Top 30 Lowest P/E Ratios of the S&P 500
In this article, we will take a look at the top 30 lowest P/E ratios of the S&P 500. To see more such companies, go directly to Top 5 Lowest P/E Ratios of the S&P 500.
In its 2024 stock market outlook report, Goldman Sachs claimed that the hard part of the Fed's battle against inflation is over and that the “plane has landed softly.” Goldman Sachs said that recession risks have decreased and recession odds are “not higher than for a typical year, compared with consensus forecasts that are more downbeat”
Goldman Sachs also highlighted US exceptionalism that was evident throughout 2023. Despite recession calls and risks of market crash, US consumer sentiment remained strong and the economy did not slow down as initially expected. Goldman Sachs, however, believes that if the economic activity remains strong the Fed might keep interest rates higher. This “higher for longer” scenario might not bode well for emerging markets and could cause many sovereigns to lose market access. Goldman Sachs also talked about the possibility of inflation coming back:
“We expect this theme to be more pertinent as we move deeper into the year. High inflation and the policymaker fight against it has been the dominant source of market volatility in the past couple of years. And while that is likely to fade, there are still likely to be some stings in the tail in coming months. After a summer of very low core inflation readings in the US of 0.2%mom, monthly inflation numbers are likely to print somewhat higher in coming months. Moreover, if the economy does not slow as we expect, the prospect of one or two additional Fed hikes could mean that we enter 2024 with monetary policy still a source of higher rate volatility rather than a driver of lower growth volatility.”
For this article we used a stock screener to identity 30 stocks with the lowest PE ratios in the S&P 500 index as of November 13.
Photo by Nicholas Cappello on Unsplash
Top 30 Lowest P/E Ratios of the S&P 500
30. CF Industries Holdings, Inc. (NYSE:CF)
PE Ratio as of November 13: 7.40
CF Industries Holdings, Inc. (NYSE:CF) ranks 30th in our list of the top stocks with the lowest PE ratios in the S&P 500 index. As of the end of the second quarter of 2023, 42 hedge funds tracked by Insider Monkey reported owning stakes in CF Industries Holdings, Inc. (NYSE:CF). The most significant stakeholder of CF Industries Holdings, Inc. (NYSE:CF) was Cliff Asness’s AQR Capital Management which owns a $179 million stake in the company.
29. Truist Financial Corporation (NYSE:TFC)
PE Ratio as of November 13: 7.39
Truist Financial Corporation (NYSE:TFC) is one of the top stocks with the lowest PE ratios. Of the 910 hedge funds in Insider Monkey’s database of hedge funds, 42 hedge funds had stakes in Truist Financial Corporation (NYSE:TFC) as of the end of the second quarter, down from 48 funds in the previous quarter.
Here is what Tweedy, Browne has to say about Truist Financial Corporation (NYSE:TFC) in its Q1 2023 investor letter:
“The Funds received very little in the way of return contributions from many of their financial, energy, media, and healthcare holdings. While it would appear that a crisis was avoided by the quick intervention of bank regulators in the US and Switzerland, some uneasiness still remains in the global banking community. This turmoil couldn’t help but have a negative impact on investor sentiment and in turn on Fund bank holdings such as Truist Financial Corporation (NYSE:TFC).”
28. Verizon Communications Inc. (NYSE:VZ)
PE Ratio as of November 13: 7.20
Verizon Communications Inc. (NYSE:VZ) ranks 28th in our list of the stocks with the lowest PE ratios in the S&P 500 index. Last month Verizon Communications Inc. (NYSE:VZ) was upgraded by Barclays.
Of the 910 hedge funds tracked by Insider Monkey, 53 hedge funds had stakes in Verizon Communications Inc. (NYSE:VZ).
27. Tapestry, Inc. (NYSE:TPR)
PE Ratio as of November 13: 7.16
Luxury fashion company Tapestry, Inc. (NYSE:TPR)’s shares have lost about 17% over the past one year. Tapestry, Inc. (NYSE:TPR) recently posted fiscal Q1 results. Adjusted EPS in the quarter came in at $0.93, beating estimates by $0.03. Revenue in the quarter jumped about 0.7% year over year to $1.51 billion, missing estimates by $30 million.
