With the month of August kicking off, now is a great time to find the most promising value stocks to buy. These companies typically are market leaders in their industry that may be trading at a discount to their intrinsic value.
Investors often look towards traditional valuation metrics such as price to earnings, price to book and free cash flow margin — to name a few. However, it is important to point out that the metrics one uses will often be dependent on a variety of factors. It can include the industry, the company’s market positioning and future earnings growth potential. By focusing on stocks with strong financial health, investors can find stability and potential for sustainable returns over the long term.
Now, let’s discover the top three most promising value stocks to buy in August 2024!
T-Mobile US (TMUS)
T-Mobile US (NASDAQ:TMUS), a leader in the telecommunications sector, stands as one of the best value stocks to buy in August. While most of its peers continue to struggle, T-Mobile is thriving in an increasingly uncertain macroeconomic environment.
T-Mobile is a U.S.-based telecommunications giant and an emerging player in the 5G revolution. After the company’s merger with Sprint in 2020, the company catapulted to become one of the largest 5G providers in the country. Furthermore, its ultra-capacity 5G networks are the fastest in America, covering more than 330 million people across 2 million square miles. This robust speed and reliability contributed immensely to the company’s record earnings, free cash flow and net new account additions in 2023. After starting off 2024 strong, T-Mobile’s growth continues to charge ahead. In the second quarter, net earnings increased 32% year-over-year to $2.92 billion. Additionally, it added 1.3 million in net new account additions, the best in the industry. With record free cash flow generation of $4.4 billion, TMUS stock looks extremely compelling at current levels.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM), the largest bank in the United States, is another noteworthy value stock to keep your eyes on this month. The company’s strong market position and attractive valuation make it a great choice for the more conservative investor.
The banking industry is known for being extremely unpredictable and — at times — somewhat risky. During the 2008 financial crisis, there were 25 bank failures across the country. That has continued to keep investors on edge. More recently, the regional banking crisis last year also brought additional fear and caution to the industry. This fear has turned investors away from what may be an opportunity to buy shares at a discount. JPMorgan has an impeccable track record of maintaining strong liquidity and navigating through economic uncertainty. The company’s strong leadership contributed to its increased revenue, earnings and net interest income in the 2023 fiscal year. In addition, the stock still seems relatively cheap, trading at just 11 times forward earnings. Management’s increased net interest income forecast to $91 billion this year signals strong confidence in the business for 2024.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) is the final company on the list of the top value stocks to buy now. The company’s robust business model and incredible dividend growth track record make it a resilient pick amid market jitters.
Procter & Gamble is a great representation of value in 2024. Its stable earnings, strong cash flow generation and robust dividend profile make it extremely reliable in both bull and bear markets. When it comes to investing, there is no guarantee you’ll make money. However, more risk-averse investors will find peace of mind in companies with a nearly 70-year track record of dividend increases.
Despite a seemingly lackluster 2024 fiscal year, Procter & Gamble’s CEO remains confident in the business moving forward. In FY24, net sales and earnings per share both increased 2% year-over-year, respectively. Additionally, the company generated an operating cash flow of $19.8 billion and returned $9.3 billion to shareholders through dividends. CEO Jon Moeller is committed to delivering strong organic sales, earnings per share and free cash flow productivity in the 2025 fiscal year.
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.
