10 Value Stocks To Invest In Now
A value stock is one that seems to be undervalued based on a combination of factors, such as its valuation history, current stock price, dividend yield, dominant market share and others. Of course, this definition begs the question: Why wouldn’t investors only buy value stocks?
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The reason is that so-called “value stocks” aren’t generally newsmakers — some would even classify them as “boring.” Think about the stocks you hear on the financial news all day; typically, they are the exciting, high-flying stocks like Tesla and GameStop that make huge moves. Tesla, for example, gained over 700% in 2020, while GameStop popped over 400% in a single week in early 2021.
Meanwhile, oil and gas companies, utilities and other more traditional companies tend to lumber along under the radar. But that doesn’t mean these names can’t generate big profits. Here’s a look at 10 stocks that can be considered values in today’s market.
1. Rent-A-Center Inc. (RCII)
Stock price as of Sept. 29: $22.33
Rent-A-Center leases furniture, appliances and electronics to consumers across a network of over 2,000 stores and offers pay later and rent-to-own options. The retailer’s recent acquisition of Acima Holdings, which provides rent-to-own financing at over 15,000 retail stores, should enable Rent-A-Center to expand its partner base. In its first-quarter 2022 earnings report, Rent-A-Center attributed the acquisition to a 31% year-over-year increase in revenue. In the second quarter, earnings and revenue both increased again, beating Zacks Investment Research estimates for the third time in four quarters.
Analysts reported by Yahoo Finance rate the stock a 1.9 on a scale of 1 (strong buy) to 5 (sell). The average price target is $43.50 in a range of $30 to $72, which is unchanged since last month but suggests the $22.33 price as of Sept. 29 still represents an opportunity to buy a dip.
2. M&T Bank Corp. (MTB)
Stock price as of Sept. 29: $174.84
M&T Bank Corp. is a holding company for M&T Bank, which ranks in the top 20 among U.S. full-service commercial banks. Its operating segments include business banking, commercial banking and real estate, residential mortgage and retail banking, but M&T also provides trust and wealth management, institutional brokerage and securities and investment management services. The financial institution’s stock suffered last year, as did many other bank stocks. However, interest rates are rising, and bank profits are likely to follow.
MTB is up almost 14% so far this year and just over 14% over the past year — performance that compares favorably to the Dow Jones U.S. Banks Index, which is down 26.54% for the past year. M&T’s price-earnings ratio is 16.58, and the stock pays a 2.68% dividend yield.
3. Qualcomm Inc. (QCOM)
Stock price as of Sept. 29: $114.84
Qualcomm is a major player in the wireless and patent management industries, with interests in 5G and chipsets, among other technologies. Despite supply chain bottlenecks and shortages, Qualcomm stock held its own until prices dipped at the beginning of the year. Looking forward, Qualcomm CEO Cristiano Amon told Fox Business he expects more balance between demand and supply in the second half of the year, and a gradual easing of the crisis after that, allowing Qualcomm to ramp up production.
With the stock trading near its 52-week low and its P/E ratio sitting at 10.15, Qualcomm stock is a solid value. Analyst price targets range from $130 to $289.38, with predictions averaging $183.95. Those estimates are consistent with last month’s. KeyBanc is bullish on the stock following a conversation with Qualcomm management, citing the likely success of the company’s expansion into non-phone markets, Barron’s reported.
4. Meta Platforms Inc. (META)
Stock price as of Sept. 29: $136.41
Meta, formerly known as Facebook, has taken a beating this year, and shares are trading near their lowest price in over two years. However, despite vulnerabilities such as privacy issues, some believe the recent sell-off is unwarranted because of Meta’s unrivaled dominance as a market leader, Seeking Alpha reported.
Over 3.5 billion people, representing 47% of the world’s population, use a Meta social media platform at least once a month, according to Statista. Analysts rate META a “buy” and predict an average price target of $224.29, which is a downgrade compared to last month but still well above the stock’s closing price of $136.41 on Sept. 29.
