Out of five dozen publicly traded companies with valuations
in excess of $100 billion, only these six bear single-digit forward P/Es -- but
are these companies really as cheap as they appear?
Investors have experienced quite the rollercoaster ride in
2016. Volatility is always present in the stock market to some degree, but the
near-immediate 10% plunge in all three major U.S. indexes that began the year,
and the ferocious three-week rally that's in effect eliminated the majority of
those early year losses, probably have investors wondering what's next.
To calm investors' jitters, we've been looking at a myriad
of ways large-cap and megacap stocks (those with valuations in excess of $100
billion) can be used to provide stability, and often income, for investors.
We've examined companies with strong records of cash flow, and we've also
looked at businesses sitting on veritable boatloads of cash. What we've
not done yet is look at megacap stocks that look downright cheap.
The cheapest megacap stocks
What's considered cheap? Well, that's completely arbitrary
since certain industries naturally trade at lower price-to-earnings multiples
(the most common measure of a publicly traded company's "value") than
others. But for the sake of argument, we'll only consider companies trading at
forward P/Es of less than 10.
As of last Monday's close (March 21), there were 60 publicly
traded stocks sporting valuations in excess of $100 billion. However, just six
of these megacap companies offer investors the chance to be partial owners of
businesses with single-digit forward P/Es. Here's a snapshot of all six
companies...