Value stocks can be found in nearly every corner of the market for investors willing to look hard enough. Today, I've found values in retail, technology, and telecom that are sitting right in front of our eyes.
For different reasons, Best Buy Co (NYSE: BBY), Apple Inc. (NASDAQ: AAPL), and AT&T Inc. (NYSE: T) are all my top value stocks in September, and there's something here for every kind of investor.
Image source: Getty Images.
The electronics retailer on a comeback
Brick and mortar retail hasn't been a hot segment for investors for a long time, but that doesn't mean there aren't areas of value. One company that's been performing relatively well is Best Buy, the electronics retailer that has survived the onslaught from the likes of Amazon and others.
Over the last few years, Best Buy has transitioned its business to focus more on enterprise, services, and the brick and mortar experience that online retailers can't offer. In the second fiscal quarter of 2020, same-store services revenue was up 10.7% domestically, far exceeding 1.9% growth for the company overall.
You can see below that the last five years have seen steady growth in both revenue and net earnings, which may seem surprising for a brick and mortar electronics retailer.
What I like at Best Buy is the company leaning into its advantages. Seeing and feeling the performance of products like TVs and speakers simply can't be replaced online, and Best Buy is building its stores to show off those features.
From a value standpoint, Best Buy's price to earnings ratio is just 12.0, and the dividend yield now stands at 3.1%. That's a solid price for a leading retailer, especially one that seems to have found its place in the market.
Value in big tech
It's hard not to see Apple as a value stock in today's market. The company has $102.2 billion of net cash on the balance sheet, and earned $55.7 billion in the past year. At the current market cap of $943 billion, the price to earnings ratio excluding net cash is 15.1 times, and the current dividend yield is 1.5%.
What separates Apple is the products that it makes and how integral they are to millions of peoples' lives. There are nearly 1 billion iPhones in service today, and those customers are getting pulled into an ecosystem that's hard to escape.
On an industry level, scale is more important than ever in technology, and few companies have the scale of Apple. That's valuable considering the rate tech is changing and growing overall. Add it up and this is a great value stock in technology.
A value play in telecom
Telecommunications stocks aren't getting a lot of love these days, because in the U.S. there's a lot of competition and not a lot of growth. For companies like AT&T, that has meant falling margins and little growth outside of acquisitions. But that's looking back, and right now investors should be looking forward.
What's attractive for investors today is the stock's 14.9 trailing P/E ratio and its 5.8% dividend yield, which is where the value lies. And looking at operations, there's a lot to like too.
5G wireless is here, and everything from autonomous cars to VR headsets will rely on a fast 5G connection. AT&T will have one of two or three of the best networks in the country (depending on the Sprint/T-Mobile deal), courting potentially hundreds of millions of new connected devices. That should drive higher revenue, and potentially higher margins as well.
I think the best days are still ahead for wireless in the U.S., and AT&T has one of the best networks -- and is trading at a great value for investors.
The value plays in today's market
There's more to value than just price to earnings ratios or dividends, and each of these companies has something different to offer. Best Buy is a retailer that's having success offering services online retailers can't offer, Apple is a cash machine, and AT&T is a bet on the future of 5G in the U.S. Each trades at a reasonable P/E multiple, and given their mainstay status in the economy I think they're all great values this month.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own)
- What Is an ETF?
- 5 Recession-Proof Stocks
- How to Beat the Market
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Travis Hoium owns shares of Apple and AT&T and has a family member who works at Amazon. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: short January 2020 $155 calls on Apple, long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, and long January 2020 $150 calls on Apple. The Motley Fool has a disclosure policy.
This article was originally published on Fool.com