Ally Financial Stock pick of the day #investment #passiveincome #stockmarket #investing #stocks

welcome everyone to vested interest this is Shane back again for another stock pick of the day video it is September 10th we are going to take a look at one in my portfolio we don't look at a lot of them in my portfolio I like to get through uh most of them at least you know once every six or seven months or so we haven't taken a look at Ali Ali bank is the bank that I use it's also in my portfolio so we will review this one today out of the financial sector and if you are new to the channel or you have not done so go a and hit that thumbs up button down below if you find any value in the content make sure you are subscribed to the channel join us on this journey to Financial Freedom make sure you click that subscribe button down below click the notification Bell so you're notified whenever we put out any new content I do the stock pick of the day video series Monday through Friday or Monday through Thursday whenever the stock market is open uh if the Market's closed I do not cover them here uh last week we did not cover Mondays because we had the day off uh a national holiday there so we didn't cover one there I also do subscriber suggestions or viewer suggestions so if you have a company like Ally You' like me to cover in the stock Pi of the day series go ahead and drop it down in the comment section below I'll work it into the rotation really appreciate all the subscribers out there the channel continues to grow because of people like you you guys are awesome so very special thank you to everyone out there who has taken a time to watch comment and like the videos and a special thanks again to the subscribers you guys are awesome now the vested interest stock screener this is how we are going to run through the video we will utilize this screener at the end to see how this one Stacks up this is also how I look at a company on a high level out of the thousands of companies out there to invest uh it gives me kind of a a quick look at a company to see if I'm interested in doing more of a deep dive into the financials and in this one specifically because it is in my portfolio it is a way to back check that it still meets some of the initial screener that I set up and if it doesn't typically what I do is I look back at the financials do a deeper dive into the financials just as I would if I was reviewing any other company to buy or reviewing a company to make sure it still meets the stand standards that I set so that's the idea behind this screener and it is just that it is an initial screener it does not mean that I am buying or selling depending on where it's at it just means that it either makes it onto my watch list or if it's a company like Ally that's already in my uh portfolio do I need to do more of a deep dive into the company is it potentially in danger of no longer meeting the criteria that I set and should it possibly be removed from the portfolio that's what this initial screener is for if it makes the screener I do more of a deep dive into the finial to the company looking at stuff like the margins are they growing over time what is the peg ratios what is it compared to other companies in the same sector in the same industry uh what does their revenue look like is it growing over time uh what is their assets over liabilities do they have more assets over liabilities enough to if they had to sell off some assets to pay down uh the liabilities and debt is their debt growing or decreasing a lot of other information you should be looking at at the balance sheet and income statements with these companies so again just initial screener here that is what this is you can tweak this to your liking don't blindly copy my screener or anyone else or investing criteria that anyone else might have uh on YouTube or any other uh any other Avenue now back to Ally check them out at www. ali.com that's www.all.com that is their homepage where I pull this information from and this is a bank doing it right is the core of who we are we're making banking smarter and simpler while serving our communities we value encourage the Mantra of working Better Together our commitment to our customers has been at the core of who we are for 100 years this includes connecting with our communities and this is an online bank they don't have any locations that I know of uh so it's all online and they do offer you know auto loans banking you know regular savings checking uh I do my investing through them so you do have the ability to create a portfolio uh and do your investing Corporate Finance credit cards everything that a bank you know home uh Home Loans everything that a bank personal loans everything that a bank does Ally Bank does as well now the reason we are taking a look at them huge drop on the day 17.62% down on the day that is a huge drop for a year let alone in one day uh so something's going on here that's part of the reason why we're looking them we are talking about Ally Financial ticker all y out of the financial sector closed out the day at $32 67 it actually looks like they're down a little bit more in the after hours 52e range as low as $225 as high as $454 so they are floating between their 52e high and their 52 we low not within 15% of a 52 we low there market cap of 9954 billion a beta of 1.39 so they are more volatile than the overall Market here you can see that volatility throughout the day looks like they actually started out the day uh on a good note and then boom right down they go tried recover a little bit and then down further maybe try to recover a little bit towards the end of the trading day PE ratio price earnings $148 per share but for these companies Banks specifically we should not be looking at PE we should be looking at Price to Book we'll do that here in a second EPS earnings per share is sitting at $232 per share they do have an earnings date coming up sometime between October 16th and October 21st for dividend is $120 that's an annual payment there they do pay out quarterly so divide by for though we'll see that here in a little bit nice starting dividend yield on this one at 3.03% I actually have a locked in uh yield on cost at 4.6 almost 4.7% so that tells you how and you'll see my position here in a little bit how long ago I was buying them and how much cheaper even cheaper than they are even with this 177% uh drop on this one X dividend date August 1st so their X dividend date was last month looks like they paid out on the 15th I remember getting my dividends there so you would be in line for the next payout though you're going to have to wait a few months months here one-ear Target estimate at least according to Yahoo finance $45.65 per share so that does speak to some upside as far as price appreciation on this one and would put them close to where they uh where they were at their 52e High slightly over that and back to where they were before the 17.62% drop jumping over to the right we're going to take a look at dividend yield theorum see if this one is potentially undervalued to do that we compare their 5-year dividend yield average at 3.05% to their current 3.03% over here says forward same number 3.03% and since it is lower than their 5year average that speaks to overvaluation and these are pretty close you know you could almost say pretty