5. CVS Health Corp. (CVS)
Stock price as of Sept. 29: $96.98
CVS Health is a “boring” retailer/pharmaceutical stock with a pedestrian 15.85 P/E ratio and an attractive 2.24% dividend yield. Analysts have a consensus “buy” rating on the stock with an average price target of $120.57, about 24% above the current share price.
In one sense, investors can rely on CVS being a defensive stock. Consumers will always need drugs and healthcare products and services in any type of economy, and CVS delivers on many fronts. CEO Karen S. Lynch credits the company’s diverse offerings with driving strong revenue last quarter that prompted CVS to increase its earnings guidance for the year. Analysts rate the stock a “buy” and have an average price target of $120.57.
A $10 billion stock buyback CVS has in store could boost prices. However, CVS has a lot riding on its recent acquisition of Aetna and launch of Aetna Virtual Primary Care practices, and it faces competition from Amazon.
6. NRG Energy Inc. (NRG)
Stock price as of Sept. 29: $39.18
As a utility with a P/E ratio of 2.76 and a 3.45% dividend yield, NRG Energy is clearly categorized as a value stock. NRG is turning its focus toward more futuristic power technologies, and it has room to grow.
The stock was on the rise following NRG’s Aug. 4 earnings release, where the company reported earnings and revenue that beat Wall Street estimates. Analysts reported by Yahoo Finance give the stock a “buy” rating and an average price target of $44.36, a slight increase since August, and a high target of $52, which is unchanged since August.
As the Biden administration pushes forward on its green energy and infrastructure priorities, companies like NRG may be able to expand their reach into new technologies.
7. American Tower Corp. (AMT)
Stock price as of Sept. 29: $213.72
American Tower Corp. is a real estate investment trust that may not be familiar to casual investors, but it’s been printing money as 5G technology is just beginning to take root across the globe. American Tower has the largest portfolio of broadcast towers in the U.S. and is expanding its wireless infrastructure as demand soars.
American Tower stock, like the market overall, has been volatile this year, but analysts see it making solid gains. The average price target among analysts polled by Yahoo Finance is $299.44, 40% above the current price. The stock also pays a 2.66% dividend yield, helping to keep it in the “value” camp.
8. T-Mobile US Inc. (TMUS)
Stock price as of Sept. 29: $134.64
T-Mobile is America’s third-largest wireless carrier following its 2020 merger with Sprint. Over the next several years, T-Mobile expects to expand its network capacity and speed by 14 and 15 times, respectively, and provide 5G service to 99% of Americans.
These are lofty goals, to be sure, but the company had its strongest year ever in 2021 and achieved industry-leading momentum in wireless, according to a statement accompanying its earnings release for the fourth quarter.
On June 21, the company announced it had reached an agreement with Dish to give its customers access to T-Mobile’s 5G network, resulting in what T-Mobile Chief Marketing Officer Mike Katz said is a “multibillion-dollar revenue commitment for our business.” It’s also partnering with SpaceX to provide cell coverage across the U.S., including to remote locations where signals tend to fail, according to Zacks.
An average price target of $174.27 supports analysts’ “strong buy” consensus.
9. Exxon Mobil Corp. (XOM)
Stock price as of Sept. 29: $88.68
Big oil companies are prototypical value stocks, as they generally trade at low multiples and pay high dividends. But ExxonMobil was already on the move when winter set in last year, and the momentum has continued amid the ban on Russian oil due to that country’s invasion of Ukraine, albeit with a few hiccups.
Oil and gas prices hit multiyear highs in March, and gas prices hit an all-time high in June, boosting earnings across the energy industry. ExxonMobil’s stock is up almost 45% since the beginning of the year and is paying a hefty 4.10% dividend.
10. Camping World Holdings Inc. (CWH)
Stock price as of Sept. 29: $24.68
Investors with an appetite for risk might consider Camping World as a long-term investment. While much of the COVID-19 fear that drove travelers to RVs has faded, high airfares and rampant flight cancellations could keep demand high for the foreseeable future.
Analysts are bullish on the oft-maligned stock, giving it a “buy” rating and predicting an average price target of $33.75.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Sept. 29, 2022, and is subject to change.
This article originally appeared on GOBankingRates.com: 10 Value Stocks To Invest In Now
