4 S&P 500 Stocks Below Book Value And Paying Dividends

These are value stocks and they seldom make exciting headlines like some of the Big 7 that make up the greater part of the Nasdaq 100, but for a certain type of long-term investor, they may make sense. These are mature companies that have been around much longer than, for example, Microsoft
MSFT
or Apple.

Benjamin Graham of Columbia University’s business school wrote about methods for selecting stocks and his student, Warren Buffett, made history in the investment world when he applied them. Value stocks still exist despite this era’s intense spotlight on the growth sectors of tech and social media.

Value Stocks On The NYSE.

Bank of America
BAC
’s market capitalization is huge: $234.72 billion. It trades at 91% of its book value with a price-earnings ratio of 8.31. The Charlotte, North Carolina-headquartered company pays a 3.09% dividend.

This year’s earnings are growing at a 7.75% pace and are up over the past 5 years by 15.36%. Keefe Bruyette in early November upgraded the stock from “underperform” to “market perform” and gave a price target of $29 to $30.

General Motors
GM
can be purchased at a 48% discount from book. Now trading with a price-earnings ratio of 3.92, the company’s market cap comes to $38.21 billion. Investors receive a 1.23% dividend.

Earnings for this year are down by 1.61%. The EPS record for the past 5-years shows an increase of 240.48%. Barclays in early November upgraded the stock from “equal weight” to “overweight” with a price target of $37.

Hewlett Packard, one of the oldest-school of tech names, trades with a price-earnings ratio of 19.14 and at 97% of its book value. Market capitalization for the Spring, Texas-based company sits at $20.04 billion.

This year’s earnings are up by 4.94% and the 5-year EPS growth rate comes in at 25.61%. Citigroup
C
analysts “initiated” coverage of the stock in June with a “neutral rating” and a price target of $18. Hewlett Packard pays a 3.09% dividend.

Truist Financial
TFC
is a regional bank with corporate headquarters in Charlotte, North Carolina. The stock has a price-earnings ratio of 7.94, trades at a 24% discount to book and shows a market cap of $42.12 billion.

In early September, Piper Sandler downgraded Truist from “overweight” to “neutral” with a price target reduced from $36 to $32. In late September, Keefe Bruyette upgraded the stock from “market perform” to “outperform” with a price target of $37 to $36.

Truist is paying a dividend of 6.59%.

Although no guarantees exist, value stocks in general tend to offer less volatility than the growth stocks that lead the Nasdaq 100. That doesn’t mean they don’t sometimes drop in price, but it’s usually at a less heart-pounding pace — and the dividends usually continue to get paid.