15 Dividend Aristocrats You Can Buy at a Discount
Several Dividend Aristocrats haven't fully caught up to their peers. As a result, new money can buy lower prices and higher yields on these longtime income growers.
Finding reliable dividend growth stocks in 2020 – a year in which more than 60 S&P 500 companies have already cut their payouts – feels like a daunting task. Fortunately, investors can look to the Dividend Aristocrats.
The Dividend Aristocrats are an elite group including many of Wall Street's best dividend stocks that specialize in consistently rising cash distributions. To become an Aristocrat, a company must deliver at least 25 consecutive years of dividend hikes.
Dividends smooth out returns in times of volatility. They also contribute sizably to overall performance – dividends typically make up one-third of a stock's long-term total returns, according to Standard & Poor's. Those steady dividends and sturdy balance sheets make the Dividend Aristocrats less risky than non-dividend-paying stocks, and have helped drive long-term outperformance against the S&P 500.
But they're hardly impervious to market downturns. And because of the Aristocrats' lack of exposure to highflying stocks such as Amazon.com (AMZN), Netflix (NFLX) and Alphabet (GOOGL), the index has significantly underperformed in 2020.
The upshot, however, is that several Dividend Aristocrats trade at a discount right now. Read on as we examine 15 elite dividend growth stocks that are currently valued at discounts to their industry peers or their own historic valuations (or both).
Data is as of Sept. 9. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.
- Market value: $26.1 billion
- Dividend yield: 1.1%
Carrier Global (CARR, $30.13) is the popular name behind heating, ventilation, air conditioning (HVAC) and refrigeration systems worldwide. However, Carrier also sells smoke and carbon monoxide detection devices and security systems.
It's also a relatively new standalone investment; Carrier went public in April 2020 via a spinoff from its former parent United Technologies as part of a merger with Raytheon that also created Raytheon Technologies (RTX) and Otis Worldwide (OTIS).
As a standalone business, Carrier was almost immediately hit with headwinds from the COVID pandemic. Sales declined 15% year-over-year during the first half of 2020, and adjusted earnings per share (EPS) dropped 44%. However, management notes orders began strengthening in June, which caused Carrier to slightly boost its 2020 outlook for sales, adjusted operating profits and free cash flow.
Over the long term, Carrier plans to build value for shareholders by trimming more than $600 million from annual costs via better supply chain management and capitalizing on mega-trends, which include rising demand for HVAC from China's growing middle class.
As part of United Technologies, which was a Dividend Aristocrat, Carrier has a 26-year track record of dividend growth. And in June, CARR announced its first standalone dividend, an 8-cent-per-share payout that was delivered in July.
CARR shares don't have much in the way of historical valuations to analyze, of course. But a forward-looking price-to-earnings of 20 is a mid-single-digit discount to its industrial sector peers.
Argus Research, which rates Carrier Global's stock at Buy, writes that "CARR shares appear attractively valued at current prices near $30." UBS (Buy) also notes that the company's fire and security business provides stability during uncertain times.
- Market value: $120.6 billion
- Dividend yield: 1.5%
Home improvement retailer Lowe's (LOW, $159.53) operates roughly 2,000 stores across the U.S. and Canada, serving more than 18 million customers each week. Ranked by revenues, the company is the nation's second largest home improvement chain behind chief rival Home Depot (HD).
Unlike some other Dividend Aristocrats, LOW stock has prospered during the pandemic, shooting 35% higher year-to-date as consumers spend more on home repair and maintenance. Lowe's comparable-store sales (revenues generated in stores that have been open at least 12 months) jumped 34% year-over-year during the June quarter, overall sales grew an astonishing 135% and adjusted EPS rose 74%. Management said sales momentum was continuing in August, which caused several analysts to raise their 2020 EPS estimates.
Lowes signaled strong confidence in future earnings by hiking its dividend 9.1% in August, to 55 cents per share – its 58th consecutive annual dividend hike.
In an August letter to investors, Bill Ackman's Pershing Square Capital Management highlighted Lowe's as one of its top stock picks. According to Pershing Square, Lowe's is benefiting from recent actions taken to improve competitive positioning and market share. These include improvements to merchandising to drive higher same-store sales, and investments in e-commerce platforms and supply chains to boost profit margins and EPS growth.
