5 value stocks you can buy in September 2021

Highlights 

  • Most of experienced investors consider value investing as an ideal investment strategy for long term investment.
  • Due to some short-term market conditions like macroeconomic factors, average quarterly earnings, many stocks trade below their intrinsic value.

Stocks trading below the value they ought to be based on their fundamentals or simply called intrinsic value are considered as value stocks. The intrinsic value of the stock is derived using various valuation methods to determine overvalued and undervalued stock. Some investors select undervalued stocks in their portfolios as these stocks tend to have a potential upside.  

In the long run, the company’s stock price could easily reach its intrinsic value, though due to some short-term market conditions like macroeconomic factors, average quarterly earnings, cyclical nature of the sector, and many other factors, they trade lower than the intrinsic value. Most of the experienced investors consider this as an ideal investment opportunity and grab the opportunity as value investing by selecting companies with solid fundamentals trading at lower prices. 

Let us look at 5 FTSE listed value stocks that could be an ideal investment opportunity:

Ashtead Group Plc (LON: AHT)

The company operates in the equipment rental business. It rents various types of construction and industrial equipment to different clients. The company has its main operations in the UK, US and Canada.

The company generated a revenue of £1,271 million, a rise of 23% (Q4 FY2020 Revenue: £1,125 million) in the fourth quarter ended 30 April 2021. The company EBITDA stands at £552 million. The company has a positive outlook and entered a new financial year with a clear momentum and strong position. The company expects a 6-9% rise in group rental revenue in the new financial year and a free cash flow of £600-800 million. The company has declared a total dividend of 42.15p per share for the year, including a final dividend of 35p per share to be paid on 21 September 2021.   

Ashtead Group Plc’s current market cap stands at £25,121 million as of 31 August 2021. The P/E of the company stood at 36.55x, and Dividend yield was 0.74%. The company has a profit margin of 13.86%.

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Pearson Plc (LON: PSON)

The company is one of the prominent firms in education and learning technologies. The company provides services to the government, educational institutions and other corporates.

The company reported a 17% rise in revenue at £1,597 million, driven by strong growth in US virtual schools, courseware. Apart from this the company posted an adjusted operating profit of £127 million during the first half of 2021. The company has reported a significant recovery in profits compared to a loss of £23 million reported in the same period last year. Also, it expects the second half operating profits to be in line with the current market expectations. The company announced a final dividend of 6.3p per share payable on 20 September 2021.

Pearson Plc’s current market cap stands at £5,803 million as of 31 August 2021. The P/E of the company stood at 20.74x, and the dividend yield was 2.57%. The company has a profit margin of 7.97%

Aviva Plc (LON: AV.)

The company offers various insurance and savings products to individuals and companies.

The Group reported an adjusted operating profit before tax of £1,132 million in the first half of 2021. Also, the company announced an interim dividend of 7.35p per share. Aviva Plc has also started its share buyback program of £750 million, which is due to be completed by 17 February 2022.

Aviva Plc’s current market cap stands at £16,095 million as of 31 August 2021. The P/E of the company stood at 9.22x, and the dividend yield was 4.97%. The company has a profit margin of 5.32%

Redrow Plc (LON: RDW)

FTSE250 listed company operates in housebuilding activities in the United Kingdom.

The company expects substantial revenue and operating margin due to strong demand in the UK housing market. As a result, the company expects to generate revenue of £1.94 billion for the financial year ended 27 June 2021. Also, the total order stands at £1.43 billion as of 27 June 2021. The company delivered a total of 5,620 homes during the period.

Redrow Plc’s current market cap stands at £2,466.04 million as of 31 August 2021. The P/E of the company stood at 19.28x, and the dividend yield was of 0.85%. The company has a profit margin of 8.34%.

Related Read: 5 Value Stocks on LSE to Watch for Amid Economic Recovery After Covid-19

PayPoint Plc (LON: PAY)

The company provides payment processing services to individuals and businesses in the United Kingdom and other countries.

The company reported total group revenue of £28.1 million in the three months ended 30 June 2021, mainly due to higher revenue contribution from the Merchant Rentals and RSM 2000 acquisitions. The company has declared a final dividend of 16.6p per share which will be paid in two equal instalments of 8.3p per share to eligible shareholders.

PayPoint Plc’s current market cap stands at £479.64 million as of 31 August 2021. The P/E of the company stood at 32.42x and the dividend yield was 4.53%. The company has a profit margin of 16.85%.

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