Top five value stocks to consider in October

Highlights

  • Value stocks are typically priced at a discounted rate than their intrinsic value.

  • Home improvement retailer Lowe's Companies, Inc. (NYSE: LOW) grew by 24% in one year. Its next ex-dividend date is Oct 19, 2021, for a dividend amount of US$0.80.
  • Oracle Corp’s (ORCL) dividend yield is 1.43%, and the stock’s one-year gain is 53%.

Value stocks are company shares that trade at a lesser price than their actual worth. These are typically undervalued stocks. Therefore, value investors buy them for long-term hold as their value increases steadily. Generally, these companies also pay dividends, but it is not a rule. 

Here we discuss five such stocks currently trading at less than their price-to-book value, and they also pay dividends, as per Refinitive data. 

Lowe's Companies, Inc. (NYSE: LOW)

Home improvement retailer Lowe’s operates in the US and Canada. The Mooresville, North Carolina-based company was founded in 1921. It had 1,973 stores as of July 30, 2021.

Lowe’s net sales were US$27.57 billion in the quarter ended July 30, 2021, compared to US$27.30 billion in the same quarter of 2020. Its net earnings were US$3.02 billion, or 10.95 percent of the revenue, compared to US$2.83 billion in the July quarter of 2020. The earnings per diluted share increased to US$4.25 against US$3.74 for the same duration last year. 

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Lowe’s market cap is US$140.7 billion, with a P/E ratio of 20.97. The company pays an annualized dividend of US$3.20, with a dividend yield of 1.56 percent.

Its ex-dividend date is Oct 19, 2021, for a dividend amount of US$0.80 per share.

The company’s revenue has been constantly increasing for the last five years. The stock closed at US$204.27 on Oct 5, with a share volume of 3,483,142. It grew 24 percent in one year.

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Top value stocks: Lowe's Companies, Inc. (NYSE: LOW), Oracle Corporation Common Stock (ORCL)

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Oracle Corporation (ORCL)

The technology company provides enterprise resource planning and database technology. It was founded in 1977. 

The Austin, Texas-based company reported revenue of US$9.73 billion for the three months ended August 31, 2021, compared to US$9.38 billion for the same quarter a year ago.

Its net income increased to US$2.46 billion compared to US$2.25 billion in the previous year’s August quarter. Oracle’s earnings per share diluted increased to US$0.86 compared to US$0.72 in the August quarter of 2020. 

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The company has a market capitalization of US$248 billion and a P/E ratio of 19.27. Its forward P/E for one year is 22.53. The dividend yield and annualized dividend are 1.43 percent and US$1.28, respectively.

The company is expected to pay dividends to shareholders on Oct 26. The ex-dividend date is Oct 8, 2021. According to a recent World Economic Forum survey, 85 percent of financial institutions use AI but not to their full potential. Following that report, on Oct 4, Oracle announced to add AI Governance to its Oracle Financial Service Compliance Studio app.  

On Oct 5, the stock closed at US$91.49, with a trading volume of 9,788,585.

Its revenue decreased in FY 2020 on a YoY basis but increased by 4 percent in FY 2021 YoY. Its one-year share price gain is 53 percent.

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MSCI Inc (NYSE: MSCI)

The New York-based MSCI is a well-known name in the stock market. MSCI’s index segment is the most profitable division. Its other assets include analytics, ESG, Climate Lab, etc.

The company plans to declare its Q3 results on Oct 26, 2021.

For the quarter ended June 30, 2021, the company posted revenue and net income of US$498 million and US$165 million, respectively. The revenue and net income for the June quarter of 2020 were US$410 million and US$115 million, respectively. Its EPS diluted rose to US$1.99 in the June quarter of 2021 from US$1.36 in the year-ago period. 

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On Oct 5, the company announced to launch the MSCI Climate Lab, an application to monitor and manage climate-related activities and the company’s financial risks at the enterprise level.

MSCI’s P/E ratio is 71.21, forward P/E for one year is 61.76, the dividend yield is 0.71 percent, and the annualized dividend is US$4.16. The company’s current market cap is US$49.19 billion. 

Its operating revenue has been increasing continuously since 2016.  The stock closed at US$602.12 with a share volume of 301,487 on Oct 5, 2021. It rose 76 percent in one year.

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Top value stocks: MSCI Inc (NYSE: MSCI), HCA Healthcare, Inc. (NYSE: HCA), Motorola Solutions, Inc. (NYSE: MSI)

Source - pixabay


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HCA Healthcare, Inc. (NYSE: HCA)

HCA is a holding company headquartered in Nashville, Tennessee. It runs hospitals through its affiliates. HCA’s facilities are available in 20 states. As of June 30, it owned and operated 187 hospitals, 122 freestanding surgery facilities, and 21 freestanding endoscopy centers.

For the quarter ended June 30, 2021, the company posted revenue and net income of US$14.4 billion and US$1.45 billion, respectively. The revenue for the June quarter of 2020 was US$11.1 billion, and net income was US$1.08 billion. The EPS diluted increased to US$4.36 from US$3.16 in the same period of the previous year. 

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On Sep 28, the company announced the appointment of Michael R. McAlevey as its new senior vice president and chief legal officer. He will join the company next year.

HCA has a P/E ratio of 16.41 and a forward P/E one year of 14.39. 

With a dividend yield of 0.79 percent and an annualized dividend of US$1.92, the company holds a market cap of US$76.59 billion. The stock closed at US$243.11, with a trading volume of 1,396,127 on Oct 5, 2021. Its one-year stock price return is about to 86 percent.  

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Motorola Solutions, Inc. (NYSE: MSI)

This communication and analytics provider company is based in Chicago, Illinois. 

MSI posted net earnings of US$293 million on net sales of US$1.97 billion for the quarter ended July 3, 2021. The net earnings were US$135 million on net sales of US$1.62 billion for the quarter ended June 27, 2020. The EPS diluted increased to US$1.69 compared to US$0.78 for the same period in the previous year. 

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Its market capitalization is US$39.48 billion. Its P/E ratio is 35.06, and forward P/E for one year is 28.09. The dividend yield is 1.23 percent and annualized dividend is US$2.84.

The stock closed at US$232.27 on Oct 5, 2021, with a share volume of 646,344. The stock gained around 48 percent in one year. 

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Bottomline

Typically, a value stock is a company share traded at a discounted rate than its actual worth. These stocks have strong financial and management fundamentals, which make them grow steadily. However, investors must apply due diligence while investing in the stock market.

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