Pershing Square said it thinks LOW's shares are undervalued, which they seem to be, given a 19x forward P/E multiple that represents a 20% discount to competitor Home Depot.
Johnson & Johnson
- Market value: $394.1 billion
- Dividend yield: 2.7%
Health care giant Johnson & Johnson (JNJ, $149.70) is a global leader in pharmaceuticals, consumer health and medical devices. The company's portfolio includes 26 products that each generate more than $1 billion of annual sales. These include familiar consumer brands such as Listerine, Tylenol and Neutrogena, as well as prescription drugs Stelara, Xarelto and Imbruvica. More than 70% of JNJ's sales are derived from products that hold No. 1 or 2 market share worldwide.
This strong portfolio has helped the company generate 36 consecutive years of operating earnings growth and 58 years of uninterrupted dividend growth.
Johnson & Johnson's June-quarter sales dropped 11% year-over-year and adjusted EPS fell 35%, largely as a result of deferred medical procedures during the pandemic that impacted the medical devices segment. Despite this, the company tightened the range for full-year sales and adjusted EPS, and it provided guidance that exceeded most analyst estimates.
J&J recently agreed to pay $6.5 billion in cash for Momenta Pharmaceuticals, a developer of treatments for autoimmune diseases. The acquisition gives JNJ a key autoimmune disorder therapy and several drug candidates, each of which could achieve over $1 billion in peak sales.
"Strategically, if successful clinically with approval timelines holding, launches will come at a key time for JNJ when it starts to lose exclusivity in its Immunology franchise in the ~2024 timeframe from Stelara and Simponi," write UBS analysts, which rate the stock at Neutral but see 7% upside over the next 12 months.
The company also is a key player in the race for a COVID-19 vaccine and is expected to launch Phase 3 trials of its vaccine candidate in September. JNJ has 60,000 patients enrolled in these trials, which is twice the size of the trials of other vaccine developers.
Johnson & Johnson boasts an excellent balance sheet showing more than $19 billion of cash, and it has generated $19 billion in free cash flow over the trailing 12 months. Its 68% dividend payout ratio is fine, but not great, indicating a safe dividend, but one that has room for only modest payout growth over time.
Still, a forward P/E of less than 19 offers a nice 15% discount compared to JNJ's health care peers.
- Market value: $26.4 billion
- Dividend yield: 3.0%
Aflac (AFL, $37.04) provides supplemental insurance to more than 50 million people worldwide through its U.S. and Japan subsidiaries, paying out cash when policyholders are sick or injured. In Japan, Aflac is the leading provider of cancer and medical insurance, covering one of every four households.
Recurring premium revenues and the company's prudent capital management have combined to generate relatively steady EPS growth averaging 7% annually over the past three years, and 6% annually over the past five.
Aflac's revenues for the first six months of 2020 declined by more than 5% year-over-year, to $10.6 billion, but adjusted EPS improved 10%, fueled by a favorable U.S. benefit ratio due to medical visits deferred during the pandemic. Analysts think Aflac will generate at least 5% adjusted EPS gains this year.
Longer-term, Aflac benefits from macro trends that include consistently rising health care costs in the U.S. and Japan and an expanding self-employed work force, which is creating a significant U.S. growth opportunity.
Aflac has delivered 38 consecutive years of dividend growth, and over the past five years, its hikes have averaged about 7% annually. A modest 24% payout ratio signals that the dividend is plenty safe.
AFL shares have taken it on the chin in 2020, off 28% year-to-date. But as a result, this Dividend Aristocrat is trading at a deep discount. Its forward P/E of 8 represents a 30% discount to the financial services sector and a 25% discount to the company's own historic average.
- Market value: $41.9 billion
- Dividend yield: 3.0%
Defense contractor General Dynamics (GD, $146.17) specializes in business aviation, combat vehicles, weapon systems, IT services, C4ISR solutions and ship building. The company is known for its Gulfstream aircraft, Abrams tanks, Stryker armored vehicles and nuclear-powered submarines. With total 2019 sales of $31 billion, General Dynamics ranks as the world's sixth largest defense contractor.
The company has underperformed other defense contractors in recent years because of its Gulfstream aviation segment, which has been slow to recover from the last recession. However, GD's long-term prospects appear to be improving due to a U.S. Navy contract for Columbia-class nuclear submarines, the largest in shipbuilding history, and wins for its IT business, which benefits from upgrades being made to government systems to facilitate work-from-home practices.
