.
Several of these names are very small capitalization with low average daily volume, making it difficult for the big institutions to invest but that doesn’t mean retail investors have to avoid them.
These represent a possible means of diversification for those unhappy with holding only big-name tech and social media stocks — some of which have become more volatile lately.
Russell 2000 Small Caps.
Enact Holdings is a mortgage insurance company with corporate headquarters in Raleigh, North Carolina. Formerly known as Genworth Mortgage Insurance, the company offers underwriting services and supports state Housing Finance Agency (HFA) loans.
Now trading with a price-earnings ratio of just 6.45 and at a 2% discount to its book value, market capitalization comes to $4.30 billion. This year’s earnings are off by 9.94% — over the past 5 years EPS growth is 9.76%. Enact Holdings is paying a dividend of 4.12%.
Peabody Energy
BTU
is a thermal coal producer based in St. Louis, Missouri, in business since 1883 with primary operations in the United States and in Australia. The company also has coal production in Japan, Taiwan, India, Brazil and other international locations. Market cap is $3.30 billion.
Shares of stock in Peabody Energy are trading at a 2% discount to book value with a price-earnings ratio of 3.30. Long-term debt is greatly exceeded by shareholder equity. Earnings this year are down by 41% — growth over the past 5 years is up by 40.60%. Investors receive a 2.14% dividend.
Peoples Bancorp (Marietta, Ohio) is a Marietta, Ohio-based financial institution, founded in 1902 and now operating 133 branch offices in Ohio, Kentucky, West Virginia, Virginia, Washington, D. C. and Maryland. The bank’s market capitalization amounts to $960.65 million.
The stock trades with a price-earnings ratio of 7.90 and at 97% of its book value. This year’s earnings are up by 10% and over the past 5 years, EPS growth is 11.37%. Price to free cash flow is 8.93. Average daily volume is light at just 92,000 shares. People’s Bank pays a dividend of 5.71%.
PBF Energy is an oil and gas refining and marketing firm with corporate headquarters in Parsippany, New Jersey.
According to the company’s website, it’s “one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States.”
The stock’s price-earnings ratio is a mere 1.92 and it trades at a 5% discount from book value. This year’s earnings are off by 49% — the EPS over the past 5 years is up by 43.70%. Market cap is $5.70 billion. PBF pays a 1.81% dividend.
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