Top 25 Lowest P/E Ratios of the S&P 500
In this article, we will take a look at the top 25 lowest P/E ratios of the S&P 500. You can skip this part and go to Top 5 Lowest P/E Ratios of the S&P 500.
US equities were hammered in 2022 amid the broader market downturn, rising inflation and the Federal Reserve’s rate-hike spree. However, many analysts believe this market crash has created attractive entry points for beginner investors. Low valuations should be seen as an investment opportunity. A report by Conversant Capital believes the US economy is expected to face a recession in 2023 through the summer, after which a recovery is expected to begin. The report also said that inflation in the US is expected to come down significantly in 2023, providing a strong catalyst to the stock market. Conversant Capital’s report also mentioned some sectors which the firm believes need more attention in 2023. The report said that IT, Health Care, and Energy are its favorite sectors heading into 2023. It plans to steer clear of cyclical industries like Consumer Discretionary and interest-rate sensitive sectors like Real Estate sector.
A report by Fidelity said the Federal Reserve is expected to slow its rate hikes in 2023 and would eventually stop them during this year. However, the firm said the Fed’s policy rate will remain higher for longer than the market expects.
Over the long term, the stock market is expected to move forward and come out of recession. When it does, US equities’ valuations will soar, rewarding investors who piled into undervalued stocks with solid fundamentals. That’s why in this article we will list some stocks with low PE ratios.
Photo by Ruben Sukatendel on Unsplash
Our Methodology
For this article we used stock screeners to select the 25 stocks with lowest PE ratios in the S&P 500 index. The list is ranked in descending order of the PE ratio metric. All PE ratios in the article are as of January 16.
Top 25 Lowest P/E Ratios of the S&P 500
25. General Motors Company (NYSE:GM)
P/E Ratio: 6.20
Number of hedge fund holders: 74
Michigan-based automotive giant General Motors Company (NYSE:GM) delivered 2.2 million vehicles in the US in 2022, beating Toyota. General Motors Company (NYSE:GM) has lost about 37% in value over the past year through January 16.
24. Diamondback Energy, Inc. (NASDAQ:FANG)
P/E Ratio: 5.89
Number of hedge fund holders: 55
Diamondback Energy, Inc. (NASDAQ:FANG) ranks 24th in our list of the top 25 stocks with lowest PE ratios in the S&P 500 index. Recently, Bank of America downgraded Diamondback Energy, Inc. (NASDAQ:FANG) to Underperform from Neutral with a $143 price target.
23. Valero Energy Corporation (NYSE:VLO)
P/E Ratio: 5.80
Number of hedge fund holders: 47
Shares of petroleum refinery company Valero Energy Corporation (NYSE:VLO) have gained about 58% in value over the past year. A total of 47 hedge funds tracked by Insider Monkey had stakes in Valero Energy Corporation (NYSE:VLO) as of the end of the third quarter.
22. Signature Bank (NASDAQ:SBNY)
P/E Ratio: 5.78
Number of hedge fund holders: 45
Shares of New York-based Signature Bank (NASDAQ:SBNY) have lost over 60% over the past 12 months. As of the end of the third quarter, Lansing Davis’ Davis Capital Partners has a $151 million stake in Signature Bank (NASDAQ:SBNY).
21. Ford Motor Company (NYSE:F)
P/E Ratio: 5.75
Number of hedge fund holders: 47
Ford Motor Company (NYSE:F) is one of the cheapest automotive stocks to buy now. Ford Motor Company (NYSE:F) recently posted strong numbers for truck and EV sales for December 2022. However, overall sales for the year were weak. As of the end of the third quarter, 47 hedge funds in our database had stakes in Ford Motor Company (NYSE:F).
20. D.R. Horton, Inc. (NYSE:DHI)
P/E Ratio: 5.75
Number of hedge fund holders: 42
Home construction company D.R. Horton, Inc. (NYSE:DHI) is a notable dividend-paying firm. A total of 42 hedge funds tracked by Insider Monkey had stakes in D.R. Horton, Inc. (NYSE:DHI) as of the end of the third quarter. Egerton Capital Limited of John Armitage was the biggest stakeholder of D.R. Horton, Inc. (NYSE:DHI) with a $317 million stake.
19. CF Industries Holdings, Inc. (NYSE:CF)
P/E Ratio: 5.71
Number of hedge fund holders: 65
CF Industries Holdings, Inc. (NYSE:CF) is a fertilizer company that has gained about 27% in stock value over the past 12 months. Still, CF Industries Holdings, Inc. (NYSE:CF) has an attractive PE ratio as of January 16. Hedge fund sentiment for CF Industries Holdings, Inc. (NYSE:CF) is also very strong. 65 funds in our database had stakes in CF Industries Holdings, Inc. (NYSE:CF) as of the end of the third quarter, compared to 52 funds in the previous quarter.
18. Coterra Energy Inc. (NYSE:CTRA)
P/E Ratio: 5.71
Number of hedge fund holders: 39
Coterra Energy Inc. (NYSE:CTRA) is a notable name in the hydrocarbon exploration sector in the US. Coterra Energy Inc. (NYSE:CTRA) ranks 18th on our list of top 25 stocks with lowest PE ratios in the S&P 500 index. As of the end of the third quarter, 39 hedge funds tracked by Insider Monkey had stakes in Coterra Energy Inc. (NYSE:CTRA). The biggest stakeholder of Coterra Energy Inc. (NYSE:CTRA) was Ric Dillon’s Diamond Hill Capital with a $118 million stake.
17. Occidental Petroleum Corporation (NYSE:OXY)
P/E Ratio: 5.42
Number of hedge fund holders: 74
Occidental Petroleum Corporation (NYSE:OXY) was among the top gainers in the S&P 500 index in 2022 as Occidental Petroleum Corporation (NYSE:OXY) was up 117% during the period. Hedge funds were piling into Occidental Petroleum Corporation (NYSE:OXY) as of the end of September last year. 74 funds had stakes in Occidental Petroleum Corporation (NYSE:OXY) at the end of the third quarter, compared to 66 funds in the previous quarter.
16. Marathon Petroleum Corporation (NYSE:MPC)
P/E Ratio: 5.35
Number of hedge fund holders: 50
Ohio-based refinery company Marathon Petroleum ranks 16th in our list of the top 25 stocks with lowest PE ratios in the S&P 500 index. Marathon Petroleum Corporation (NYSE:MPC) has gained a whopping 63% over the past 12 months as of January 12. Still, Marathon Petroleum Corporation (NYSE:MPC) has an attractive PE ratio. A total of 50 hedge funds tracked by Insider Monkey reported having stakes in Marathon Petroleum Corporation (NYSE:MPC) at the end of September.
15. Synchrony Financial (NYSE:SYF)
P/E Ratio: 5.29
Number of hedge fund holders: 27
Synchrony Financial is a financial services company. In December, Synchrony Financial (NYSE:SYF) reported that its credit card delinquency rate in November jumped to 3.6% from 3.4% in October. As of the end of the third quarter, 27 hedge funds tracked by Insider Monkey had stakes in Synchrony Financial (NYSE:SYF). The total value of these stakes was $1.2 billion.
14. Marathon Oil Corporation (NYSE:MRO)
P/E Ratio: 5.21
Number of hedge fund holders: 50
Of the 920 funds tracked by Insider Monkey, 50 funds had stakes in Marathon Oil Corporation (NYSE:MRO), as of the end of the third quarter. The biggest stakeholder of Marathon Oil Corporation (NYSE:MRO) is Ken Fisher’s Fisher Asset Management with a $188 million stake. Two Sigma Advisors has a $135 million stake in Marathon Oil Corporation (NYSE:MRO).
13. PulteGroup, Inc. (NYSE:PHM)
P/E Ratio: 5.09
Number of hedge fund holders: 29
PulteGroup, Inc. (NYSE:PHM) is a housing stock that has been facing some volatility due to the headwinds in the mortgage market. However, PulteGroup, Inc. (NYSE:PHM) remains a strong bet for the long term. In December, PulteGroup, Inc. (NYSE:PHM) increased its dividend by 6.7%. PulteGroup, Inc. (NYSE:PHM) also saw a spike in hedge fund sentiment during the third quarter. A total of 29 hedge funds tracked by Insider Monkey had stakes in PulteGroup, Inc. (NYSE:PHM), compared to 19 funds in the previous quarter.
Here is what Miller Value Partners specifically said about PulteGroup, Inc. (NYSE:PHM):
“Homebuilders and financials, the worst losers during the Financial Crisis crash, plummeted. Some homebuilders, like PulteGroup, Inc. (NYSE:PHM), traded down to half their financial crisis lows despite reporting housing improvements for the first time. Fear ruled in the short term, but fundamentals ultimately prevailed. Homebuilders were top performers in 2012 posting triple-digit increases in some cases. Opportunity Equity was a top performer that year.”
12. Capital One Financial Corporation (NYSE:COF)
P/E Ratio: 5.09
Number of hedge fund holders: 52
Capital One Financial Corporation (NYSE:COF) is one of the biggest banking companies in the US. Recently, Capital One Financial Corporation (NYSE:COF) lost some ground after Jefferies analyst John Hecht downgraded the bank stock to Hold from Buy. The analyst highlighted several headwinds for Capital One Financial Corporation (NYSE:COF) in the near term, including elevated rates for delinquencies and net charge-offs versus peers.
