How does one find bargains in the market?
Eddy Elfenbein of Crossing Wall Street suggests that investors start by examining two factors: a stock’s dividend yield, and its amount of debt relative to equity.
Performing such a screen will generate stocks that are attractive in terms of their yield — which may hint at low valuations — but may be less risky than other high-dividend stocks, especially in an environment in which the Federal Reserve is raising interest rates.
“Basically, it gives you companies with fiscal health, and also with good valuations,” Elfenbein said Thursday on CNBC’s “Trading Nation.”
Performing this screen now brings up names such as Johnson & Johnson, BlackRock and Chevron.