Industrias Bachoco, S.A.B. de C.V. (ADR) (NYSE:IBA), which trades as an ADR (American depositary receipt), has a P/E of 8.1 and a dividend yield of 1.3%.
AMCON Distributing
Based in Nebraska, AMCON Distributing Co. (NYSEAMEX:DIT) has two divisions. The wholesale distribution division delivers more than 14,000 consumer products to 5,000 retail outlets across the U.S. On the retail side, the company operates 15 health food retail stores through the Midwest and Florida. A small company, AMCON Distributing Co. (NYSEAMEX:DIT) has a market cap of just $51.4 million, a P/E ratio of 9.0 and a dividend yield of 0.9%.
Ingredion
Illinois-based Ingredion Inc (NYSE:INGR) makes and sells starches and sweeteners. Formerly known as Corn Products International, this century-old company has a market cap of $4.9 billion. In addition to having pantry staples such as Argo, Karo and Mazola in its portfolio, Ingredion Inc (NYSE:INGR)’s products are used by customers in the food, beverage, brewing, animal feed, paper and corrugated materials industries. Ingredion has a large global footprint: Its products are sold in 40 countries, and nearly 45% of its sales are from outside the U.S. Because its products are derived primarily from processing corn and other starch-based materials such as tapioca, potatoes, rice and sugar, the company hedges its exposure to commodity fluctuations. It also hedges for its energy needs and currency fluctuations. INGR has a dividend yield of 2.4%, the best of the bunch, and a P/E of 11.6.
Risks to Consider: Investors need to exercise their own preferences when using the GARP method, a hybrid of value and growth investing, and must rely on their own interpretation of a company and their own judgment. Note that returns for GARP stocks are very different from those stocks chosen for pure value or pure growth investment. During a bull market, the growth-only strategy would be preferable. GARP investors tend to do better in a bear market.
Action to Take –> With stock prices ranging from $40 to nearly $200, none of these stocks is cheap to get into in absolute terms. If you’d like to look for your own GARP bargains, traditional GARP investing looks for companies that have the lowest price/earnings-to-growth (PEG) ratios, as opposed to P/E multiples. This method would lead investors to Inter Parfums, which has the lowest PEG ratio of the five.
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