As of Oct. 25, shareholders of Tata Motors Ltd. (TTM, Financial) and U.S. Steel Corp. (X, Financial) have more than one reason to feel depressed about their investments.
First, these stocks have reported losses on the market over the past several years.
Second, the company offers an underperforming yield compared to the S&P 500 Index’s yield of 1.89% (as of Friday), when a dividend is granted to the shareholders.
Third, these two stocks received moderate sell recommendation ratings from sell-side analysts on Wall Street, increasing the chances they will continue to decline on the stock market in the coming weeks.
As a result, shareholders may want to consider reducing their positions in these stocks.
Shares of Tata Motors have fallen 14% so far this year, 12% over the last 52 weeks and 76.4% over the last five years through Friday. They have underperformed the S&P 500 by 30.4%, 22.7% and 127%.
The company paid the last annual dividend on Aug. 29, 2016, a scant 1.5 cents per common share.
The Mumbai-based auto manufacturer closed at $10.49 per share on Friday for a market capitalization of $7.12 billion.
The stock has a forward price-earnings ratio of 8.03 versus the industry median of 10.14 and a price-sales ratio of 0.14 compared to the industry median of 0.56.
Tata Motors has a moderate sell recommendation rating.
GuruFocus assigned a low 3 out of 10 rating for the company's financial strength and a moderate rating of 5 out of 10 for its profitability.
Shares of U.S. Steel have declined 35.8% year to date, 53.8% over the past year and 68% over the past five years through Friday. They have underperformed the S&P 500 Index by 58.6%, 68.2% and 120%.
The quarterly dividend the Pittsburgh, Pennsylvania-based steel company paid on Sept. 10 to its shareholders was 5 cents per common share, resulting in a trailing 12-month dividend per common share of 20 cents.
Based on Friday’s closing share price, U.S. Steel’s trailing 12-month dividend yield is 1.71% compared to the industry median of 3.15%.
The trailing 12-month dividend yield is ranked lower than 216 out of 301 competitors.
The stock has a moderate sell recommnedation rating. Analysts issued an average target price of $10.75.
Shares closed at $11.71 on Friday for a market capitalization of $2 billion.
The stock has a forward price-earnings ratio of 12.58 versus the industry median of 8.31 and a price-sales ratio of 0.14 versus the industry median of 0.3.
GuruFocus issued a moderate 5 out of 10 rating for the company's financial strength and a low 3 out of 10 rating for its profitability.
Disclosure: I have no positions in any securities mentioned.
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