NEW YORK (TheStreet) - Every so often, MagicDiligence compiles a list of Magic Formula stocks sorted by their dividend yield, price-to-sales ratio, and price-to-book ratio for investors that like to use those metrics.
The result is a list of attractive value stocks for additional research. Here are the top 10 in each of the three metrics listed above:
Dividend yield is a favorite metric for income investors, providing both steady, predictable returns and downside protection. With Magic Formula Investing, you are also buying dividend stocks that are both cheap against earnings and represent a company that efficiently invests capital.
The Top 10 Magic Formula highest dividend yield stocks (forward yield) right now are: (1) 7.0% - EarthLink Inc (ELNK); (2) 6.4% - Altria Group (MO); (3) 6.1% - Reynolds American (RAI); (4) 5.9% - United Online (UNTD); (5) 5.6% - Value Line (VALU); (6) 5.5% - Lorillard (LO); (7) 4.7% - Garmin (GRMN); (8) 4.6% - H&R Block (HRB); (9) 4.5% - Deluxe Corp (DLX); (10) 4.3% - Lockheed Martin (LMT).
Price-to-Sales RatioUsing the price-to-sales ratio was a tactic shown to be highly successful by such guru investors as Ken Fisher in Super Stocks and by James O'Shaughnessy in What Works on Wall Street. The Top 10 Magic Formula stocks with lowest price-to-sales ratios are: (1) 0.11 - AmerisourceBergen (ABC); (2) 0.15 - McKesson (MCK); (3) 0.16 - Eastman Kodak (EK); (4) 0.24 - Unisys (UIS); (5) 0.26 - Providence Service (PRSC); (6) 0.29 - Oshkosh (OSK); (7) 0.35 - GameStop (GME); (8) 0.36 - EMCOR Group (EME); (9) 0.46 - Dell (DELL); (10) 0.49 - Amedisys (AMED).
Price-to-Book RatioFinally, the price-to-book ratio is often considered the "classic" test of value investing: Are you buying a company at or less than the net value of its assets? Price-to-book ratio was a favorite of the "father" of value investing, Ben Graham. The top 10 Magic Formula stocks with lowest price-to-book ratio are: (1) 0.51 - Jiangbo Pharmaceuticals (JGBO); (2) 0.92 - Amedisys (AMED); (3) 1.03 - Time Warner (TWX); (4) 1.17 - GameStop (GME); (5) 1.21 - AOL (AOL); (6) 1.25 - Comtech Telecommunications (CMTL); (7) 1.26 - Argan (AGX); (8) 1.27 - EarthLink (ELNK); (9) 1.29 - Motorcar Parts of America (MPAA); (10) 1.31 - United Online (UNTD).
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV