7 Best Value Stocks to Buy if You Need Some Market Stability in Your Life

Weakness and long-term fear make investing in value stocks a strong idea right now.

Target ( TGT ): Earnings have been strong and Target is fundamentally strong.

D.R. Horton ( DHI ): Forces are in place for this home builder to continue to perform very well.

Deere ( DE ): Has plenty of tailwinds as well as built-in upside.

AbbVie ( ABBV ): Increased guidance and rock-solid dividend make AbbVie a buy.

Berkshire Hathaway ( BRK-A , BRK-B ): The value investing world will always consider the ever reliable Berkshire Hathaway.

Procter & Gamble ( PG ): In tough times consumer staples giants including Procter & Gamble are often strong bets.

Coca-Cola ( KO ): Coca-Cola makes sense for many of the same reasons as Procter & Gamble.

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There’s a strong case to be made that value stocks are back to being a smart choice. Growth stocks have proven incredibly volatile in an environment of rising interest rates. According to one source, tech giants, part of the tech sector that largely defines growth stocks, shed more than $1 billion in value over the period from May 6 to May 9.

The impetus for the sell-off was of course the Federal Reserve’s decision to raise its benchmark rate. Each time the Fed raises its benchmark rate, tech receives another blow. Fears about this relationship began to crop up at the end of 2021 when inflation fears initially surfaced.

Those fears galvanized a pivoting away from growth stocks and tech in particular. That meant and continues to mean there is an opportunity for value stocks afoot.

TGT Target $215.28 DHI D.R. Horton $70.46 DE Deere $384.26 ABBV AbbVie $154.78 BRK-A BRK-B Berkshire Hathaway $314.60 PG Procter & Gamble $154.68 KO Coca-Cola $65.78 Target (TGT)

As I write this, on May 12, the Dow Jones continues its downward slide, falling by more than 1%. But big-box retailer Target (NYSE: TGT ) is proving to be a bright spot amid the continued bad news. It has risen by more than 1% on the day.

It has proven to be a relatively stable stock throughout 2022 although it is down from $231 to $216. Let’s look at it from both a growth perspective and a value perspective in order to understand why it makes sense to invest right now.

From a growth perspective, Target has consistently shown over the past four quarters that it has the ability to surprise. In each of those past four quarters the Minneapolis-based company has bested consensus earnings-per-share (EPS) expectations. In fact, in the last quarter Target surprised the market with EPS figures that outpaced expectations by 11.54% . There are strong indications that the company could surprise positively again on May 18 when it releases earnings again. Thinking more broadly, Target is a prime pick among value stocks because its EPS expectations indicate that it will continue to grow through at least 2026.

From a fundamental value perspective, there’s also a good reason to invest in TGT stock: its current price-to-earnings (P/E) ratio of 15.46 is better than the current P/E ratio of the S&P 500 which stands at 15.97. D.R. Horton (DHI)

D.R. Horton (NYSE: DHI ) Is a firm with a fairly straightforward business model: it buys land, builds residential homes on that land, and sells them.

Given that housing prices are undergoing a boom it makes sense to consider DHI stock. However, interest rates are rising and that means that there is potential for a slowdown in the market.Granted, D.R. Horton does face a significant headwind that will very likely be affected negatively in the near term. However, there are a few important counterpoints to this idea.First of all, back at the end of April, the company raised its sales forecast citing the strong housing market. Although that news was given prior to the most recent interest rate increase the company was clearly aware that rate hikes were coming.That positive forecast came on the heels of a second-quarter earnings beat by the company. D.R. Horton posted $4.03 EPS figures, well ahead of the $3.38 the market was anticipating.The other reason to be positive on DHI stock is that thinking longer-term, the building boom is unlikely to taper despite rising interest rates. According to data from Realtor.com , the U.S. was short 5.24 million homes in September of 2021. that figure was up roughly 1.4 million from 2019. That strongly indicates that builders, including D.R. Horton, are going to have plenty of work […]

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