General Dynamics' EPS fell 14% year-over-year during the first six months of 2020, but total backlog grew 22% to $82.7 billion. Significant contract wins during the June quarter included $11.5 billion for Columbia-class submarines and $320 million for upgrades to Stryker vehicles. In August, the company was awarded a $870 million contract by Spain's military for combat vehicles.
A 15% decline for GD shares have brought this Dividend Aristocrat to a forward P/E of 14 – that's less its own historical average of 16 and well below the defense industry's 22 average. That buys you a company with 28 consecutive annual dividend increases under its belt, including a 7.8% raise announced in March.
Archer Daniels Midland
- Market value: $25.6 billion
- Dividend yield: 3.1%
Archer Daniels Midland (ADM, $46.05) procures, stores, processes and delivers agricultural commodities such as corn, wheat, oats, rice and barley. The company is already the world's largest corn processor and hopes to become the global leader in human and animal nutrition. ADM is truly global, logging sales in more than 200 countries and serving customers through a network of 347 food and feed processing locations and 800 storage facilities.
ADM recorded a massive 84% year-over-year improvement in EPS during the first six months of 2020. That was credited to robust growth in the company's human nutrition segment, fueled by rising demand for plant-based proteins and specialty ingredients. Archer Daniels Midland expects long-term growth to come from bolstering the financial strength of each of its business units, harvesting $1.2 billion of annual savings and investing in new specialty and ingredient products.
In addition, ADM should benefit from a surge in export demand from China during the second half of 2020 that could lead to record fourth-quarter profits. China is aggressively buying American corn and soybeans as part of Phase 1 of the U.S./China trade deal. CEO Juan Luciano said during the Q2 earnings conference call that China "is taking all the actions that reflect their intention to comply" with the deal.
ADM has a laudable dividend growth streak as far as Dividend Aristocrats go, at 46 consecutive years. Hikes have averaged a modest 5.2% over the past five years, however, including a mere 3% bump to the payout earlier this year. Still, ADM has $1.2 billion in cash on hand, and a moderate 45% dividend payout ratio provides plenty of flexibility for future dividend growth.
Shares currently trade at 15 times analysts' consensus earnings estimates for next year, which is a roughly 30% discount to its industry peers. Argus Research agrees ADM is a value based on its own data, too.
"ADM shares appear favorably valued at 14.1-times our 2020 EPS estimate, toward the low end of the five-year historical range of 12-20 and below the peer average of 17.6," writes analyst Deborah Ciervo, who calls the stock a Buy.
- Market value: $14.4 billion
- Dividend yield: 3.2%
Genuine Parts (GPC, $99.67) sells automotive replacement and industrial parts through a network of more than 10,000 locations across North America, Mexico, Europe and Asia Pacific, primarily under the NAPA brand. Across all its brands, GPC operates the world's largest auto parts network, which is comprised of 2,500 company-owned stores, 7,000 franchise stores and 25,000 global repair center partnerships.
Genuine Parts benefits from a gradually strengthening U.S. economy and plans to accelerate growth by acquiring new customers, introducing new products and services and expanding its geographic footprint. The company has an impressive performance record showing 87 years of sales growth, 75 years of profit growth and 64 consecutive years of dividend increases.
COVID-19 related lockdowns caused the company's adjusted EPS to contract 19% in the first six months of 2020. Genuine Parts focused on strengthening its balance sheet during the June quarter, boosting operating cash flow by $500 million through the sale of receivables and using $400 million from a business sale to reduce debt.
The company has solid financials, including $1 billion of cash on hand and $2.2 billion in free cash flow over the trailing 12 months.
"We have a favorable view of the company's portfolio optimization strategy, which positions it well for higher margins and global business expansion," writes Argus Research, which recently reiterated its Buy rating and raised its 12-month price target from $84 per share to $105. "GPC's strong balance sheet provides resources to invest in these efforts and to enhance earnings with small, bolt-on acquisitions."
GPC's dividend payout ratio of 66% is decent and indicates the potential for some (albeit not remarkable) continued dividend growth over time.
