Chevron: A Promising Energy Stock with Strong Dividend Yield
Chevron (NYSE: CVX) is one of the largest energy companies in the world. Despite facing some challenges in 2023, including production shortfalls in its oilfields and an expensive acquisition of Hess (NYSE: HES), Chevron’s stock is currently trading at an attractive valuation. With a price-to-earnings ratio of only 10.8 times projected 2024 earnings, the stock is considered undervalued by many investors.
Furthermore, Chevron plans to repurchase $20 billion worth of shares annually, which should provide additional value to shareholders. This, combined with its cheap valuation, gives Chevron the potential for a total return (dividends + buybacks) of around 12% after the Hess deal closes.
What’s more, Chevron offers a strong dividend yield of 4.04%. This makes it an appealing choice for income-seeking investors who are looking for reliable dividend payments. The company has a history of consistently increasing its dividend over the years, making it a stable and attractive investment option.
On February 2, Chevron will release its quarterly earnings report, where it is expected to show growth in earnings per share (EPS) of 4.9% for 2024. Analysts seem optimistic about the stock, with 19 out of 25 ratings being buy recommendations.
While the market sees potential for Chevron at $178.53, InvestingPro models project a slightly lower value of $171.47. Nevertheless, both figures indicate that Chevron has room for growth and offer a compelling investment opportunity.
Alibaba: A Tech Giant with Attractive Valuations and Growth Potential
Alibaba (NYSE: BABA) is often regarded as one of the cheapest tech companies in the world. Its U.S.-listed shares are currently trading at just eight times projected earnings for the fiscal year ending in March. This low valuation presents an opportunity for investors to benefit from potential appreciation in the stock price.
Aside from its attractive valuations, Alibaba has a diversified revenue stream, which includes its e-commerce unit in China, logistics and cloud computing businesses, and a stake in Ant Financial. Combining all these factors, the sum of Alibaba’s parts is estimated to be around $130 per share, nearly double its current share price.
Alibaba also offers a modest dividend yield of 1.34%, adding a potential income component to investors’ returns. While the yield might not be as high as some other companies, Alibaba’s focus on reinvesting in its growth has provided significant value to shareholders over the years.
On January 31, Alibaba will release its accounts and earnings per share (EPS) are expected to increase by 6.34% for the fiscal year ending in March. Looking ahead to 2024, analysts anticipate a further EPS growth of 14.5% and revenue growth of 5.5%.
The market gives Alibaba a potential price target of $124.73, while InvestingPro models project a slightly lower value of $113.96. These figures suggest that Alibaba offers a strong growth potential and could be a rewarding investment for the long term.
Hertz Global: A Car Rental Stock for Patient Investors
Hertz Global (NASDAQ: HTZ) may have faced some setbacks due to its big bet on electric vehicles, but it still remains an interesting investment opportunity. Despite earning less than expected, Hertz’s stock is currently trading at a low price with a projected price-to-earnings ratio of 8.6 for 2024.
It’s important to note that the car rental sector is dominated by three major players: Enterprise, Avis, and Hertz. As such, even with earnings estimates being revised down, Hertz still offers an attractive investment for patient investors. The company’s market value is currently lower than it was five years ago, making it a potential value play.
Hertz does not distribute a dividend, so investors should consider this when looking at the stock for their portfolio.
On February 26, Hertz will announce its quarterly results. Analysts expect the company to increase its revenue by 4.15% for the quarter and by 4% for the fiscal year 2024.
The market sees potential for Hertz at $13.50, while InvestingPro models project a more conservative value of $11.89. While the expectations might be divided, there is no doubt that Hertz presents a compelling investment opportunity for patient investors willing to ride out the ups and downs of the sector.
Madison Square Garden Sports: Undervalued Investment Opportunity in the Sports Industry
Madison Square Garden Sports (NYSE: MSGS) is a company that owns two highly valuable professional sports teams: the New York Knicks and the Rangers. According to Sportico estimates, the Knicks and Rangers are worth $7.4 billion and $2.45 billion, respectively. Surprisingly, the company’s market value is currently only $4.2 billion, half the estimated value of the teams.
Despite owning these valuable assets, Madison Square Garden Sports’ stock is below where it was five years ago, presenting an attractive opportunity for investors.
However, it is important to note that Madison Square Garden Sports does not distribute a dividend, so investors should consider this aspect when evaluating the stock.
On February 2, the company will announce its quarterly earnings. Analysts expect an earnings per share (EPS) growth of 6.4% for 2024. This positive outlook indicates that Madison Square Garden Sports has the potential for significant growth in the coming years.
Madison Square Garden Sports currently has six ratings, with four being buy recommendations and two as hold recommendations. The market sees a potential price target of $244.60 for the stock, indicating significant growth potential.
Pepsico: Diversify Your Portfolio with this Beverage and Snack Franchise
Pepsico (NASDAQ: PEP) is a global beverage and snack company known for its iconic brands such as Pepsi, Lay’s, Gatorade, and Tropicana. While the impact of weight-loss drugs on the company’s snack and beverage franchise is expected to be minimal, Pepsico’s stock is trading at an attractive valuation.
With a price-to-earnings ratio of 20.7 times projected 2024 earnings, Pepsico’s stock is trading below its five-year average. This signals an opportunity for investors to buy the stock at a discount.
Pepsico also offers a dividend yield of 3%, making it an appealing choice for income-seeking investors. The company has a track record of consistently increasing its dividend, providing reliable income to shareholders.
On February 9, Pepsico will release its quarterly accounts. Analysts forecast a growth in earnings per share (EPS) of 7.9% for 2024, along with revenue growth of 4.7%.
InvestingPro models see potential for Pepsico at $191.91, indicating opportunities for appreciation in the stock price.
In summary, Chevron, Alibaba, Hertz Global, Madison Square Garden Sports, and Pepsico are five stocks that offer promising investment opportunities in different sectors. These stocks provide exposure to the energy, technology, car rental, sports, and snack and beverage industries, respectively. While investing in stocks always carries risks, thorough analysis and understanding of the market dynamics can help investors make informed decisions and maximize their potential returns.
Analyst comment
Chevron: Positive news. Chevron’s stock is undervalued with a strong dividend yield, potential for a 12% return, and positive earnings growth. The market expects growth.
Alibaba: Positive news. Alibaba’s stock is attractively valued with a diversified revenue stream, potential for appreciation, and expected EPS and revenue growth. The market sees strong growth potential.
Hertz Global: Neutral news. Hertz’s stock is trading at a low price with a projected low PE ratio, but it faces challenges. Dividend is not offered. Earnings and revenue growth are expected. Mixed expectations in the market.
Madison Square Garden Sports: Positive news. Despite owning valuable assets, the stock is undervalued. No dividend offered. Earnings growth is expected. Market sees significant growth potential.
Pepsico: Positive news. Pepsico’s stock is attractively valued, offers a dividend, and has consistent dividend growth. Positive earnings and revenue growth are expected. Potential for appreciation in the stock price.
