Investors can get into the market affordably by focusing on lower-priced, quality stocks. I will look at four stocks under $40 that specifically: (1) have worldwide reach as indicated by where the company derives sales, (2) sell at price-to-earnings ratios below their industry averages; and (3) have positive expected earnings and positive earnings growth for fiscal year 2012. Additionally, all of these names anticipate an improvement in their cash positions in the next fiscal year, which improves the balance sheet on the whole. This opens the door to an improved credit rating and lower debt-to-assets ratios, and, for those names that pay dividends, a dividend increase. These are the four names with per diem volume over 100,000 shares per day that made the cut:
Vodafone Group, PLC (VOD)
VOD is trading around $29, well within its 52-week range of $29.75 to $24.31. Its market capitalization is nearly $148 billion, and it has a healthy dividend of $1.92 for a yield of 6.9%.
VOD is the Western world’s largest wireless carrier, and has operations on six continents. It is best known in this country as the 45% minority owner of Verizon Wireless, but by far, most of its revenues are generated outside the U.S. While it faces competition from the likes of AT&T (T) and Sprint Nextel (S), VOD is in a quite different league than its North American competition, and that breadth evens out VOD’s risk and enhances economies of scale. Also, Verizon Wireless is expected to make a one-time dividend payment to its shareholders of several billion dollars in early 2012. To continue reading, click here