Shares are a deal, though. A 20 forward P/E represents a 9% discount to industry peers. GPC also trades at 12 times future cash flows, which is an even wider 17% discount to its industry, as well as a 14% discount to its historical average valuation.
Leggett & Platt
- Market value: $5.7 billion
- Dividend yield: 3.7%
Leggett & Platt (LEG, $43.17) manufactures bedding, furniture, flooring, textiles and automotive seating. The company is the leading American manufacturer of bedding components, specialty bedding and private label mattresses, and it's also the market leader in automotive seat support and lumbar systems. It sells mainly to other manufacturers from its 140 global production facilities.
Leggett & Platt's sales slumped 30% year-over-year in the June quarter due to COVID-19 effects. Adjusted EPS fell drastically, by 75%. But LEG did note that demand was improving in July and that aggressive expense reductions were helping offset some of the earnings impact of slowed demand. Leggett & Platt cut $35 million from June quarter expenses and targets full-year cost savings exceeding $100 million.
Over the longer term, Leggett & Platt targets 6% to 9% annual sales growth, which will be achieved through a combination of organic growth and acquisitions. Organic sales gains will come from increasing content and new programs, expanding addressable markets and identifying new growth platforms.
Leggett & Platt has delivered 48 consecutive years of rising dividends while maintaining a steady payout ratio around 50%, but it should be noted that the company has not yet increased its dividend in 2020. Still, management said in early August that the company was "committed to maintaining our strong balance sheet, investment-grade credit rating, and position as a Dividend Aristocrat."
LEG's progress over the past few months has slimmed its discount. But a 22 forward P/E still represents a 3% discount to its competitors. Its trailing 12-month price-to-cash flow is also at a slight discount to peers and a nearly 22% discount to peers. (No forward-looking estimates for cash were available as of this writing.)
- Market value: $14.5 billion
- Dividend yield: 3.9%
Cardinal Health (CAH, $49.54) is a leading drug distributor that serves nearly 90% of American hospitals and more than 29,000 pharmacies. The company distributes branded and generic pharmaceuticals, over-the-counter health care products, and branded medical, surgical and laboratory products.
Volume declines related to COVID-19 limited the company's adjusted EPS growth to just 3% in its 2020 fiscal year, which ended June 30. And Cardinal Health is guiding for roughly flat profits in 2021.
However, the company paid down more than $1.4 billion of debt last fiscal year and returned more than $900 million to shareholders through dividends and share repurchases. Longer-term, investors should benefit from Cardinal Health's initiatives to trim more than $500 million from annual costs and investments in growth areas such as its At-Home and Services arms.
"While CAH sees a number of opportunities for the segment in terms of investment in at-home services and products to increase access and convenience for customers, the Covid crisis has weighed heavily on Medical, with the estimated FY21 impact to disproportionately impact this segment," write Deutsche Bank analysts, who rate CAH at Hold. "It is likely that the changes and opportunities the company hopes to pursue will be tabled until FY22, when the company anticipates exiting the pandemic."
Still, Cardinal Health has increased dividends 35 years in a row, and at a 4.7% annual rate over the past five years. A low 35% payout ratio provides plenty of coverage for the dividend, however, as well as room for more robust increases.
This Dividend Aristocrat is a steal, too, at just 9 times forward earnings estimates. That's roughly a third of what its peers are priced at, and a 25% discount to CAH's own historical forward P/E.
- Market value: $24.4 billion
- Dividend yield: 4.2%
Consolidated Edison (ED, $72.91), one of the better-known utility stocks on Wall Street, owns regulated utility businesses that provide electricity, natural gas and steam to customers in New York City, nearby Westchester County, southeastern New York State and northern New Jersey. The company supplies electricity to more than 3.6 million customers and natural gas to 1.2 million customers. ED also invests in renewable energy and is the second-largest solar power producer in North America.
ED shares have been weighed down by downgrades to the utility stock's debt rating. Both Moody's and Fitch reduced their ratings on pandemic-related concerns that kilowatt hours were declining because of to shuttered commercial businesses and escalating bad debt expense.
Consolidated Edison's March-quarter results were poor, but the company delivered solid June-quarter results that beat analyst estimates by a wide margin. Adjusted EPS were down only 1% for the first six months of 2020, and ED reaffirmed guidance for full-year adjusted profits to decline less than 3% year-over-year at the midpoint of guidance.
