Contrary to what you might see in the mainstream media, the world's largest stocks are still cheap.
That might surprise you... A lot of the biggest blue chips have
delivered tremendous gains over the last two years. Home Depot, for
example, is up 136%. Visa is up 118%.
But the 189 companies with a market value of $50 billion or more trade at a median 12.9 times forward earnings. That's not expensive. And there's one group of mega-cap stocks that's dramatically cheaper than the rest of the pack.
Let me show you...
As you dig into the value in large-cap stocks, one sector jumps out... energy companies.
Of the 10 major sectors, energy stocks are the cheapest by nearly every measure. Take a look...
|
Sector
|
Price/
Earnings
|
Fwd P/E
|
Price/
Book
|
Price/
Sales
|
Div Yield
|
|
Consumer Disc
|
20.8
|
17.0
|
3.9
|
2.1
|
2.0%
|
|
Consumer Staples
|
19.1
|
17.0
|
4.4
|
3.2
|
2.6%
|
|
Financials
|
11.9
|
10.7
|
1.2
|
1.6
|
2.9%
|
|
Health Care
|
19.6
|
14.2
|
3.7
|
3.3
|
3.1%
|
|
Industrials
|
18.2
|
14.5
|
3.6
|
1.6
|
2.3%
|
|
Technology
|
19.2
|
14.4
|
3.8
|
4.5
|
1.8%
|
|
Materials
|
16.7
|
11.3
|
2.3
|
1.8
|
3.9%
|
|
Telecom
|
14.1
|
12.7
|
2.1
|
1.5
|
3.9%
|
|
Utilities
|
29.4
|
12.2
|
1.0
|
0.5
|
6.9%
|
|
Energy
|
10.5
|
9.1
|
1.4
|
0.9
|
4.2%
|
|
Average Mega-Cap
|
16.4
|
12.9
|
2.4
|
2.0
|
2.8%
|
The world's largest energy stocks trade for just 9.1 times next year's earnings estimates. That's a 29% discount to the entire group... and a 28% discount to the 10-year average price-to-earnings ratio (P/E) on U.S. energy companies. (more)
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