Best Value Stocks Right Now
The last thing on many peoples mind’s right now is value stocks. However, over the past year, value stocks are outperforming growth. Given that, I’m going to detail the best value stocks right now so you can get ahead of the trend.
For example, the iShares Russell 1000 Value ETF is leading the iShares Russell 1000 Growth ETF by 5% during this time.
Additionally, with inflation worries rising, there’s no better time to start looking for undervalued companies. With that said, let’s take a deeper look at the top value stocks to watch right now.
Best Value Stocks Right Now – Watch List
Value stocks are trading on the market at a discount compared to their measured worth. A few factors used to determine a company’s value are
- Price to Earnings (P/E)
- Price to Book (P/B)
- Enterprise Value (EV)
- And Earnings Metrics (Revenue, EPS, Dividend)
One of the best investors of all time, Warren Buffet, uses this investing style to generate returns in most economic environments. And with whispers of interest rates rising, value stocks will be the play as we advance.
#5 General Motors (NYSE: GM)
- P/E: 7.25
- P/B: 1.62
- EV: $166B
- Market Cap: $83.87B
- Dividend Yield: N/A
First on our list of the best value stocks right now is GM. The chip shortage is taking a toll on the auto industry, particularly U.S automakers GM and Ford. But, Ford is expecting to take a bigger hit than GM when it comes to production.
GM is teaming up with LG Chem to mass produce EV battery cells, which will prove to be an advantage in the future.
Despite the chip shortage, GM reported record results in the second quarter. Higher used-car prices boosted GM’s earnings. And as a result of the company’s impressive earnings, it’s raising guidance for the rest of the year.
As the chip situation improves, GM’s EV investments will start to pay off as the EV market continues to swell.
#4 CVS (NYSE: CVS)
- P/E: 16.03
- P/B: 1.58
- EV: $163.4B
- Market Cap: $185B
- Dividend Yield: 2.3%
Although retail stores took a hit when the pandemic broke, CVS Health has been a bright spot in the sector. The company stepped up to help provide Covid vaccines and testing, and it helped drive new traffic to stores.
In its Q2 earnings, CVS noted 12% of new customers chose to also fill their prescription with the company after visiting.
With low debt, a strong cash position, and growing financials, CVS makes the best value stocks right now list. Additionally, the company’s growing pharmacy segment shows customers are adopting its services. On top of this, CVS is raising its guidance for full-year results due to its strong earnings thus far.
CVS stock is up nearly 50% YTD, but it’s still down 23% from its all-time high of $113 set in 2015. When looking at EV/Sales, CVS is cheaper than it’s been the past few years.
#3 Verizon (NYSE: VZ)
- P/E: 11.11
- P/B: 3.01
- EV: $386B
- Market Cap: $217.9B
- Dividend Yield: 4.78%
Despite topping earnings estimates yet again, Verizon stock is still down 5% YTD. But, the coming 5G wave will help boost the leader’s position.
The company is increasing its quarterly dividend for the 15th straight year, showing the company is dedicated to its shareholders. On top of this, the company is also raising its expectations for the year, citing wireless revenue growth.
Currently trading at a low 11 PE, VZ stock looks like a steal at these levels. If the company continues executing its strategy, it should maintain its position as a leader in wireless technology.
Keep reading to discover more of the best value stocks right now.
#2 FedEx (NYSE: FDX)
- P/E: 12.38
- P/B: 2.54
- EV: $91.36B
- Market Cap: $61.89B
- Dividend Yield: 1.3%
Even though several factors are negatively impacting FedEx as a business, it’s still delivering. The challenging labor market and transportation costs are weighing on the company’s profitability. But, with increased demand for its services and higher yields, the company is overcoming these issues.
With that in mind, FedEx stock is down 27% from its highs in June. As the holiday season approaches, FedEx should continue seeing higher demand.
With lower expectations set, FedEx has a low bar to meet for the remainder of the year. As a result, FedEx lands on the best value stocks right now.
#1 MetLife (NYSE: MET) – Best Value Stocks Right Now
- P/E: 13.25
- P/B: .82
- EV: $80B
- Market Cap: $56.44B
- Dividend Yield: 2.88%
A leader in financial services such as annuities and insurance, MetLife is on of the best value stocks right now.
Trading at an ultra-low P/B of 0.82, MetLife stock seems to be at a discount. With that in mind, higher investment margins are boosting MetLife’s earnings. In the second quarter, the company’s Retirement & Income Solutions segment grew by 241% YOY.
At $65 per share, MetLife stock is less than 3% off its ATHs. As the baby boomer generation will all be over the age of 65 by 2030, retirement will become more of a focus.
Additionally, with $1.1 billion worth of shares purchased in Q2, the company is confident in its ability to continue growing.
Best Value Stocks Right Now – Should You Buy In?
Now that inflation is reaching certain levels, the FED is hinting interest rates may be rising sooner rather than later. When this happens, value stocks tend to outperform growth. And with that said, these are some of the top value stocks to watch to help balance out your portfolio.
Value stocks are not as exciting as growth stocks like Tesla (NASDAQ: TSLA). Yet, they are essential to help diversify your account. Suppose interest rates rise and highly leveraged companies take a hit. In that case, these are some of the top value stocks to watch to hold down your portfolio.
As we transition into unknown economic territory, it’s critical to hold a variety of different companies. For example, if you are highly concentrated in tech stocks, one event can disrupt your entire account.
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About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.