If you are a value investor and we all should be, you are looking for bargains however recently the stock market has gone up and prices are more expensive. Is this a time to continue buying or hold or sell? Only in the future will you know the answer but there is always a relative bargain somewhere. Of course, sometimes it is for a reason. Peter Ashton of Recognia Inc examined large cap companies to see if there were any bargains (given this was published in late November, things may have changed but the process remains the same.

a minimum market capitalization of $5 billion. The idea being the larger the company the less the risk.

price to earnings ratio (P/E) of less than 15

annualized earnings per share (EPS) growth rate of 5% or more

debt to equity of 1.5% or less

5 year historical annualized dividend growth of more than 10%.

Company                                 Mkt Cap       P/E        EPS Growth   Debt to Equity  Div Growth   Div

($ Bil)           est           5 yr his  %          Ratio              5 yr %           Yield

MetLife                                   60.2              11.8              51.9                  0.31                 15.8                2.9

Cisco Systems                      150.2             12.8             14.1                  0.45                 59.9               3.4

Lazard                                         5.3             14.3             65.9                 0.80                  23.4               3.8

Principal Financial               16.6              13.3            14.7                  0.31                   22.4              3.0

Amgen                                    107.4             12.7            15.5                   1.15                   61.7              2.8

Invesco                                       13.0            14.0            19.8                  0.77                  20.1              3.5

Ameriprise Financial             18.0            12.3            16.1                   0.86                  30.9             2.6

Xerox                                            9.4               8.2           10.3                   0.77                  11.2              3.3

Gap                                             10.3               13.9             6.5                   0.68                 18.8              3.6

Western Digital                      17.5               13.1           10.0                   1.22                  26.7             3.3

Source: Recognia

Linking to dividend paying stocks, all these companies are paying dividends and for various reasons are lagging behind their peers and still offer good value. In terms of the risk return ratio, you are protected, if you want to buy the hottest stocks it may not be these ones, however if you dig deeper and understand why these companies will still be profitable next year, then one or two of them might be worthwhile to buy. The cycle suggests as they stay profitable the price earnings ratio will rise to the rest of the market.

There are more questions than answers, till the next time – to raising questions.