26. Fifth Third Bancorp (NASDAQ:FITB)
PE Ratio as of November 13: 7.15
Ohio-based Fifth Third Bancorp (NASDAQ:FITB) shares have lost about 30% in value over the past one year. Last month Fifth Third Bancorp (NASDAQ:FITB) posted third quarter results. Adjusted EPS in the quarter totaled $0.92, beating estimates by $0.09. Revenue in the quarter fell 0.5% year over year to $2.16 billion, meeting estimates.
25. Everest Group, Ltd. (NYSE:EG)
PE Ratio as of November 13: 7.13
Bermuda-based insurance company Everest Group, Ltd. (NYSE:EG) shares have gained about 24% year to date. Yet Everest Group, Ltd. (NYSE:EG) has one of the lowest PE ratios in the S&P 500 index.
24. DuPont de Nemours, Inc. (NYSE:DD)
PE Ratio as of November 13: 7.11
Chemicals company DuPont de Nemours, Inc. (NYSE:DD) is one of the stocks with the lowest PE ratios in the S&P 500. DuPont de Nemours, Inc. (NYSE:DD) recently posted Q3 results. Adjusted EPS in the quarter came in at $0.92. Revenue in the period fell 6.6% year over year to $3.1 billion.
DuPont de Nemours, Inc. (NYSE:DD) talked in detail about its guidance and future expectations in its latest earnings call:
Underlying consumer electronics demand in the fourth quarter is expected to be generally similar to the third quarter, with some sequential sales is expected in semiconductor technologies. As mentioned earlier, we saw additional channel inventory destocking and slower industrial demand in China, mainly impacting Water Solutions compared to prior expectations, and we assume these same trends to continue through the end of the year. As a result of this incremental volume softness, we are adjusting our net sales and operating EBITDA guidance and now expect full year net sales to be about $12.17 billion and operating EBITDA to be at about $2.97 billion, which is at the low end of our prior range.
For the fourth quarter, we expect net sales of approximately $3 billion, with a sequential decline versus third quarter, driven predominantly by additional inventory destocking in the Safety Solutions line of business and, to a lesser extent, by the impact of seasonality and incremental currency headwinds. We expect full year 2023 adjusted EPS to be approximately $3.45 per share, which is the midpoint of our prior guidance range.
Read the full earnings call transcript here.
Third Point made the following comment about DuPont de Nemours, Inc. (NYSE:DD) in its Q4 2022 investor letter:
“We recently increased our investment in DuPont de Nemours, Inc. (NYSE:DD), a specialty chemical company run by legendary value creator Ed Breen, who is leading a corporate transformation. In November, DuPont divested its most cyclical and lowest margin business segment, Mobility & Materials, to Celanese for $11 billion, or 14x 2023e EV/EBITDA. Following the divestiture, the improved DuPont trades at 11x 2023e EV/EBITDA, which represents a ~30% discount to its peer group.
We believe the company is laser-focused on closing this gap. First, $5 billion of the proceeds are being deployed to repurchase nearly 15% of its outstanding shares. The next significant catalyst for the stock is a potential settlement of PFAS-related multidistrict litigation in South Carolina, which remains an overhang on the stock even though DuPont’s PFAS liability was largely ring-fenced by the 2021 settlement with Chemours and Corteva. DuPont’s strong management team is eager to demonstrate the business quality of the new portfolio during the current period of economic volatility. We expect the combined catalysts of increased share repurchases, the pending resolution of legal claims, and the new business structure to drive meaningful value for shareholders.”
23. Steel Dynamics, Inc. (NASDAQ:STLD)
PE Ratio as of November 13: 6.99
Steel Dynamics, Inc. (NASDAQ:STLD) ranks 23rd in our list of the top lowest PE ratios in the S&P 500. Steel Dynamics, Inc. (NASDAQ:STLD) has gained about 14% year to date.
