Market Overview

SLIDESHOW: Barron's Likes These 15 Cheap Stocks

With the stock market hitting new record highs, finding cheap stocks for the long-run has been difficult. Over the weekend, Barron's identified 15 large-cap stocks that investors should look at for long-term investments.

Low Price-to-Earnings

Barron's identified 15 cheap stocks by looking for stocks within the S&P 500 trading with forward 2014 P/E ratios below 10. The market average is about 15 times earnings.

Barron's also noted that 11 of the 15 stocks pay dividends with yields greater than two percent while two of the other stocks could raise dividends in the near future to reach this key level.

Latest Ratings for VLO

DateFirmActionFromTo
Aug 2014OppenheimerMaintainsOutperform
Jun 2014JP MorganMaintainsOverweight
May 2014OppenheimerUpgradesMarket PerformOutperform

View More Analyst Ratings for VLO
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas Barron's Intraday Update Markets Analyst Ratings Media Personal Finance Best of Benzinga

>
  • Close Next 1/15 Previous

    1. Valero

    Valero (NYSE: VLO) popped up on the list alongside a few other refiners.

    Barron's said, "refiners have benefitted from low U.S. crude prices relative to global oil benchmarks." They also note that the shrinking differential of Brent and WTI crude prices, a source of profit for refiners, is already priced in.

    Fast facts:


    • Recent Price: $34.22

    • YTD Change: 9.8%

    • EPS 2013 Estimate: $4.51

    • EPS 2014 Estimate: $5.34

    • P/E 2014 Estimate: 6.4

    • Dividend Yield: 2.3%

    Photo courtesy of Cleveland.com.

  • Close Next 2/15 Previous

    2. Marathon Petroleum Corp.

    Marathon Petroleum Corp. (NYSE: MPC) is another refiner identified by Barron's as undervalued.

    The stock has recently fallen from its March high of $92 but Barron's is bullish here.

    Fast facts:


    • Recent Price: $68.29

    • YTD Change: 8.4%

    • EPS 2013 Estimate: $8.61

    • EPS 2014 Estimate: $9.67

    • P/E 2014 Estimate: 7.1

    • Dividend Yield: 2.1%

    Photo courtesy of corporate-ir.net.

  • Close Next 3/15 Previous

    3. Hewlett-Packard

    Hewlett-Packard (NYSE: HPQ) was identified as a cheap stock. However, fears over the slowdown in the PC market persist.

    Fast facts:


    • Recent Price: $26.33

    • YTD Change : 84.8%

    • EPS 2013 Estimate: $3.56

    • EPS 2014 Estimate: $3.68

    • P/E 2014 Estimate: 7.2

    • Dividend Yield: 2.2%

    Photo courtesy of picswalls.com.

  • Close Next 4/15 Previous

    4. Freeport-McMoRan

    Freeport-McMoRan Copper and Gold (NYSE: ) also made the list.

    Barron's noted that the company "offers a play on depressed copper and gold prices."

    Fast facts:


    • Recent Price: $28.17

    • YTD Change: -17.6%

    • EPS 2013 Estimate: $2.88

    • EPS 2014 Estimate: $3.61

    • P/E 2014 Estimate: 7.8

    • Dividend Yield: 4.4%

    Photo courtesy of tucsonsentinel.com.

  • Close Next 5/15 Previous

    5. Ensco

    Ensco (NYSE: ESV) was once again given the "Barron's bump" after a bullish feature article in January.

    Barron's noted that, "the rig industry outlook looks good because off-shore drilling remains a highly cost-effective exploration area for energy companies."

    Fast facts:


    • Recent Price: $60.67

    • YTD Change: 2.3%

    • EPS 2013 Estimate: $6.51

    • EPS 2014 Estimate: $7.69

    • P/E 2014 Estimate: 7.9

    • Dividend Yield: 3.3%

    Photo courtesy of drillingcontractor.org.

  • Close Next 6/15 Previous

    6. Phillips 66

    Phillips 66 (NYSE: PSX) is the last of the refiners to make the list.

    Again, Barron's liked refiners here and pointed out that strong dividends and growing earnings should lead to price returns.

    Fast facts:


    • Recent Price: $59.62

    • YTD Change: 7.2%

    • EPS 2013 Estimate: $7.45

    • EPS 2014 Estimate: $7.17

    • P/E 2014 Estimate: 7.9

    • Dividend Yield: 2.2%

    Photo courtesy of wikimedia.org.

  • Close Next 7/15 Previous

    7. General Motors

    General Motors (NYSE: GM) makes the list as Barron's noted it benefits from higher rates and a stronger stock market.

    As the stock market rises, GM's pension liabilities shrink and "the pension benefit was one reason that Goldman Sachs auto analyst Patrick Archambault added GM to the firm's Conviction Buy list last week."

    "GM should benefit from its newly redesigned full-size pickup," continued Barron's. "Archambault also sees GM instituting a dividend around year end, which should help the stock."