close to fairly valued but just slightly a tick overv valued according to dividend yield Theory payout ratio is low at 5.72% so their dividend is not in danger of being cut they have plenty of room to continue to increase this dividend and they aren't you'll see that here in a little bit they did stopped their increases a while back in 2021 but we'll talk about that in a little bit Price to Book again I like One for banks fair value less than one undervalued over one overvalued so current 1.05% would be slightly overvalued very similar to divid and yield theory that says they're slightly overvalued Price to Book says they are ever so slightly overvalued as well again one being fair value so 1.05 is just a tick over that not a lot but just enough to make them slightly overvalued you could have been getting this undervalued here back in September and June of last year you can see that at 72 that would be undervalued 2023 there in December very close at 1.01 but right now at 1.05 just a slightly uh same as dividend y Theory says slightly overvalued on this one going back to 2021 you can see 1 billion in free cash flow here 2022 up to 2.7 billion 2023 down to 1.9 trailing 12 months so far 1.69 uh so their their free cash flow is kind of up and down you know like I said 202 being a bad year in the negative and they are repurchasing their own shares very significant repurchase here back in 2021 may have been part of the reason they were in the negative negative -4.7 billion 2022 keeping that up at 1.6 looks like they're backing off in 2023 to 33 million and so far in trailing 12 months looks like it's going to be a very similar year to 2023 at 34 million but again we'll have to wait and see how the rest of 2024 shakes out the trailing 12 months would include part of 2023 numbers now I always recommend more than one source so the previous Source was Yahoo finance this one is stock analysis.com and I always recommend the two sources so you can make sure the information you're are getting is accurate and up to date and as you can see this price Target was last updated on July 18th that's what I mean sometimes these companies uh Stock analysis.com Yahoo finance you know all the different companies out there uh that you can go to Seeking Alpha many many other ones out there and you can pick any sources that you like just make sure you're not just blindly Trust trusting One Source CU again sometimes they're outdated information sometimes uh it's just wrong right sometimes they get it wrong but this was last updated in July so that's a couple months back but they did call it a consensus buy back then they have a low estimate of $31 which would be a 5.11 per uh decrease from where it currently sits average estimate of $42.6 would be a 30.43% increase from where it currently sits uh which is a little bit lower with than what Yahoo finance had at on at $46 and then if it happen to hit their high of $51 that would be a 56.1 one% increase all the while you could lock in that just over 3% dividend yield that they currently are paying out now I like to jump into statistics look up return on invested capital and return on Equity to see how well a company is reinvesting its capital I like 10% are better for these metrics return on Equity is low 6.02% that's not good a little lower than I like and return on invested capital is non-existent they don't even list it so I don't like that now EPS growth forecasted over the next 5 years I like 5% or better growth projected they're sitting at 16.33% so that does beat the metrics that I'm looking for there now let's jump over to dividend history before we do that we will look at my position again I do have uh position in Ally I am long this position 238.9 1771 shares I am up even with the drop today 26.5 n% uh so I have 6,16 $65 into the position it's currently worth $7,850 I am up 1,600 bucks like I said even with the drop today I'm still up significantly and I locked in a very high uh dividend yield on this one at 4.6 almost 4.7% now as I said earlier they are not growing they are a quarterly payer low payout ratio 51.7 dividend growth non-existence uh since 2021 their last payment in 2021 they have held at 30 cents per share that's where they sit today they do pay out on the February May August November time frame uh so I do like that but again I would like them to start increasing this dividend again uh and maybe they thought they were going to run into some trouble maybe that's why they they stopped it now let's get back over to the screener and see how well this one Stacks up and it doesn't look like a whole lot of check mark so that is not good understand the business yep that's where we started growing free cash flow up and down a little bit no check there does not have a growing dividend like I said back in uh 2021 that November payment whenever they jumped it up to 30 cents that's where it's been sitting ever since that's the last time they raised it uh dividend pay it ratio under 75% yes it's around 50% so a check there dividend yield Theory says it's slightly overvalued no check there it is not within 15% of a 52e low it is not under my cost basis no check return on invested Capital return on Equity are not over 10% earnings per share growth was better than 5% so a check there and Price to Book says they are just slightly over valued so no check there so one two three three checks is all they got that does not meet six of nine this is one I need to do more of a deep dive into the financials of the company make sure this one is not in jeopardy of uh being cut out of the portfolio because it no longer meets the criteria but again I need to look at its financials to really understand what's going on here and probably do a little bit more research and find out why they dropped uh so much today 17% drop on the day there's got to either negative news uh or something's going on with the company overall well as always appreciate you stopping by if you haven't done so already don't forget to show me some love hit that Thumbs Up Ring the notification Bell most importantly subscribe to the channel join us on this journey to Financial Freedom join the bested interest Community drop a comment down below let me know you think of Ally is it in your portfolio is it one you're watching is it one you're selling maybe you're part of the 177% drop today maybe you're bailing out of the position I do personally read and respond to the comments I am always interested to read your questions opinions or suggestions for future topics so again I do do viewer suggestions so if you have a company like Ally you'd like me to cover in the stock pick of the day series drop it down below I'll work in the rotation and this is Shane signing off wishing peace and prosperity to you and yours and remember Financial Security comes to those of takea vested interest hey thanks for stopping by thanks for tuning in I hope you have a great day and we will see you in the next one I'm not a financial advisor nothing this presentation should be considered Financial advice I'm only sharing my opinion and investing Journey for educational and entertainment Pur invest R can Mage Reven and any amount you're not Comfort losing always your own research invest basing your situation circumstances and select criteria or SE the advice and Council of a certified financial advisor