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. This definition of course begs the question: Why wouldn’t investors only buy value stocks?
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. Of course, that doesn’t mean these names can’t generate big profits, and many of the names on this list have already begun moving. Here’s a look at 10 stocks that can still be considered values in today’s market.
- Stock price as of Oct. 5: $55.04
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 as consumers continue to struggle with financial challenges stemming from the pandemic. Zack’s current rating for RCII is “hold,” but it noted on Oct. 4 that the stock has “strong value characteristics.”
Group 1 Automotive (GPI)
- Stock price as of Oct. 5: $188.84
Group 1 Automotive operates car dealerships, franchises and collision centers in the U.S., U.K. and Brazil, and it’s been on a buying spree, completing $570 million of acquired revenues so far this year. The company announced in September that it would purchase the assets, including 30 stores, of Prime Automotive Group, significantly growing its Northeast U.S. market share. And this week, it announced the acquisition of two dealerships in the Dallas-Fort Worth market, where it currently operates 10 dealerships, according to a press release. With a P/E ratio of 6.70 and the stock up 85.14% over last year, Group 1 Automotive appears to have plenty of room for continued growth as demand for new and used cars increases.
- Stock price as of Oct. 5: $29.72
Honda announced earlier this year that it would enter the electric vehicle market, with plans to partner with General Motors to produce two vehicles before venturing off to manufacture its own. The move positions the company to be a significant force in the growing EV market. The stock has gained over 25% since last year, and dividends sit at a robust 3.34%. Zacks rates Honda a “strong buy,” and analyst forecasts reported by CNN Business estimate a median target price of $38.14 within a range of $33.35% to $45.10.
Carrier Global Corp. (CARR)
- Stock price as of Oct. 5: $52.82
Carrier is the leading provider of HVAC, refrigeration and fire and safety solutions, encompassing over 80 brands and introducing over 100 new products per year for the last six years. The company made a strong second-quarter showing, with 37% revenue growth and stock valued at 23.1 times forward earnings, as reported by U.S. News. Demand was strong over the summer, which bodes well for third-quarter results. The stock has a consensus “buy” rating among 22 analysts polled by CNN Business, with a median price target of $60.
CVS Health (CVS)
- Stock price as of Oct. 5: $83.64
CVS Health is a “boring” retailer/pharmaceutical stock with a pedestrian 15x P/E ratio and an attractive 2.39% dividend yield. Analysts have a “buy” rating on the stock with a median price target of $97.15, about 16% above current levels. In one sense, investors can rely on CVS being a defensive stock, as consumers will always need drugs and healthcare products in any type of economy. However, CVS is also trying to position itself as a pharmaceutical leader in a changing landscape — an effort that could accelerate as CVS nears its Nov. 3 earnings release.
NRG Energy (NRG)
- Stock price as of Oct. 5: $40.90
As a utility with a forward P/E of 9.37 and a 3.18% dividend yield, NRG Energy is clearly categorized as a value stock. After trading down a few percentage points in 2019 and in 2020, the stock slid a bit but is now up 8.92% year to date. The company is turning its focus toward more futuristic power technologies, and it has room to grow. For example, right now NRG’s portfolio consists of just 1% renewable energy. 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.
American Tower Corp. (AMT)
- Stock price as of Oct. 5: $264.55
American Tower Corp. is a name that may not be familiar to a ton of 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 continues to expand its wireless infrastructure as demand continues to soar. American Tower stock is up nearly 18% year to date, and analysts see it continuing to rise. The median price target among analysts polled by CNN Business is $311, representing a 17.50% rise from current levels. The stock also pays a hefty 1.92% dividend yield, helping to keep it in the “value” camp.
- Stock price as of Oct. 5: $125.40
T-Mobile is America’s third-largest wireless carrier following its recent merger with Sprint. Over the next six 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, and coupled with strong financials in the first half of the year, they point to T-Mobile’s status as a solid value stock. A median price target of $170, based on a range of $129 to $250, supports analysts’ overwhelming “buy” consensus.
Exxon Mobil Corp. (XOM)
- Stock price as of Oct. 5: $61.62
Big oil companies are prototypical value stocks, as they generally trade at low multiples and pay high dividends. But ExxonMobil is on the move as economic recovery progresses and winter approaches, both of which should boost demand for oil and gas products from businesses and consumers alike. The lumbering oil giant has actually put on its track shoes thus far in 2021, jumping 49.49% year to date. However, there is still a ton of value at XOM, as it remains down about 40% over the past five years and pays a hefty 5.65% dividend.
Crown Holdings (CCK)
- Stock price as of Oct. 5: $101.73
Analysts are bullish on Crown Holdings, with a consensus “buy” rating and a median price target of $131.50, about 29% above its Oct. 5 close. The stock has seen a year-over-year gain of 29.36, and its P/E sits at a reasonable 20.62. Crown Holdings is a leader in packaging for consumer goods, particularly metal packaging, with operations in 47 countries and net sales of $11.6 billion. With the global economy reopening as the coronavirus recedes, demand for Crown Holdings’ products should similarly rise.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Oct. 5, 2021, unless otherwise noted, and subject to change.
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- Zacks. 2021. "Top Ranked Value Stocks to Buy for October 4th."
- Zacks. 2021. "CVS Health (CVS) Stock Moves -0.31%: What You Should Know."
- Investor's Business Daily. 2021. "Honda Stock In Buy Zone As Auto Giant Makes Key EV Shift; Stellantis To Hold EV Day."
- NRG Energy. "Powering modern life while protecting our planet."
- Group 1 Automotive. 2021. "Group 1 Automotive Announces Acquisition of Prime Automotive Group Dealerships."
- Group 1 Automotive. 2021. "Group 1 Automotive Announces Acquisition of Two Dealerships in Texas."