Once again, Energy and Financials dominate the value landscape, underlining persistent market skepticism about the durability of cash flows in these sectors.
From Petrobras (PBR), trading at an Acquirer’s Multiple (AM) of 4.0 with a stunning 36.8% free cash flow yield, to Bank of New York Mellon (BK) at just 1.8 AM with steady buybacks and dividends, the case for energy and finance remains compelling.
Second-Tier Strength: Finance and Energy
The Finance sector continues to stand out. Synchrony Financial (SYF) screens cheaply at 2.4 AM and boasts a remarkable 35.3% FCF yield. Despite strong profitability, investors remain cautious on consumer credit risk, leaving SYF deeply discounted.
On the energy side, Equinor (EQNR) appears attractive at 2.6 AM, supported by an 11.9% FCF yield and a double-digit dividend yield north of 10%. Yet the stock remains priced as though long-term fossil fuel demand will collapse.
Why It Matters
When clusters of sectors dominate value screens, it signals persistent market fears. Energy continues to be treated as a sunset industry, while finance trades at compressed multiples amid worries over credit quality and rate sensitivity. Historically, these conditions have provided opportunities for patient contrarians.
Bottom Line
The current screen is energy-led, with finance providing additional deep-value exposure. For long-term investors willing to lean against market skepticism, these names may offer the kind of “patience premium” that value investing has historically rewarded.
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