Value Investor Daily #60

3 Stocks at Half the Market’s P/E and Double the Yield

November 13, 2024

In partnership with

The NEXT Trillion Dollar Company?

This company just signed a MASSIVE deal with Apple.

It gets their AI tech in Apple’s iPhones and iMacs until 2040!

But it goes beyond that.

The company is getting its tech into products by Nvidia, Google, and Samsung too.

Its AI tech is so crucial…

Nvidia is actually buying up the stock too.

They’ve invested more in this one company than any other… nearly $150 million.

Is this stock the next Nvidia… which has gone up 81,700% over the last 20 years?

Since Trump’s win a week ago, markets continue to move higher.

The S&P 500 dividend yield is 1.22%, nearing its lowest point of all time—1.11%, last seen in the 2000 tech bubble.

We know how that ended. This could explain why Buffett is sitting on $325 billion of cash. 

Meanwhile, the market trades at 30 times earnings versus the long-term average of 16X. 

Stocks might deserve those valuations, given Trump’s plans to cut corporate taxes, but there’s still a lot of political maneuvering to be had first. It could take months or even years for his agenda to take shape. It all depends on how fast Congress gets on board.

Where can value investors hide out in the meantime?

Here are a few ideas trading half the P/E and double the dividend yield (or better).

EOG Resources (EOG)

  • Oil and natural gas drilling and exploration operator since 1985

  • Trades at 10.7X earnings

  • Dividend yield - 2.73%

  • Payout ratio - 30%

  • 25 years of consecutive dividend payments

  • $6.12B cash on hand vs. $4.11B total debt

  • $6.8 billion share repurchase authorization vs. $74.8 billion market cap (9%)

VICI Properties (VICI)

  • Experiential (gaming, leisure, hospitality) REIT

  • Owns 93 properties, including:

    • 127 million square feet of space

    • 60,300 hotel rooms

    • 500+ restaurants, bars, nightclubs, and sportsbooks

  • 11.5X Price-to-Funds-From-Operations ratio (P/FFO)

  • Dividend yield - 5.38%

  • FFO payout ratio - 62%

  • Triple-net (NNN) lease agreements with tenants

  • 100% occupancy as of latest earnings release

Molson Coors (TAP)

  • Founded in 1774.

  • P/E ratio (GAAP TTM) - 13.96X

  • Dividend yield - 2.8%

  • Payout ratio - 32%

  • 7.86% annualized dividend growth since 1989

  • Buying back shares now after the last nine years of paying down debt

What do you think? Do you like quietly collecting dividends while you wait for market valuations to come back down? Or are you getting FOMO that the Trump rally will continue for months?

As always, do your own research before investing.

Thank you for reading today!

Happy Investing,
Value Investor Daily

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