Everyone needs cheap stocks for a solid return. But what cheap really means depends on your growth expectations.
I tell you that earnings are not equal to free cash flow. Some companies need much money to grow or they put large amounts of cash into the business to keep them alive due to high amortizations.
If you look for cheap stocks, you also need to cheap price to free cash flow ratios.
Today I would like to introduce a few dozen or and a few more stocks with a cheap price to free cash flow ratio (less than 15). A ratio under 15 indicates that the potential payout yield is over 6.67%.
In addition, I've only listed those stocks with a positive earnings growth outlook for the next five years. That's in my view a method to filter only well-running business.
Despite the tight criteria, the screen also produced some struggling companies like BHP or Rio Tinto. I like them for sure but I do believe that they are not worth investing while the commodity price still low or at multi-year lows.
Here are the results from my screen...
|19 Cheap Stocks With A Free Cashflow Yield Over 6.67% |
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I think there are a few good names on my latest screen. Do you like any of them? Please leave a comment if you. Thank you.