As we approach mid-2024, investors are eagerly searching for the best value stocks to buy. These are typically well-established companies with solid financials, strong brand recognition and a history of consistent dividend payments.
Recent economic indicators suggest a favorable environment for value stocks, with a rebounding economy and the prospects of lower inflation. Moreover, savvy investors can look beyond traditional financial metrics such as innovation, market expansion, and management execution. By strategically selecting value stocks with a strong growth trajectory, investors can position themselves to benefit from substantial returns.
Now, here are the top value stocks to buy in May!
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG), a consumer giant with a portfolio of household brands like Tide, Pampers and Gillette, is a classic example of a value stock. Its strong brand loyalty and extensive distribution network provide a competitive advantage that is difficult to replicate.
In recent years, PG has demonstrated resilience in the face of rising inflationary pressures. Its ability to remain profitable and grow its dividend through various economic cycles is a testament to its robust business model. The company’s focus on innovation and geographical diversification has also contributed to its sustained growth. In their latest quarterly results, revenue increased a modest 1% YOY. However, EPS grew 11% from the year prior, while generating operating cash flow of $4.1 billion. PG stock is also a dividend aristocrat, offering a yield of around 2.4%. They have increased their dividend for 68 consecutive years, and paid out dividends for 134 consecutive years since its incorporation in 1890. This makes PG stock one of the top value stocks to buy in May.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM), one of the world’s largest banks, is another value stock worth considering for explosive gains in May. Despite the challenges in the banking sector and economy in 2024, JPM’s liquidity remains best in class.
JPMorgan has consistently delivered strong financial results over the years. More recently, they have benefited tremendously from the higher interest rate environment in the U.S. Higher interest rates on deposits for credit cards, mortgages and lines of credit is great news for large banks like JPM. This led to record net interest income in the 2023 fiscal year, and rate remaining higher for longer could be another positive tailwind in 2024. On May 20th, CEO Jamie Dimon, warned investors on the economic risks in the economy and his future succession plans. They have also raised their net interest income forecast to $91 billion, up from the $89 billion forecast for FY24.
McDonald’s Corp (MCD)
McDonald’s Corp (NYSE:MCD) is the world’s largest fast food chain and one of the most compelling value stocks to buy for 2024. Despite rising criticism among consumers and Wall Street, the company’s long term growth trajectory remains intact.
McDonald’s has largely underperformed the broader market this year with the stock down nearly 10%, compared to the S&P 500’s 12% increase. Wall Street has turned increasingly bearish, as consumers push back on rising prices. In recent years, MCD has undergone a transformation, focusing on improving its menu, and enhancing customer experience. These efforts have paid off, as evidenced by the record earnings results in FY 2023. In Q1 FY 2024, MCD comparable sales grew 2% YOY marking its 13 consecutive quarter of growth. Profitability also increased during the quarter, with net earnings up 7% to $1.95 billion. With a global expansion underway and strong dividend growth potential, MCD stock remains one of the best value stocks to buy in May for long term gains.
On the date of publication, Terel Miles did not have (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.
