November is shaping up to be a volatile month, with the U.S. election underway (the result of which may be known by the time you’re reading this piece) and a slew of other question marks that are sure to move markets in either direction. As always, there is no shortage of those in the bull and bear camps. Berkshire Hathaway (NYSE:BRK-B) recently disclosed they’ve sold even more stock — the Apple (NASDAQ:AAPL) position has come down yet again.
To some, that’s an ominous sign for stocks. For others, it’s a sign that Treasury bills are a better place to park cash for the time being. For others, there is really nothing to get nervous about, especially since Warren Buffett himself remarked on the possibility that capital gains taxes will rise. We’ll never really know what to make of Buffett’s recent share sales until after the fact.
In any case, I wouldn’t react one way or another, especially if your portfolio is balanced. While the valuation of the S&P 500 is running a tad hot, I do think there’s an opportunity for investors to uncover value with some of the less-heated names. In this piece, we’ll look at a few names with strong dividends and enticing valuations.
Key Points About This Article
- Intel and Home Depot are cheap stocks with nice dividends.
- Whether you’re in it for the value or the dividend, both blue chips look intriguing.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Intel
Intel (NASDAQ:INTC) was kicked out of the Dow Jones Industrial Average last week, and, to many, the move was not surprising. For years, INTC stock has struggled to gain traction as other up-and-coming chip rivals took share. Indeed, Intel’s exclusion from the Dow may be an ominous sign for some. However, getting kicked out of the Dow isn’t exactly a bearish indicator. After tumbling close to 3% on the Monday trading session that followed, I’d argue that INTC stock is the most unloved it’s ever been.
At writing, shares of INTC yield 2.22%. The main attraction to Intel isn’t the dividend, though. It’s the turnaround story, one which has had no shortage of bumps in the road. It’s tough to get bullish on Intel after getting the boot from the Dow.
That said, with a stronger-than-expected quarter and a side of rosy guidance being recently issued, I do think betting on Intel at these depths can make sense. In 2025, the company should make fundamental improvements to its foundry business. And if the next generation (think Lunar Lake and Arrow Lake on the 3nm process) chips hit the spot, perhaps Intel will have the groundwork for a comeback.
Either way, there’s a chance the stock can prove it’s severely undervalued here. Still, the firm has a lot to prove. Perhaps buying on strength could make sense more than buying on the way down. Though, of course, that would leave a great deal of gains on the table.
Home Depot
Home Depot (NYSE:HD) is the home improvement juggernaut that will live to see better days once the housing market picks up. Until then, there’s a nice 2.3% dividend yield to collect. Perhaps Mad Money host Jim Cramer put it best: Home Depot is a “secular and cyclical” stock.
On one hand, the company is innovating in a way that can help it better seize the inevitable upswings while navigating the tougher tides. On the other hand, its success still hinges on the state of the housing market and demand for home improvement projects. While such discretionary firms may not be for everyone, I do think HD stock is worth checking out if you’re going to be in the name for the long haul.
At writing, shares of HD trade at 26.4 times trailing price-to-earnings (P/E) — not too high a price to pay for one of the leaders in the space. Though the much-awaited HD stock breakout faltered in mid-October, I wouldn’t view the 5.5% dip as a sign it’s time to bail. Of course, we’ll have to wait and see how the firm reports next week (November 12, 2024).
Perhaps more Fed rate cuts could be a boon for Home Depot over the next two to three years. Lower borrowing costs could mean more incentive to borrow to invest in renovations around the house. Either way, Home Depot is a top-notch blue chip that will break out in due time.
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