22. Phillips 66 (NYSE:PSX)
PE Ratio as of November 13: 6.84
Energy company Phillips 66 (NYSE:PSX)’s stock has gained about 12% year to date through November 13.
Aristotle Capital Value Equity Strategy made the following comment about Phillips 66 (NYSE:PSX) in its Q3 2023 investor letter:
“Phillips 66 (NYSE:PSX), a diversified refiner, chemicals and midstream energy company, was a leading contributor for the quarter. While still perceived by many as just a refiner, we continue to be impressed by the company’s ongoing transformation to a more diversified energy business. Consistent with this strategy, Phillips 66 completed the acquisition of DCP Midstream, which expands its NGL (natural gas liquids) business that now spans the entire natural gas value chain, from wellhead to end user. In addition, the company remains on track in converting its San Francisco refinery into one of the world’s largest renewable fuels facilities, with commercial operations set to begin in early 2024. The firm has also made progress on various projects designed to enhance efficiency, increase utilization and bolster capture rates, which can deliver $800 million in cost savings by the end of 2023. With these improvements, as well as further optimization of its midstream and chemicals businesses, we believe Phillips 66 is well positioned to increase its FREE cash flow generation as it continues to become “much more than a refiner.”
21. M&T Bank Corporation (NYSE:MTB)
PE Ratio as of November 13: 6.82
M&T Bank Corporation (NYSE:MTB) in October posted third quarter results. Adjusted EPS in the quarter was $4.05, beating estimates by $0.13.
20. Huntington Bancshares Incorporated (NASDAQ:HBAN)
PE Ratio as of November 13: 6.79
Huntington Bancshares Incorporated (NASDAQ:HBAN) shares have lost about 31% over the past one year. As of the end of the second quarter of 2023, 30 hedge funds tracked by Insider Monkey were long Huntington Bancshares Incorporated (NASDAQ:HBAN).
19. PulteGroup, Inc. (NYSE:PHM)
PE Ratio as of November 13: 6.70
Residential home construction company PulteGroup, Inc. (NYSE:PHM) is one of the stocks with the lowest PE ratios in the S&P 500 index. Insider Monkey’s proprietary database of 910 hedge funds shows that 38 hedge funds had stakes in PulteGroup, Inc. (NYSE:PHM).
18. Citigroup Inc. (NYSE:C)
PE Ratio as of November 13: 6.68
Citigroup Inc. (NYSE:C) recently posted Q3 results. Citigroup Inc. (NYSE:C)’s adjusted EPS in the period came in at $1.52 beating estimates by $0.30. Revenue in the quarter jumped about 8.8% year over year to $20.1 billion.
17. Ford Motor Company (NYSE:F)
PE Ratio as of November 13: 6.47
Ford Motor Company (NYSE:F) recently posted numbers for October 2023. Ford Motor Company (NYSE:F)’s sales in the US declined by 5.3% on a YoY basis, falling to 149,938 units.
16. Delta Air Lines, Inc. (NYSE:DAL)
PE Ratio as of November 13: 6.44
Delta Air Lines, Inc. (NYSE:DAL) stock jumped last month after the company posted strong Q3 results. Delta Air Lines, Inc. (NYSE:DAL)’s earnings per share came in at $2.03, beating estimates by $0.08. Revenue in the period jumped 10.8% year over year to $15.59 billion.
Patient Capital Management made the following comment about Delta Air Lines, Inc. (NYSE:DAL) in its Q3 2023 investor letter:
“Airlines returned to trough multiples as higher oil prices pressured costs. Historically, airlines have passed these costs on to customers. We think Delta Air Lines, Inc. (NYSE:DAL) is a premium brand valued like its economics aren’t sustainable. With mid-teens returns on capital, significant free cash flow generation, excellent capital allocation and long-term earnings per share growth in the high-single to low-double-digits, we think the company is significantly mispriced.
