Investing can be challenging for those seeking stable and promising long-term investments. These three deep-value stocks to buy from well-established companies have the essential qualities that make them attractive for the long haul.
These stocks have experienced significant growth through comprehensive strategy, impressive revenues, customer centric focus and a strong market presence. They are also resilient to market conditions. Let’s take a look at three highly promising deep value stocks to buy:
United Airlines (UAL)
Due to its successful implementation of the United Next strategy, which addresses the airline industry’s exogenous constraints, United Airlines (NASDAQ:UAL) is positioned to benefit significantly over the long term. The positive impact of this strategy is showcased in the company’s financial performance in Q2 2023, setting the stage for continued growth and improved margins.
Notably, United Next focuses on four key pillars: aggressive pilot hiring, growth in Middle of the Continent hubs, up-gauging of the domestic fleet, and expanding international exposure. By addressing these areas, United Airlines has positioned itself to overcome industry challenges and achieve record-setting financial results.
One of the main challenges facing the industry is pilot shortages. United has taken proactive measures to hire pilots, ensuring it has the necessary manpower to meet demand. Additionally, the company has efficiently managed supply chain disruptions and addressed infrastructure limitations, minimizing their impact on operations.
Additionally, the successful execution of United Next has contributed to a record-breaking quarterly performance. It highlights the positive structural changes in international markets due to cost convergence and expanding their flight radius. Also, United’s customer centric initiatives are apparent through its mobile app, which the company has improved to enhance customer experience.
Celestica (CLS)
In Q1, Celestica (NYSE:CLS) had a financial performance which demonstrated solid year-over-year (YoY) progression despite volatility in customer demand. The company’s Advanced Technology Solutions (ATS), Life Cycle Solutions and Connected Solutions (CCS) segments posted revenue growth of 14%, 63% and 20%, respectively.
The strategic focus on diversified, high-end value markets with attractive long-term growth prospects contributed to the company’s strong performance. Celestica has seen revenue growth because of industrial, Aerospace and Defense (A&D) and HealthTech businesses in the ATS segment. There has also been strong demand and improved availability of materials in the CCS segment’s communications and enterprise end markets.
Additionally, the company has positioned itself well for the future. Celestica remains confident in its outlook despite patent uncertainty and recessionary pressures. As a result, the company has raised its full-year 2023 revenue outlook by 5% to at least $7.6 billion. The tightened non-IFRS adjusted EPS range of $2 to $2.05 represents YOY growth of 7%.
Celestica expects its diverse portfolio, growth in key end markets and continued operational focus to drive solid progression. Additionally, the company’s decision to invest in facilities and data centers across the globe has positioned it for continued growth in the changing market landscape.
Manulife Financial (MFC)
Q1 financials demonstrated Manulife Financial’s (NYSE:MFC) resilience and ability to navigate challenging economic conditions. Despite market volatility, Manulife reported an 11% growth in core EPS to $0.79 per share. Strong core earnings of $1.5 billion and the positive impact of the share buyback program led to the growth. Manulife Financial supported the growth with its robust capital position.
Moreover, the company showed substantial core earnings growth compared to the previous year, while momentum in Asia continued to build. Hong Kong APE sales increased by an impressive 26% from the prior-year quarter. This is due to the return of demand from Mainland Chinese visitors following the border reopening. The domestic Hong Kong business also experienced strong growth, with a 21% increase in sales quarter-over-quarter.
Furthermore, Manulife’s focus on generating shareholder value is evident through its continuous capital deployment and returns. In Q1 2023, the company returned $1.1 billion of capital to shareholders through dividends and share buybacks. It returned $4.4 billion in 2022. The company also maintained a strong capital position with a LICAT ratio of 138%. Also, the leverage ratio of 26% allows it to navigate the uncertain operating environment while investing in growth opportunities.
Manulife’s long-term investment performance remains solid, and over the past five years, 65% of its assets outperformed its peers or index. Finally, the company has reduced its sensitivity to market movements since the global financial crisis and is expected to remain on this trajectory.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
