Value stocks are stocks trading lower than their financial fundamentals suggest. They are perceived as undervalued, and have the potential to rise. Many new tech stocks, for instance, start out as growth stocks and transition into value stocks.
They have a low price-to-earnings and price-to-book ratios—which is why they’re less expensive than growth stocks. Due to this fundamental distinction, a value stock is often traded at a more affordable rate than a growth stock.
To investors, they see companies that fall into this category as undervalued. These investors are less likely to invest in a growth stock because they feel that value company’s stock will eventually reach their full potential once they are recognized by the market.
Generally speaking, the climb is steady for value stocks. The only other way for it to emerge into the market like a growth stock is for it to be a bit more innovative with its products or services.
Pat McKeough is an expert at delving into a company’s financial statements and identifying undervalued securities and value stocks. That’s because value stocks are the foundation of any long term investment strategy, at TSI Network we also recommend our three-part Successful Investor strategy:
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
- Downplay or avoid stocks in the broker/media limelight.
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WYNDHAM HOTELS & RESORTS INC. $49 (New York symbol WH; Cyclical-Growth Payer Portfolio, Consumer sector; Shares o/s: 97.9 million; Market cap: $4.8 billion; Divd. yield: 2.4%; Divd. Sustainability Rating: Above Average, www.wyndhamhotels.com) is the world’s largest hotel franchiser with 9,157 hotels spread across 80 countries.
On June 1, 2018, Wyndham Worldwide (old New York symbol WYN) spun off Wyndham Hotels....
LEON’S FURNITURE LTD. $15 (Toronto symbol LNF; High-Growth Payer Portfolio, Consumer sector; s/o: 76.2 million; Market cap: $1.1 billion; Dividend yield: 3.7%; Dividend Sustainability Rating: Above Average; www.leons.ca) sells furniture and appliances though 303 stores across Canada, mainly under the Leon’s and Brick banners.
The company last raised its quarterly dividend with the October 2018 payment....
FINNING INTERNATIONAL INC. $23 (Toronto symbol FTT; Cyclical-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 164.6 million; Market cap: $3.8 billion; Dividend yield: 3.5%; Dividend Sustainability Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South America and the U.K.
Starting with the March 2018 payment, Finning raised its quarterly dividend by 5.2%....
CANON INC. ADRs $29 (www.canon.com) is a leading maker of office equipment, mainly printers and copiers. Its other products include digital cameras and parts for TVs and medical gear. Canon’s revenue fell 1.4%, to $35.6 billion in 2018 from $36.1 billion in 2017....
MCKESSON CORP. $116 (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 191.8 million; Market cap: $22.2 billion; Price-to-sales ratio: 0.1; Dividend yield 1.3%; TSINetwork Rating: Above Average; www.mckesson.com) is the largest wholesale drug distributor in the U.S....
HEWLETT-PACKARD ENTERPRISE CO. $15 (New York symbol HPE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares o/s: 1.4 billion; Market cap: $21.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.0%; TSINetwork Rating: Average; www.hpe.com) sells computing services and products, such as servers and analytics software, to businesses and governments.
The company’s earnings in its fiscal 2019 first quarter, ended January 31, 2019, rose 13.5%, to $590 million from $520 million a year earlier....
For the fiscal 2019 second quarter, ended December 31, 2018, sales rose 13.2%, to $505.5 million from $446.4 million a year earlier....
GENERAL ELECTRIC CO. $10 (New York symbol GE; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 8.7 billion; Market cap: $87.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 0.4%; TSINetwork Rating: Average; www.ge.com) continues to make progress with its plan to focus on three main businesses: aviation products, electrical power equipment, and renewable power equipment.
As part of that strategy, it will merge its locomotive business with Wabtec Corp....