There’s nothing like getting a bargain on a quality company that could deliver strong returns for your portfolio over the long term. Successfully identifying a stock that the market is undervaluing is immensely satisfying if your investment ends up working out in your favor. The only issue is with the S&P 500 trading at all-time highs, it’s becoming harder and harder to find good deals.
This makes value investing a bit of a challenge, but that doesn’t necessarily mean there aren’t any potentially undervalued companies out there to consider adding at this time. Even though growth stocks have been in the spotlight lately, it’s likely only a matter of time before we start to see money rotate into value stocks again. Regardless of when this shift occurs, it can still pay off to start adding shares of quality names at discounted prices now.
That’s why we’ve put together the following list of 3 value stocks to buy for August. Keep reading on for a brief overview of some stocks that might be bargains at their current prices.
1. Barclays
First, we have Barclays (NYSE:BCS), a leading financial services company that is based in the United Kingdom and trading at a very attractive 6.63 P/E ratio. This ratio is considerably lower than most of the big banks based in the United States, and investors that are bullish on a global economic recovery can gain exposure to a quality international name here at a discount. What’s nice about Barclays is that it has a diversified business, as the company offers services across personal, corporate and investment banking, credit cards, and wealth management.
The company is perhaps the best retail bank in the U.K. and is seeing strong profits from its investment banking business at this time. Barclays just beat its Q2 earnings estimates and delivered a quarterly attributable profit of £2.1 billion, up from £90 million for Q2 2020. The bank also announced that it is boosting its payouts to shareholders with a dividend increase and a share buyback program of up to £500 million. The bottom line here is that Barclays is a great value stock for investors that are interested in owning a leading bank at an attractive valuation.
2. CVS Health
Adding shares of the largest pharmacy health care provider in the U.S. during a global pandemic makes a lot of sense, particularly when you notice that shares are trading at 11 times expected earnings. There’s a lot to like about CVS Health (NYSE:CVS) at this time given how the company is in the midst of transforming its business from drug stores into a full-scale health care experience. The company is remodeling its stores and expanding its services to offer things like in-store health services and telemedicine, which is certainly intriguing given how the healthcare industry is excepted to grow over the next decade.
There’s a good chance that investors haven’t quite caught on to what these changes might mean for CVS Health over the long term, and the company’s retail business combined with its insurance business could end up working perfectly in harmony. Finally, the fact that CVS Health stock offers investors a 2.4% dividend yield makes it a strong value name to consider. The company reports its Q2 earnings on Aug. 4 and could be a lucrative pick-up for August.
3. Dow Inc
If you’re going to own one chemicals stock, you’d be hard-pressed to find a more attractive option than Dow Inc (NYSE:DOW). It’s a global company that produces and distributes various chemical products that are used in industries such as packaging, infrastructure, and consumer care. With President Biden’s infrastructure deal edging closer to passing and plenty of demand from consumer packaging and construction customers, Dow is poised to deliver strong earnings through the remainder of the year. Keep in mind that the company’s packaging products are being used to distribute COVID-19 vaccines and are also in high demand given the sharp growth in e-commerce.
Dow just delivered strong Q2 results that saw the company’s net sales increase by 66% year-over-year to reach $13.9 billion. The company is benefitting from price increases and revenue growth in all of its operating segments, which is certainly attractive for a value stock. Finally, the stock offers a strong dividend yield of 4.53% at this time and has pulled back considerably from its highs back in May, both additional reasons to consider adding shares in August.