Edison plans to spend approximately $4 billion per year over the next three years upgrading its transmission system and the company will also benefit from 5%-plus annual rate increases through 2023.
ED has hiked dividends 46 years in a row. Dividend growth exceeded 3% annually over the past five years and includes a 3.4% increase this year. years and includes a 3.4% increase this year.
Credit Suisse analyst Michael Weinstein recently upgraded ED to Neutral from Underperform (equivalent of Sell), pointing at its Q2 earnings improvement "largely from improved weather and lower opex for the renewable portfolio" and its valuation. ED currently trades at 17 times forward earnings – a 9% discount to its historical valuations, and a little below the utility-sector average.
Walgreens Boots Alliance
- Market value: $32.0 billion
- Dividend yield: 5.1%
Shares of Walgreens Boots Alliance (WBA, $35.35) were hammered in July when the company posted a 44% decline in June-quarter EPS due to COVID-19 effects. The company's U.S. business performed well, but U.K. results were dismal. More than 100 U.K. stores were closed over those three months, and remaining stores were limited to selling pharmacy and essential health items only, leading to a 85% reduction in foot traffic.
Walgreens merged with Boots Alliance, Europe's largest pharmaceutical wholesaler, six years ago. The upscale health and beauty products sold in Boot's stores has helped to offset margin erosion for Walgreens, which has struggled due to declining prescription drug sales and growing online competition.
WBA hopes to return to profitable growth via initiatives such as its primary care clinic collaboration with VillageMD and digital marketing partnerships with Adobe (ADBE) and Microsoft (MSFT). The company is also targeting more than $2 billion in annual cost savings, which will be achieved through headcount reductions, closing some Boots Opticians stores and restructuring the chain's retail offering.
While the Boots acquisition left WBA burdened with a high $12.1 billion debt load, the company's solid free cash flow ($3.4 billion in the trailing 12 months) makes debt manageable at a ratio of 4.8 times free cash flow.
Walgreens has rewarded investors with 45 years in a row of dividends hikes. The most recent payout increase was a 2% top-up announced in July.
WBA is valued at just 7.5 times next year's earnings estimates, which is a 64% discount to its consumer staples peers, and a 42% discount to their own historical average. Just note that Walgreens is the worst-ranked Dow stock at the moment, with analysts solidly in the Hold camp.
- Market value: $161.7 billion
- Dividend yield: 5.2%
Pharmaceutical developer AbbVie (ABBV, $91.63) owns blockbuster drugs like Humira and Rinvoq for arthritis, Skyrizi for psoriasis and Imbruvica for leukemia and lymphoma. The company added the leading anti-wrinkle drug, Botox, to its portfolio this year by acquiring Allergan.
The main concern investors have about AbbVie is patent expirations on its blockbuster drug Humira, which accounted for nearly 60% of annualized sales last year. Humira is losing U.S. patent protection in 2023. However, AbbVie has new rheumatoid arthritis drugs in clinical trials that may replace Humira and significantly upgraded its portfolio of cutting-edge oncology drugs by partnering recently with Genmab (GMAB).
AbbVie has delivered consistent double-digit EPS and dividend growth since its spin-off from Abbott Laboratories (ABT). Also, Abbott and AbbVie share their dividend-growth track record from their time together, meaning ABBV boasts 47 consecutive years of payout increases.
AbbVie's revenues rose 26% and adjusted EPS grew 4% during the June quarter, reflecting some revenue contribution from Allergan. In addition, the company upped its 2020 guidance and looks for 11% profit accretion from the Allergen purchase.
This is one of the most highly discounted Dividend Aristocrats at the moment. ABBV trades at less than 9 times next year's earnings estimates, which is roughly two-thirds less than its health care sector peers and a 24% to the stock's historical average.
- Market value: $10.1 billion
- Dividend yield: 5.3%
Franklin Resources (BEN, $20.40), which operates as Franklin Templeton Investments, is one of the world's largest asset managers. The firm manages approximately $1.4 trillion of assets and has subsidiaries in more than 165 countries. Franklin employs over 1,300 investment professionals worldwide and specializes in active management of equity, fixed income and alternative investments.