Delta Air Lines Inc. (DAL) reversed course in the third quarter, falling 24% from its highs in July. The airlines in general were hurt from rising commodity prices that are leading to increased cost per available seat mile (CASM). Historically, airlines have passed on higher fuel prices to customers with a lag. We see Delta as a premium global consumer brand that is materially misunderstood by the market. The market still sees airlines as a cyclical, bankruptcy prone industry. An improved supply-demand picture, management discipline and a better business mix make Delta a more resilient business. Their loyalty program with American Express is a source of stable and growing revenues with $6.5B in remunerations this year with a goal of reaching $10B by the end of the contract in 2028. Premium and ancillary service revenue should generate 65-70% of the total in the next year or two. The company should continue to generate consistent mid-teens returns on capital. As the market begins to understand, we believe the company will continue to be rewarded. On top of this, free cash flow is expected to expand generating a cumulative ~$11B from ’23-’25, or one-half of its current market cap. As the company pays down debt while growing the dividend and eventually resuming share repurchases, we think the stock will continue to trend higher.”
15. Celanese Corporation (NYSE:CE)
PE Ratio as of November 13: 6.39
Specialty materials company Celanese Corporation (NYSE:CE) ranks 15th in our list of the top 30 lowest PE ratios in the S&P 500.
Oakmark Fund made the following comment about Celanese Corporation (NYSE:CE) in its second quarter 2023 investor letter:
“Celanese Corporation (NYSE:CE) is the world’s largest and lowest cost producer of acetic acid and a leading producer of engineered polymers used in applications ranging from auto parts to medical devices. Although the company operates in highly cyclical markets, its unmatched cost position allows it to remain profitable even during severe industry downturns. Recently, the market reacted negatively to Celanese’s acquisition of Dupont’s Mobility & Materials segment because the deal added financial leverage to the balance sheet during a cyclical downturn. Despite challenging industry conditions today, we believe the company will generate significant cash flow to reduce its debt burden rapidly. We also believe the integration of the acquired business will yield cost synergies and strengthen Celanese’s engineered materials franchise over the long term. The stock price dislocation presented an opportunity to purchase Celanese shares at a single-digit multiple of our estimate of normalized earnings power.”
14. Regions Financial Corporation (NYSE:RF)
PE Ratio as of November 13: 6.27
JPMorgan recently downgraded Regions Financial Corporation (NYSE:RF) stock to Neutral from Overweight, citing pressures from increased deposit costs.
"The stock has already fallen on the sharp beta increase and change in tone, but [J.P. Morgan] doesn't see a catalyst to outperform as betas continue to catch up to peers," J.P. Morgan’s Vivek Juneja said.
13. Citizens Financial Group, Inc. (NYSE:CFG)
PE Ratio as of November 13: 6.25
Citizens Financial Group, Inc. (NYSE:CFG) shares have lost about 37% year to date through November 13. As of the end of the second quarter of 2023, 46 hedge funds had stakes in Citizens Financial Group, Inc. (NYSE:CFG), as per Insider Monkey’s database.
12. Discover Financial Services (NYSE:DFS)
PE Ratio as of November 13: 6.20
TD Cowen recently started covering Discover Financial Services (NYSE:DFS) with an Outperform rating.
11. Viatris Inc. (NASDAQ:VTRS)
PE Ratio as of November 13: 6.10
Pharma company Viatris Inc. (NASDAQ:VTRS) ranks 11th in our list of the top stocks with the lowest PE ratios in the S&P 500. Of the 910 hedge funds in Insider Monkey’s database, 42 hedge funds had stakes in Viatris Inc. (NASDAQ:VTRS).
Here is what Davis New York Venture Fund has to say about Viatris Inc. (NASDAQ:VTRS) in its Q3 2023 investor letter:
“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Viatris, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Viatris, a leading manufacturer of low-cost branded generic drugs."
10. Zions Bancorporation, National Association (NASDAQ:ZION)
PE Ratio as of November 13: 6.07
Zions Bancorporation, National Association (NASDAQ:ZION) recently received a Buy rating from Citi analyst Keith Horowitz, who said that it was time to be on the offense and buy beaten down regional bank stocks.
