Market downturns can be appealing to those who have been accumulating cash and are eager to pounce on some bargains. That’s because such times present great opportunities when the stocks of lots of solid companies with great growth prospects have fallen into bargain territory.
You don’t need a market downturn to find some great opportunities, though. Even when the market has been rising for a while and is frothy, there will be some bargains for those who can find them. These days the market has been clawing its way back from a downturn, and plenty of good companies are still selling at attractive stock prices. Here are three to consider.
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1. Ford Motor Company
The stock of Ford Motor Company (NYSE: F) appears to be attractively valued at recent levels. Investors have very different opinions about it, though. Bulls like that the company has been investing heavily in electric vehicles (EVs), which are growing in popularity. But Ford is not yet taking the EV world by storm. In fact, it has cut back its immediate production goals for its electric F-150 truck.
Its third quarter featured the company continuing to be the U.S.’s top truck seller, with sales of its Bronco SUVs up 25% year over year. Sales of hybrid and electric vehicles hit new records, and sales of vans were up by double digits, too. On the other hand, it has not been a great revenue grower in recent years, and its profit margins have been thin.
If you’re bullish on Ford and think it will turn its situation around, take a closer look at it. Its dividend, recently yielding 5.8%, is quite attractive. Ford may not soar over the coming year, but it’s likely to keep growing over many years, rewarding its shareholders with significant income and likely stock price appreciation, as well. If you’re not sure, maybe add it to a watchlist.
2. Walt Disney
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Walt Disney (NYSE: DIS) is also a dividend payer, but its yield is currently below 1%. In fact, it suspended its payout in 2020 and has only just reinstated it, at 34% of what it last was. Dividends from healthy and growing companies tend to be increased, though, so those who buy now should enjoy effectively higher yields in the future.
Disney’s stock has recently been trading more than 50% below its high three years ago and near a nine-year low, making its valuation appealing. Its recent forward-looking price-to-earnings (P/E) ratio of 16 is well below its five-year average of 41, and there’s a lot to like about its multifaceted businesses, too.
CEO Bob Iger has been cutting costs successfully and sees a period of repair giving way to one of building. Its streaming businesses, such as Disney+ and Hulu (which it will soon own all of), hold much promise for further growth, and it’s planning an ESPN streaming service, as well (Disney owns 80% of ESPN). Disney is also planning to plow $60 billion into its theme parks over the coming decade.
The company has been around for a full century, and it’s built to last for many more decades, at least.
3. Veeva Systems
Veeva Systems (NYSE: VEEV) is not a dividend payer because it’s still investing heavily in its growth. The company offers a cloud-based platform for the life sciences industry — for example, helping biotechnology and pharmaceutical companies manage clinical trials of treatments in development, among other things.
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Veeva’s third quarter was solid, featuring revenue of $617 million, up 12% year over year, while net income jumped 25%. CEO Peter Gassner noted: “We announced a number of new innovations, expanded in existing markets, and continued progress in newer areas like Vault CRM, positioning us well for durable, profitable growth for years to come.”
Veeva’s stock is appealingly priced at recent levels, with a forward P/E ratio near 44, well below the five-year average of 67. It has a price-to-sales ratio of 13, down sharply from its five-year average of 23. Note, though, that those are all fairly steep numbers. So if you’re risk averse, you might hold off, hoping for a lower entry point — though with fast growers like Veeva, such lower entry points often never come. It helps to be a long-term investor, aiming to hold your shares for many years.
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These are just three of many attractively priced companies you might consider for berths in your portfolio. Dig a little deeper into any that interest you to see if they seem like a good fit for you.
