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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Value Stocks With Low Price-to-Earnings Ratios: Chevron, Unum, Aflac, More

NEW YORK (TheStreet) -- How should investors pick among the great companies in the market today?

By using the ModernGraham Valuation Model, I've selected the five lowest PEmg (price per our measure of normalized earnings) companies that we review. Each company is suitable for the defensive investor -- someone not able or willing to do substantial research into individual investments, and therefore someone who needs to select only companies that present the least risk. Enterprising investors, on the other hand, are able to do substantial research and can select companies that present a moderate (though still low) amount of risk.

Here are our picks to consider.

1. National Presto Industries (NPK)

National Presto Industries is a strong company that fares well in our metrics. The company only fails the market cap requirement of the defensive investor.  All value investors should feel comfortable proceeding with further research into the company.

There's one hitch: the company appears to be overvalued at the current time. National Presto has grown EPSmg (our measure of normalized earnings) from $6.60 in 2009 to $6.73 in 2013, a very low level of growth that does not support the market's current implied estimate of 0.83% earnings growth.  

The ModernGraham valuation model has accordingly estimated an intrinsic value that falls below a margin of safety in relation to the price.


NPK Chart

NPK data by YCharts

2. Ensco (ESV)

Ensco is suitable for either the defensive investor or the enterprising investor. The defensive investor's only concern is the low current ratio, but the company passes all of the other requirements. The enterprising investor has some concerns, but since the company is suitable for defensive investors it is by default also suitable for enterprising investors. Value investors should feel very comfortable proceeding with further research into the company.  

From a valuation perspective, the company does not fare very well after seeing a drop in EPSmg (our measure of normalized earnings) from $6.13 in 2009 to $4.91 for 2013. This lack of demonstrated earnings growth does not support the market's implied estimate of 1.0% earnings growth and leads our valuation model to return an estimate of intrinsic value that is well below the market price.

ESV Chart

ESV data by YCharts

Up next: Chevron.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

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