The company closed the purchase of rival Legg Mason in July in a deal that expands its asset base, geographic footprint, and balance between institutional and retail clients. The merger also signals that Franklin remains fully committed to active fund management, despite an industry-wide rise in index funds. The Legg Mason purchase also expands Franklin's capabilities in bond and real estate investing, areas that have traditionally proven more resilient to passive strategies.
Franklin's June-quarter adjusted profits rose 27% year-over-year, beating analyst estimates and reflecting solid momentum in the company's municipal bond and U.S. equity businesses. As a well-known active fund manager, Franklin benefitted during the quarter from growth stocks outperforming value stocks by the widest margin on record. Eight of Franklin's top 20 funds have recorded positive net inflows so far in 2020.
It's not all rosy, however. UBS (Hold) writes that "despite BEN's strong brand and balanced product offering, weak flows, the risk of stickier expenses due to a need to invest, and less likely capital returns result in a more cautious valuation."
But perhaps its valuation is too cautious. A forward P/E of less than 8 currently represents a 33% discount to financial services peers and a 36% discount to BEN's historical forward P/E. This, for a company that has raised its dividend every year since 1981.
People’s United Financial
- Market value: $4.4 billion
- Dividend yield: 6.9%
Bridgeport, Connecticut-based People's United Financial (PBCT, $10.43) is a community bank headquartered that manages more than $60 billion in assets across the American Northeast. The bank offers commercial and retail banking services through a network of over 400 branch locations across Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.
The bank's recent growth has come from acquisitions. Last year, the company announced or closed acquisitions of VAR Technology, BSB Bancorp and United Financial Bancorp. VAR provides specialized expertise in equipment financing and 25,000 new direct end-user customers, BSB expands PBCT's footprint in the Boston market, and United boosts the bank's deposit share in major areas of Connecticut and Massachusetts.
The bank's adjusted EPS for the June quarter were down 29% year-over-year due to merger-related expenses and a higher provision for loan losses, though that result still beat analysts' estimates. Period-end loans and deposits grew 3% and 12%, respectively, during the quarter as a result of $2.6 billion of loans made as part of the federal government's Paycheck Protection Program (PPP).
People's United Financial has produced above-average earnings growth for a bank averaging 8% annually over the past three years and 17% annually over the past 10. Moreover, PBCT has delivered 27 consecutive years of dividend growth.
PBCT shares are priced at a 9.5 forward P/E, which is an 18% discount to banking industry peers and a 37% discount to the bank's historic forward P/E. People's United Financial also is among the highest yielding Dividend Aristocrats.
- Market value: $209.3 billion
- Dividend yield: 7.1%
Telecom and media giant AT&T (T, $29.37) used acquisitions to transform itself from a cellphone service provider to an entertainment powerhouse. The largest of these acquisitions was Time Warner, which gave the company entertainment assets like HBO, Warner Brothers film studios and cable TV channels like CNN.
AT&T also recently joined the competition for streaming services by launching HBO Max in May, which has already attractive approximately 4.1 million subscribers.
The company is involved in talks to shed its DirecTV business, which is losing subscribers as consumers increasingly opting instead for on-demand entertainment services such as Netflix (NFLX). Insiders think the DirecTV business could fetch as much as $20 billion and accelerate the company's operational streamlining while providing a cash boost for further trimming debt.
Morgan Stanley sees the sale of DirecTV as a positive for investors and reiterated its Overweight rating (equivalent of Buy) on the Dividend Aristocrat's shares in early September.
Telecom remains the company's primary profit driver, accounting for more than half of sales and helping to stabilize earnings during the pandemic as shutdowns have hurt satellite TV and movie revenues. AT&T's overall revenues fell 9% during the June quarter and adjusted EPS declined 7%. However, the company generated $7.6 billion of free cash flow during the June quarter, trimmed another $2.3 billion from debt and reduced its ratio of net-debt-to-adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to 2.6.
"We find the risk/reward around AT&T favorable at these levels given the company's strong FCF generation, 7% dividend yield, and attractive valuation," writes Deutsche Bank. "We believe AT&T's dividend provides support for the stock price and is well covered (we estimate a 60% dividend payout ratio on $25B in 2020 FCF), which is increasingly attractive in today's historically low interest rate environment."
AT&T, which has hiked dividends 36 years in a row, trades at 9 times forward earnings estimates – a 19% discount to its own historical multiple.