With the global economy still volatile and the disappointing Q2 earnings season so far crumbling market sentiments, it can be a tricky time for investors to make profitable investment decisions.
Though around 70% of the S&P 500 companies reported so far have delivered positive earnings surprises, revenues reflected weakness. With S&P 500 index returning merely 2% last month, investors may feel apprehensive about venturing into the arena of growth stocks.
Where should investors put their money, then? It may be a cliché, but it would be safest to adopt the old school way of investing in stocks that provide steady income in the form of regular dividends. While betting on undervalued stocks could be a right strategy in this situation, one may end up falling in a value trap if the low price multiples are justified with weak fundamentals.
Therefore, we have selected value stocks with a favorable Zacks Rank, which indicates that these stocks have been witnessing positive estimate revisions which generally translate into rapid price appreciation. Following this strategy can help investors earn profits despite the ambiguity prevalent in the current environment.
4 Stocks to Bet On
With the help of our Zacks Stock Screener, we have shortlisted 4 stocks that sport a Zacks Rank #1 (Strong Buy) or #2 (Buy), pay dividend that yields more than 2.25%, trade at a Price/Earnings (F1) ratio of less than 15 and a carry Value Style Score of ‘A.’
Using our new style score system, one can locate stocks that have a solid upside potential. Our Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount. Our research shows that stocks with Style Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or #2 handily beat other stocks.
Texas-based CVR Refining, LP CVRR operates as an independent petroleum refiner and marketer of transportation fuels in the U.S. The company, which owns and operates a complex full coking medium-sour crude oil refinery in Kansas, has been consistently paying cash distributions since its IPO in 2013.
Zacks Rank: #1
Value Score: A
P/E (F1): 9.62
Div. Yield: 14.7%
AT&T, Inc. T is a premier communications holding company, which offers the world's most advanced IP-based business communications services, the nation's fastest 3G network and the best wireless coverage worldwide, and the nation's leading high speed Internet access and voice services. The Texas-based company has been paying regular dividends since its inception in 1984.
Zacks Rank: #2
Value Score: A
P/E (F1): 13.64
Div. Yield: 5.4%
The Michigan-based Ford Motor Co. F manufactures and distributes automobiles worldwide and operates through two sectors, Automotive and Financial Services. Founded in 1903, the auto company has paid dividends for more than 50 years.
Zacks Rank: #2
Value Score: A
P/E (F1): 9.13
Div. Yield: 4.1%
Cal-Maine Foods, Inc. CALM is engaged in the production, cleaning, grading and packaging of fresh shell eggs for sale to shell egg retailers. The Mississippi-based company is the one of the largest producers and distributors of fresh shell eggs in the U.S. and has been constantly paying dividends since the third quarter of fiscal 2008.
Zacks Rank: #1
Value Score: A
P/E (F1): 6.44
Div. Yield: 2.3%
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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