2 safe stocks to buy with $ 500 now

gRowth’s stocks have reigned supreme for much of the past decade, but there are signs the market is about to rediscover his love for value stocks. This might be a good time to invest in companies that are trading at low earnings and sales multiples and showing large dividends.

While they tend to be less flashy in some ways, value stocks don’t have to be boring and they have the potential to generate overwhelming returns for the market if bought at low prices. opportune times. Read on to discover two companies that have what it takes to be winners for your portfolio.

Image source: Getty Images.

Verizon

Verizon (NYSE: VZ) recently received a huge vote of confidence from one of the most famous value investors in history, Warren Buffett. Buffett and Berkshire Hathaway bought a nearly $ 9 billion stake in the telecommunications giant in the fourth quarter of last year, immediately making it the investment conglomerate’s sixth-largest stock portfolio. This is quite the vote of confidence from the Oracle of Omaha, and there are compelling reasons to be bullish on the company’s actions.

On the one hand, Verizon has a great brand. Brand Finance research has ranked Verizon as the most valuable brand in telecommunications, and the company estimates the company has increased its brand value by around 8% over the past year and ranks among the 10 most valuable brands in the world.

The company operates the largest wireless network in the United States and frequently wins accolades for network performance and customer service. For example, RootMetrics has ranked the company as the # 1 network provider in the United States for 14 consecutive years. Network connectivity will only become more and more important in business and everyday life, and Verizon looks set to generate growth as it provides top-notch service in the category.

Verizon will have opportunities to capitalize on the adoption of 5G in consumer and enterprise markets. It may also have underestimated growth opportunities in related markets, including advanced computing and digital advertising, which will play an increasingly important role in data distribution amid the explosive growth of connected devices. and video content.

Verizon stock is trading at around 10 times this year’s expected earnings and has a dividend yield of 4.6%. The company has a strong business built around its core communications services, and it should be able to withstand market volatility and deliver strong results despite thick and thin economic conditions. For investors looking for high dividend stocks, Verizon has the makings of a great portfolio addition.

Hanesbrands

Hanesbrands (NYSE: HBI) is a solid player in the apparel and apparel business, and it looks like the stock has what it takes to be a long-term winner. The company was able to adapt fairly quickly to the pandemic conditions and mitigated the negative effect on the company with a cleverly orchestrated pivot in the production of protective clothing.

Masks and other protective gear won’t be a significant part of the business going forward, but performance in the category has been impressive, and the business is poised to emerge even stronger as the world heats up. recovering from the pandemic.

Hanesbrands has embarked on a major cost reduction initiative and is emerging as a more effective competitor in the clothing and apparel industry. The company will likely shut down or pull resources from underperforming brands, simplifying the business and putting it on a better path to grow profits over the next decade and beyond by focusing on its strongest categories.

The company’s Champion brand has shown impressive performance in recent years and is at the center of the turnaround effort. The brand seems to have the makings of a long-term growth engine. To be clear, Champion is not on par with names like Nike Where Adidas, but its resurgence is clearly not a flash in the pan at this point, and there is good scope for continued long-term growth.

Retail disruptions and the shift from schools to home classes over the past year have put pressure on sales for the brand and Hanesbrands in general, but the company is expected to benefit from the resumption of sales in the UK. detail after the pandemic. He is positioning resources to better drive brand growth, and continued online retail and direct-to-consumer initiatives should help increase overall margins.

The stock looks cheap, in line with expected sales this year, trading at around 11 times expected earnings and paying a 3.1% dividend.

10 stocks we prefer over Verizon Communications
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *

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* The portfolio advisor returns on August 9, 2021

Keith Noonan owns shares of Hanesbrands. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares) and Nike. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2023 calls of $ 200 on Berkshire Hathaway (B shares), short January 2023 $ 200 put on Berkshire Hathaway (B shares) and short January 2023 calls of $ 265 on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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