4 Low Price-to-Book Stocks

Selecting stocks with market capitalizations above $10 billion and price ratios near or below 1.5 could be a good starting point for value investors as they look to find opportunities among the myriad of stocks listed in the United States. Thus, value investors may consider the following stocks as they meet the above criteria and are recommended by Wall Street.

General Motors Co.

The first company under consideration is General Motors Co. (GM, Financial), a Detroit-based designer, manufacturer and marketer of trucks, crossovers, automobiles and automotive parts and accessories in North America, China, Asia-Pacific and internationally.

General Motors Co. was created following the bankruptcy of General Motors Corp. in July 2009. The company primarily markets its vehicles under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun and Wuling brands. In 2021, the company lost its leading position in the United States, with market share down 280 basis points to 14.6%, but General Motors is expected to regain the top spot in 2022.

The stock has fluctuated between $30.33 and $67.21 over the past 52 weeks and traded at $37.56 on August 8. The market cap was around $54.76 billion and the price-to-book ratio was 0.89. Book value per General Motors share for the quarter ended June 2022 was $42.64.

General Motors’ share price fell 30.4% last year, lagging rival Ford Motor Co. (F, Financial), whose shares rose 16.9%, and Stellantis NV (STLA, Financial), whose shares fell 22.5%.

GuruFocus rated the company’s financial strength 4 out of 10 and its profitability 6 out of 10.

On Wall Street, the stock has an overweight median recommendation rating and an average target price of $50.39 per share.

BlackRock Inc. is the company’s largest fund holder with 8.36% of shares outstanding. Vanguard Group Inc. is the second largest fund holder with 7.21%, while Capital Research Global Investors follows in third place with 5.57%.

Wells Fargo & Co.

The second company to consider is Wells Fargo & Co. (WFC, Financial), a major US bank based in San Francisco, California, with total assets of approximately $1.9 trillion, which is almost entirely concentrated in the United States. The company is organized into four main segments: Consumer Banking, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.

The stock has fluctuated between $36.54 and $60.30 over the past 52 weeks and traded at around $43.19 on August 8. The market capitalization was around $163.82 billion and the price-to-book ratio was 1.04. Wells Fargo & Co.’s book value per share for the quarter ended June 2022 was $41.52.

Dividend-adjusted, Wells Fargo & Co.’s stock price fell 9.5% last year, but outperformed peers Bank of America Corporation (BAC, Financial), whose shares fell 15.9%, and Citigroup Inc. (VS, Financial), whose shares also fell significantly by 25.7%.

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On September 1, Wells Fargo & Co. will pay a quarterly dividend of 30 cents per common share, resulting in a 12-month dividend yield of 2.32% and a forward dividend yield of 2.78% at time of writing these lines.

GuruFocus rated the company’s financial strength 3 out of 10 and its profitability 6 out of 10.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $52.85 per share.

Vanguard Group Inc. is the company’s largest fund holder with 8.51% of shares outstanding. BlackRock Inc. is the second largest fund holder with 7.27%, while FMR LLC follows in third place with 4.82% of the company’s outstanding shares.

API BP

The third company to consider is BP PLC (PB, Financial), an integrated oil and gas operator based in London, UK, with international operations.

The stock has fluctuated between $23.39 and $34.30 over the past 52 weeks and traded at around $30.16 on August 8. The market capitalization was around $95.75 billion and the price-to-book ratio was 1.48. The book value per share of BP PLC for the quarter ended June 2022 was $20.85.

Dividend-adjusted, BP PLC’s share price has risen 25% over the past year, outperforming its peers John Wood Group PLC (LSE: WG., Financial), whose shares fell 30.2%, and Quadrise Fuels International PLC (LSE: QFI, Financial), whose shares fell 55.7%.

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On September 23, BP PLC will pay a quarterly dividend of 36 cents per common share, resulting in a 12-month dividend yield of 4.34% and a forward dividend yield of 4.45% at the time of write these lines.

GuruFocus rated the company’s financial strength 5 out of 10 and its profitability 6 out of 10.

On Wall Street, the stock has an overweight median recommendation rating and an average target price of $37.50 per share.

BlackRock Inc. is the company’s largest fund holder with 60.30% of the shares outstanding. Arrowstreet Capital is the second largest fund holder with 0.79%, while State Street Corp. follows in third place with 0.75% of the company’s outstanding shares.

Twillio Inc.

The fourth company to consider is Twilio Inc. (TWLO, Financial), a San Francisco, California-based operator of a cloud-based communications platform as a service with various application programming interfaces and turnkey solution applications focused on improving of customer engagement. These technologies include voice, video, chat and SMS. The company relies on its “Super Network”, a global network of carrier relationships, to enable fast and cost-effective communications.

The stock has fluctuated between $77.14 and $382.75 over the past 52 weeks and traded at around $86.48 on August 8. The market capitalization was around $15.84 billion and the price-to-book ratio was 1.43. The book value per share of Twilio Inc. for the quarter ended June 2022 was $59.46.

Twilio Inc.’s share price has fallen 77% over the past year, lagging companies in similar industries such as Spotify Technology SA (PLACE, Financial), whose shares fell 44.45%, and Match Group Inc. (MTCH, Financial), whose shares also fell 51%.

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GuruFocus rated the company’s financial strength 7 out of 10 and its profitability 3 out of 10.

On Wall Street, the stock has a median Buy rating and an average target price of $135.41 per share.

Vanguard Group Inc. is the company’s largest fund holder with 7.22% of shares outstanding. FMR LLC is the second largest fund holder with 5.83%, while BlackRock Inc. follows in third place with 5.20% of the company’s outstanding shares.

Sallie R. Loera