The 10 Cheapest Large-Cap Stocks This Week

This week’s Acquirer’s Multiple Large-Cap screen highlights attractive valuations across energy, financials, materials, technology and media.

Energy is particularly prominent, accounting for six of the 10 cheapest stocks. However, Synchrony Financial remains the cheapest company overall, trading at an Acquirer’s Multiple of just 2.5x.

The Acquirer’s Multiple compares enterprise value with operating earnings.

Here are the 10 cheapest large-cap stocks this week:

1. Synchrony Financial (SYF) — 2.5x

Synchrony is the cheapest stock in this week’s screen. The specialty-finance company also has a 39.7% free-cash-flow yield and 14.8% shareholder yield.

2. Equinor (EQNR) — 3.4x

Norwegian energy producer Equinor ranks second. It has a 9.2% free-cash-flow yield, 8.9% shareholder yield and 3.6% dividend yield.

3. Petrobras (PBR) — 5.2x

Petrobras combines a low Acquirer’s Multiple with a 14.2% free-cash-flow yield and 5.7% dividend yield. Investors must also consider its exposure to commodity prices and Brazilian government policy.

4. APA Corporation (APA) — 5.6x

APA trades at 5.6x, with a 13.3% free-cash-flow yield. Its valuation will remain sensitive to oil and gas prices, production results and capital allocation.

5. BP (BP) — 7.1x

BP offers a 13.9% free-cash-flow yield, 8.2% shareholder yield and 4.4% dividend yield. The company’s energy-transition spending and commodity exposure remain important considerations.

6. YPF (YPF) — 7.5x

Argentine energy producer YPF trades at 7.5x. Its valuation reflects both its operating assets and the substantial political, economic and currency risks attached to investing in Argentina.

7. CF Industries (CF) — 7.6x

CF Industries is the only materials company in the top 10. The fertiliser producer has a 9.5% free-cash-flow yield and a five-year average return on assets of 21%.

8. Shell (SHEL) — 7.6x

Shell combines a 10.9% free-cash-flow yield, 8.5% shareholder yield and 3.2% dividend yield. It is the fifth integrated oil and gas producer among the 10 cheapest companies.

9. Cognizant Technology Solutions (CTSH) — 8.0x

Cognizant provides exposure to technology services rather than commodities. It has a 9.6% free-cash-flow yield, 11.0% shareholder yield and relatively low debt.

10. Fox Corporation (FOXA) — 8.3x

Fox rounds out the list at 8.3x. Its 8.9% shareholder yield is supported primarily by share repurchases, while investors must assess the durability of its traditional media businesses.

Bottom Line

Energy continues to dominate the cheapest end of the large-cap market, but this week’s list also contains opportunities across financials, materials, technology and media.