The roller-coaster market of 2016 has tossed a lot of companies around. We've identified five that have good long-term prospects but have valuations (sometimes due to recent setbacks) that spell good growth potential — and solid dividend yields to cash in on while you wait for their shares to appreciate.
Prices and other data are as of June 8.
- Symbol: AMPShare price: $101.4452-week range: $76.00 - $130.69Earnings per share: Current year: $9.43, next year: $10.99Price-earnings ratio: 10
- SEE ALSO: 6 Great ETFs for Holding Value Stocks
The firm is transitioning from a life insurer to an investment powerhouse, with more than $800 billion in assets under management. Worries about the impact of the Department of Labor’s new fiduciary rule for advisers have weighed on the stock, but any additional regulatory hurdles won’t impair the business significantly, says Mark Finn, manager of the T. Rowe Price Value fund. The shares sell for 10 times estimated earnings and yield a healthy 3.0%.
- Symbol: AAPLShare price: $98.9452-week range: $89.47 - $132.97Earnings per share: Current year: $8.27 (FY ending September 2016), next year: $9.11 (FY ending September 2017)Price-earnings ratio: 12 (based on estimated earnings for the next four quarters ending March 2017)
You can debate whether the iPhone 7, expected to launch this fall, will be a blockbuster or a dud, but Apple’s stock, down 12% since mid-April, is trading as though the company’s legendary smartphones are facing a long-term decline. Sales of iPhones may not be growing as rapidly as they once did, but demand is more resilient than the stock implies, says Morningstar analyst Brian Colello. Meanwhile, Apple generates tons of cash, which it shares via stock buybacks and a rapidly growing dividend. The stock yields 2.3%.
Capital One Financial
- Symbol: COFShare price: $72.1052-week range: $58.49 - $92.10Earnings per share: Current year: $7.54, next year: $8.18Price-earnings ratio: 9
- SEE ALSO: Best Low-Volatility Stocks for the Next Bear Market
Credit cards still supply the bulk of Capital One’s profits, but the company is evolving into a diversified commercial and consumer lender. Loan growth has room to run before credit losses start to accelerate. We’re in the bottom of the third inning when it comes to the credit cycle, says Morgan Stanley. Yet the stock trades at just 9 times estimated year-ahead earnings and yields 2.2%.
Ford Motor Co.
- Symbol: FShare price: $13.3652-week range: $10.44 - $15.84Earnings per share: Current year: $2.09, next year: $2.13Price-earnings ratio: 6
A pickup in gasoline prices hasn’t kept buyers away from Ford’s vehicles—April’s U.S. sales were the best in a decade. The country’s second-largest carmaker is keeping a lid on costs, improving economies of scale by building more models on common platforms and pruning the product mix to focus on its Ford and Lincoln brands. The stock yields 4.5%, and S&P Capital IQ sees the annual payout rate of 60 cents a share heading higher.
- Symbol: MSFTShare price: $52.0452-week range: $39.72 - $56.85Earnings per share: Current year: $2.66 (FY ending June 2016), next year: $2.89 (FY ending June 2017)Price-earnings ratio: 19 (based on estimated earnings for the next four quarters ending March 2017)
- SEE ALSO: 7 Good Utility Stocks Paying Steady Dividends
Shares of the desktop-software giant took a one-day hit of 7% in April after the company reported disappointing quarterly results. But a shift in focus from a weakening personal-computer market to the company’s rapidly growing cloud business holds promise. “The cloud is a huge opportunity,” says T. Rowe Price’s Finn. Yield is 2.8%.
Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.
The Divorce Gap: Unique Retirement Issues for Women Over 50
The shocking loss of income and retirement savings that disproportionately affect divorced women is a big challenge – especially for those over 50.
By Stacy Francis, CFP®, CDFA®, CES™ • Published
4 Steps for Managing Income Withdrawals in Retirement
Investing for Income How Roth IRA conversions can help you minimize your taxes in retirement, extending the life of your savings.
By Kyle Hammerschmidt, Investment Adviser • Published
10 High-Paying Dividend Stocks Yielding 5% or More
dividend stocks Not all high-paying dividend stocks are created equal, but investors wanting impressive yields should consider these 10 quality picks.
By Will Ashworth • Published
Playing Favorites: 5 Top Stocks for Inflation
stocks Higher prices have been a major headache for investors this year, but these top stocks could help ease the impact of inflation.
By Louis Navellier • Published
The 21 Top S&P 500 Stocks Since the Bear-Market Bottom
stocks Growth stocks have been some of the best performers since the June low.
By Dan Burrows • Published
11 Consumer Stocks for Inflationary Times
stocks to buy Consumer spending may be cooling due to inflation, but these stocks should deliver the goods to investors.
By Jeff Reeves • Published
ETFs Are Now Mainstream. Here's Why They're So Appealing.
Investing for Income ETFs offer investors broad diversification to their portfolios and at low costs to boot.
By Nellie S. Huang • Published
10 Best Low-Volatility Stocks to Buy Now
stocks One way for investors to hedge during broad-market downturns is with low-volatility stocks. Here are 10 to consider.
By Michael Adams • Published
7 Common Investing Myths, Debunked
investing The "conventional wisdom" is sometimes anything but. Financial experts dissect seven frequently touted lines of bad advice.
By Coryanne Hicks • Published
5 Exciting Emerging Markets Funds to Buy
Foreign Stocks & Emerging Markets Emerging markets funds haven't been immune to global inflationary pressures. But now might be the time to strike on these high-risk, high-reward products.
By Kent Thune • Published