    Fast facts:


    • Recent Price: $36.84

    • YTD Change: 27.8%

    • EPS 2013 Estimate: $3.31

    • EPS 2014 Estimate: $4.41

    • P/E 2014 Estimate: 8.4

    • Dividend Yield: 0.0%

    Photo courtesy of tflcar.com.

  • Close Next 8/15 Previous

    8. Metlife

    Metlife (NYSE: MET) is one of two life insurers of the 15 stocks.

    Barron's noted that "when rates rise, [rate] pressures ease and spreads tend to widen on products like fixed-rate annuities."

    Fast facts:


    • Recent Price: $48.84

    • YTD Change: 48.3%

    • EPS 2013 Estimate: $5.47

    • EPS 2014 Estimate: $5.70

    • P/E 2014 Estimate: 8.6

    • Dividend Yield: 2.3%

    Photo courtesy of businessweek.com.

  • Close Next 9/15 Previous

    9. Western Digital

    Western Digital (NASDAQ: WDC) was highlighted in the piece as well. The stock has rallied sharply this year but Barron's sees more upside.

    Fast facts:


    • Recent Price: $69.65

    • YTD Change: 63.9%

    • EPS 2013 Estimate: $8.33

    • EPS 2014 Estimate: $7.99

    • P/E 2014 Estimate: 8.7

    • Dividend Yield: 1.4%

    Photo courtesy of wallpaperfast.com.

  • Close Next 10/15 Previous

    10. Prudential Financial

    Prudential Financial (NYSE: PRU) was the other life insurer identified by Barron's as still having upside.

    Barron's cited Morgan Stanley's life-insurance analyst Nigel Dally, who said, "if rates move higher, there is an argument for continued strong performance of the group."

    Fast facts:


    • Recent Price: $78.52

    • YTD Change: 47.2%

    • EPS 2013 Estimate: $8.34

    • EPS 2014 Estimate: $8.88

    • P/E 2014 Estimate: 8.8

    • Dividend Yield: 2.0%

    Photo courtesy of tysto.com.

  • Close Next 11/15 Previous

    11. Apache

    Apache (NYSE: APA) is the other oil exploration company to make the list.

    Barron's likes the stock as Apache has one of the lowest valuations among sizable oil and gas companies. They note the stock has suffered of late due to its 20 percent exposure to Egypt.

    Fast facts:


    • Recent Price: $83.60

    • YTD Change: 6.5%

    • EPS 2013 Estimate: $8.37

    • EPS 2014 Estimate: $9.05

    • P/E 2014 Estimate: 9.2

    • Dividend Yield: 1.0%

    Photo courtesy of drillingcontractor.org.

  • Close Next 12/15 Previous

    12. J.P. Morgan Chase

    J.P. Morgan Chase (NYSE: JPM) is the first of two banks to make the list.

    Barron's said, "J.P. Morgan Chase came through the financial crisis in far better shape than many rivals, and it has solidified leading positions in major businesses."

    Fast facts:


    • Recent Price: $56.37

    • YTD Change: 28.2%

    • EPS 2013 Estimate: $5.89

    • EPS 2014 Estimate: $6.08

    • P/E 2014 Estimate: 9.3

    • Dividend Yield: 2.7%

    Photo courtesy of crainsnewyork.com.

  • Close Next 13/15 Previous

    13. Citigroup

    Citigroup (NYSE: C) is the second bank to be mentioned in the Barron's piece, following its feature story last week.

    Barron's argued that, "Citi's shares looked good relative to tangible book value and earnings."

    Fast facts:


    • Recent Price: $52.69

    • YTD Change: 33.2%

    • EPS 2013 Estimate: $4.88

    • EPS 2014 Estimate: $5.54

    • P/E 2014 Estimate: 9.5

    • Dividend Yield: 0.1%

    Photo courtesy of wikimedia.org.

  • Close Next 14/15 Previous

    14. Deere and Co.

    Deere and Co. (NYSE: DE) is on the list despite global growth fears, especially out of China, weighing on competitors such as Caterpillar (NYSE: CAT).

    However, Barron's thinks the stock is good value at depressed levels.

    Fast facts:


    • Recent Price: $83.66

    • YTD Change: -3.2%

    • EPS 2013 Estimate: $8.52

    • EPS 2014 Estimate: $8.62

    • P/E 2014 Estimate: 9.7

    • Dividend Yield: 2.4%

    Photo courtesy of txmxautomotive.com.

  • Close Next 15/15 Previous

    15. Apple

    Lastly, Apple (NASDAQ: AAPL) wraps up the list. Barron's likes the company's new "investor friendly" model with its plan to more than double returns of capital to shareholders.

    "At its current price, Apple discounts a sharp drop in its earnings in the coming year," which Barron's says is an "overly pessimistic" scenario.

    Fast facts:


    • Recent Price: $427.65

    • YTD Change: -19.7%

    • EPS 2013 Estimate: $39.44

    • EPS 2014 Estimate: $43.37

    • P/E 2014 Estimate: 9.9

    • Dividend Yield: 2.8%

    Photo courtesy of wordpress.com.

 

Related Articles (AAPL + APA)

Get Benzinga's Newsletters