FMI made the following comment about Zions Bancorporation, National Association (NASDAQ:ZION) in its Q1 2023 investor letter:
“Our two most impacted holdings during this recent crisis were Zions Bancorporation, National Association (NASDAQ:ZION) and discount broker Charles Schwab. We believe both have sticky deposit bases, best-in-class management teams, conservative balance sheets, and attractive valuations. In both cases, outside of absolute contagion/panic resulting in a run on their deposits (a very low probability tail risk), we view the impact on the businesses as more of an “earnings” event, not a “balance sheet” event. Zions and Schwab got caught up in the contagious fear around SVB’s collapse due to some optical similarities between their balance sheets (namely bonds carried at mark-to-market losses), and Zions being a West Coast regional bank. We believe the similarities largely end there. Zions has a much more diverse deposit base than SVB. We estimate that half of Zions’ deposit base are small and medium-sized business operating deposits, which have historically been quite stable and a competitive advantage. Nearly half of Zions’ deposits are FDIC-insured, and the bank has ample liquidity to meet outflows without selling its securities portfolio. Similarly, Schwab’s retail deposit base is very sticky. Over 80% of their customers’ cash is FDIC-insured, and the cash is spread across approximately 34 million brokerage accounts (average ~$10,000 in bank cash per account). Schwab has more balance sheet liquidity than deposits. In both cases, there appears to be a low risk of correlation among their respective client bases. Although there will likely be some profit headwinds that stem from this crisis, we viewed the large declines in these shares as overly punitive, and thus believe the risk/reward for each is increasingly attractive. We have added to both positions.”
9. Synchrony Financial (NYSE:SYF)
PE Ratio as of November 13: 5.47
Synchrony Financial (NYSE:SYF) ranks 9th in our list of the stocks with the lowest PE ratios in the S&P 500. Synchrony Financial (NYSE:SYF)’s GAAP EPS in the third quarter came in at $1.48, beating estimates by $0.06.
8. Marathon Petroleum Corporation (NYSE:MPC)
PE Ratio as of November 13: 5.42
Another oil stock in our list, Marathon Petroleum Corporation (NYSE:MPC) has gained about 30% year to date through November 13.
7. American Airlines Group Inc. (NASDAQ:AAL)
PE Ratio as of November 13: 5.41
American Airlines Group Inc. (NASDAQ:AAL) posted mixed Q3 results last month. American Airlines Group Inc. (NASDAQ:AAL)’s adjusted EPS in the quarter totaled $0.38, surpassing estimates by $0.12. Revenue in the quarter came in at $13.48 billion, missing estimates by $60 million.
6. EQT Corporation (NYSE:EQT)
PE Ratio as of November 13: 5.30
EQT Corporation (NYSE:EQT) ranks 6th in our list of the stocks with the lowest PE ratios in the S&P 500 index. In October EQT Corporation (NYSE:EQT) posted Q3 results. Adjusted EPS in the quarter came in at $0.30, beating estimates by $0.40. Revenue fell a whopping 43% in the period on a YoY basis, still beating estimates by $30 million. EQT Corporation (NYSE:EQT) also increased its base dividend by 5%.
ClearBridge Mid Cap Growth Strategy made the following comment about EQT Corporation (NYSE:EQT) in its Q2 2023 investor letter:
“The energy sector was another positive contributor, primarily driven by our investment in EQT Corporation (NYSE:EQT). As North America’s leading natural gas provider, EQT had seen its share price slide as the lackluster reopening of China and a milder-than-expected winter in the northern hemisphere weighed on natural gas prices. However, as recessionary fears have given way to optimism and the prospect for greater energy demand, EQT’s share price has rebounded. While we continue to expect volatility in commodities prices, we believe that global energy demand, especially in Europe, along with the company’s leadership position in the natural gas market, make it a strong long-term compounder for the portfolio.”
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Disclosure: None. Top 30 Lowest P/E Ratios of the S&P 500 is originally published on Insider Monkey.
