It’s time, again, for our monthly stock pick and this entry will be short because there really isn’t anything left that we haven’t already said. General Motors Company (NYSE: GM) is our official choice – again. We should point out that Canadian Imperial Bank of Commerce (TSE: CM, our official pick last month) was a close second. The price of GM has been pretty stable over the last 7-8 months so there has been little capital appreciation but their dividend yield is still an attractive 4.8%. The really great thing about GM stock right now is that the P/E ratio is still exceptionally low (3.58). That’s the lowest of the over 200 stocks we follow! Their strong earnings (the EPS is 8.74) contribute to that low P/E. This means the price of the company compared to its value is very low. The only other company with EPS so much higher than their P/E is Gilead Sciences (NASDAQ: GILD). If you’re keen on capital growth, Gilead is a good choice because they are currently trading 34% lower than their 52-week high which is a great sale! Their dividend yield, however, is only 2.6% which is below our 3.5% threshold so we cannot officially recommend them.
Someday, investors will discover the value in GM and the share price should move to a more reasonable P/E. Why not buy them now and enjoy the climb in the stock price!