This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

4 Bargain Stocks With Top Free Cash Flow Yields

Stocks in this article: GMEXRXETFCPRU

Prudential Financial

Investors have largely been ignoring the shares of insurance companies in recent years, in large part because low interest rates are depressing this industry's earnings. Insurers sit on billions of dollars in cash to pay out against future policy claims, and when rates are higher, all that money earns a pretty penny.

Prudential (PRU) is no exception. Shares trade for just 71% of tangible book value. More to the point, this company looks awfully cheap when you look at free cash flow. Prudential is on track for the second straight year of free cash flow in excess of $10 billion, and that figure will likely rise even higher when interest rates start to move up.

How do you square such large numbers against this insurer's $27.5 billion market value? Frankly, it's hard to fathom.

Analysts at Citigroup think that if you are going to invest in just one insurance stock, you should choose Prudential. According to Citigroup, Prudential "offers the best risk-reward among large cap multi-line life insurers. In our view, the company's improving ROE, above-average near-term earnings growth, and superior business mix merit a valuation above the life group average." To be sure, there isn't much risk in a stock that has already traded so far below tangible book value.

Notably, book value is likely to keep on rising in coming years, thanks to the company's impressive free cash flow. Book value per share currently stands at around $79 a share (compared with a stock price of $57). Citigroup's analysts expect book value to approach $85 a share this year and exceed $90 a share in 2014.

To see these free cash flow kings in action, visit the 4 Free-Cash-Flow Powerhouses portfolio.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

Stockpickr is a wholly owned subsidiary of TheStreet.com.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,478.95 +79.28 0.48%
S&P 500 1,923.20 +19.19 1.01%
NASDAQ 4,370.7770 +54.7030 1.27%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs