August represents a great opportunity to discover the best cheap stocks to buy. With stock market valuations likely hitting their peak in 2024, previously deemed cheap stocks will become even more attractive.
These companies are currently operating in any industry with massive growth potential. The tailwinds in construction and infrastructure solutions will remain strong despite the talks of a recession later this year. This growth is not just hearsay, and the company’s strong backlog and forward guidance make an extremely compelling investment case.
In addition, a 25 to 50 basis point rate cut by the Federal Reserve in September seems highly probable. The latest jobs report threatens the Fed’s dual mandate of maximum employment and price stability. Fortunately, this backdrop is a positive sign for the construction industry, as more loose financial conditions will fuel growth and investment.
Now, let’s discover the three best cheap stocks to buy in August!
Comfort Systems USA (FIX)
Comfort Systems USA (NYSE:FIX) takes the cake as one of the best cheap stocks to buy this month. Since the pandemic, the company’s robust revenue, earnings and free cash flow growth cannot be understated in 2024.
Comfort Systems primarily provides heating, ventilation and air conditioning (HVAC) installation and maintenance for its commercial and industrial clients. Its focus on energy-efficient building solutions has been a huge pillar of its growth and success in recent years. Further, the company’s groundbreaking dividend growth and strong cash flow generation testify to its commitment to returning value to shareholders. Despite extremely tough macroeconomic conditions last year, Comfort Systems drove record results across all metrics.
Similarly, the 2024 fiscal year has been no different, with momentum building after the first quarter. In Q2 FY24, revenue increased an astonishing 40% yearly to $1.81 billion. Net earnings nearly doubled to $134 million, or $3.74 per share. Its backlog of $5.77 billion remains near record levels, a show of confidence to drive growth further into 2025.
Dycom Industries (DY)
Dycom Industries (NYSE:DY), a leader in specialty contract services for the telecommunications industry, is looking ripe for further upside. After a great operational year in 2023, the company’s contracted revenue and adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) remain strong.
Dycom Industries is an under-the-radar company that many have not heard of before. It operates in an extremely niche segment, providing construction services for the telecommunications sector. In the last year, the company’s growth has been strong, largely driven by the increased demand for the deployment of fiber optic networks. Additionally, management is encouraged by the increased support of federal and state regulatory bodies. The Biden Administration addressed the need for communication networks in the rural parts of America, where Dycom sees tremendous growth opportunities.
In its latest quarterly results, contracted revenue increased 9.3% yearly to $1.14 billion. Net earnings rose 21% to $62.6 million, with adjusted EBITDA margin of 11.5%. Dycom’s strong liquidity and backlog provide ample visibility to drive revenue and earnings growth in the quarters ahead.
United Rentals (URI)
United Rentals (NYSE:URI) offers an attractive investment opportunity for those looking to snap up companies for cheap in August. As the world’s largest equipment rental company, United Rentals’s strong brand recognition and earnings growth make it a standout candidate in 2024.
United Rentals is coming off a record year in 2023, and its growth won’t be slowing down anytime soon. Strong demand in the construction equipment market drives the company’s revenue, earnings and free cash flow. This growth has notably accelerated in the last three years despite inflation and higher interest rates. CEO Matthew Flannery’s strong has driven the company’s operating leverage to new highs, and 2024 is currently playing out ‘’exactly how it expected to.’’ In the second quarter, revenue increased 6% yearly to $3.77 billion, with earnings per share up 11% to $9.54 per share. With particular strength in larger projects in 2024, United Rentals is well-positioned to deliver on its longer-term business objectives.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