Nevertheless, Capital One Financial Corporation (NYSE:COF) is one of the most famous banking stocks among the 920 funds tracked by Insider Monkey. 52 hedge funds had stakes in Capital One Financial Corporation (NYSE:COF) moving into the fourth quarter of 2022.
11. Steel Dynamics, Inc. (NASDAQ:STLD)
P/E Ratio: 4.92
Number of hedge fund holders: 28
Steel Dynamics, Inc. (NASDAQ:STLD) is a recent arrival in the S&P 500 index. Steel Dynamics, Inc. (NASDAQ:STLD) was added to the index in December 2022. Steel Dynamics, Inc. (NASDAQ:STLD) recently said that it expects its Q4 adjusted EPS to come in between $4.10 to $4.14. As of the end of the third quarter of 2022, 28 hedge funds tracked by Insider Monkey reported having stakes in Steel Dynamics, Inc. (NASDAQ:STLD).
10. Nucor Corporation (NYSE:NUE)
P/E Ratio: 4.91
Number of hedge fund holders: 41
Steel company Nucor Corporation (NYSE:NUE) has a dividend yield of over 1% as of January 16. Earlier this month, Nucor Corporation (NYSE:NUE) announced to raise its steel sheet prices by $50/short ton. In December, Nucor Corporation (NYSE:NUE) announced that its full-year 2022 earnings were on track to exceed the record of $23.16/share Nucor Corporation (NYSE:NUE) set in 2021.
As of the end of the third quarter, 41 hedge funds tracked by Insider Monkey had stakes in Nucor Corporation (NYSE:NUE), compared to 32 funds in the previous quarter.
9. DISH Network Corporation (NASDAQ:DISH)
P/E Ratio: 4.81
Number of hedge fund holders: 40
DISH is one of the biggest satellite TV companies in the US. During the third quarter, DISH Network Corporation (NASDAQ:DISH)’s revenue came in at $4.1 billion, narrowly missing estimates. DISH Network Corporation (NASDAQ:DISH) said that its net pay TV subscribers increased by 30,000 in the quarter. This was better than the decline of 13,000 in the comparable period last year.
40 of the 920 funds in Insider Monkey database had stakes in DISH Network Corporation (NASDAQ:DISH) as of the end of the third quarter.
8. Phillips 66 (NYSE:PSX)
P/E Ratio: 4.72
Number of hedge fund holders: 34
US-based petroleum refining company Phillips 66 (NYSE:PSX) has one of the lowest PE ratios in the S&P 500 index. Phillips 66 (NYSE:PSX) is also a dividend payer. Phillips 66 (NYSE:PSX) has a dividend yield of 3.7% as of January 16. Earlier this month, Phillips 66 (NYSE:PSX) said it agreed to buy all publicly held common units in DCP Midstream (NYSE:DCP) for $41.75 each.
A total of 34 hedge funds tracked by Insider Monkey had stakes in Phillips 66 (NYSE:PSX) as of the end of the third quarter.
7. The Mosaic Company (NYSE:MOS)
P/E Ratio: 4.53
Number of hedge fund holders: 46
The Mosaic Company (NYSE:MOS) is a mining and fertilizer company with one of the lowest PE ratios in the S&P 500 index. The Mosaic Company (NYSE:MOS) has gained about 6% over the past 12 months. It is also an attractive dividend play. Last month, Mosaic (NYSE:MOS) declared a $0.20/share quarterly dividend, which was a 33% increase from its previous dividend.
As of the end of the third quarter, 46 hedge funds tracked by Insider Monkey reported having stakes in The Mosaic Company (NYSE:MOS).
Ariel Investment made the following comment about The Mosaic Company (NYSE:MOS) in its Q3 2022 investor letter:
“Producer and marketer of crop nutrients The Mosaic Company (NYSE:MOS) also traded up in the period on solid financial results. MOS continues to demonstrate its ability to raise prices and offset input cost inflation, as well as return significant capital to shareholders through buybacks. Meanwhile, trade flows have shifted with Russia and Belarus, the second and third largest fertilizer exporters globally, banning exports and facing sanctions imposed by the West. As a result, MOS is expanding production to help meet global demand. Given management’s optimistic outlook and disciplined approach towards capital allocation, we continue to believe the company is well[1]positioned from a risk/reward standpoint.”
6. Paramount Global (NASDAQ:PARA)
P/E Ratio: 4.39
Number of hedge fund holders: 40
Paramount Global (NASDAQ:PARA) is a major media company. Paramount Global (NASDAQ:PARA) has a dividend yield of over 4% as of January 16.
As of the end of the third quarter, 40 hedge funds tracked by Insider Monkey reported having stakes in Paramount Global (NASDAQ:PARA), compared to 42 funds in the previous quarter.
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Disclosure: None. Top 25 Lowest P/E Ratios of the S&P 500 is originally published on Insider Monkey.
