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3 stocks with growth potential that are undervalued by more than 10%

David Boulder
1. 5. 2024
4 min read

These three companies have a long history of stable payouts and excellent adaptation to market changes, which may make them attractive. Despite recent downturns, these companies show the potential for rapid recovery and long-term growth, thanks to their strong fundamentals and strategic initiatives.

Now that their shares are available at discounted prices, new opportunities are opening up for investors. This period may be seen as an opportune time for those seeking quality stocks at more attractive prices, with analysts expecting that growth may follow as the market environment gradually stabilizes.

PPG Industries $PPG-0.3%

PPG Industries, a recognized leader in paint and coatingsis undergoing strategic changes and restructuring to strengthen its competitiveness and increase profitability. The company, which reported 2023 revenues in excess of $18 billion, is now undergoing a divestiture of its architectural coatings segment in the US and Canada, which generates annual revenues of $1.8 billion. The move is in response to a decline in demand in the DIY (do-it-yourself) segment, which the company sees as a long-term trend. PPG will, however, retain its operations in this segment in Asia, Europe and Latin America, where it expects to perform better, particularly due to strong growth in markets such as Mexico.

$134.40 -$0.38 -0.28%
Fair Price: $218.89
Zmlrmk: 57.73%
Dostupné pouze členům Bulios Black

Within its portfolio, PPG is actively pursuing opportunities to streamline operations. The recent sale of its European signage business is an example of its efforts to focus on the most profitable parts of its business. This strategy not only helps PPG increase its operational efficiency, but also allows the company to allocate resources to the development of newinnovative products and technologies that can strengthen its market position over the long term.

$134.40 -$0.38 -0.28%
Target Price
160.42 (+19.36% Upside)

PPG Industries is known for its long history of paying dividends, a tradition that dates back to 1899. Despite the current challenges and the stock's decline in 2023, PPG has maintained a stable dividend yield of around 1,9 % and continues its policy of regular dividend increases, a practice the company has maintained for 52 years. This financial resilience and ability to generate regular cash flow, even in times of economic turmoil, may make PPG an attractive option for conservative investors seeking safety and stability in volatile times.

Archer-Daniels-Midland $ADM+0.0%

Archer-Daniels-Midland, one of the leading global companies in agribusinessis known for its extensive portfolio of agricultural products and services. Headquartered in Chicago, Illinois, the company processes grains and oilseeds into food, animal feed, industrial products and biofuels. In 2023, ADM saw a minor decline as its total revenues reached $93 billion, representing 7% decline from the previous year.

$61.62 $0.03 +0.05%
Fair Price: $62.04
Svdrkp: 61.88%
Dostupné pouze členům Bulios Black

ADM is constantly looking to expand its business operations and enter new markets. Recent Acquisitionssuch as the takeover of Neovia, a provider of livestock solutions, for $1.7 billion in 2019, have further expanded its presence in the animal nutrition sector and strengthened its position. In addition, ADM is investing in innovations and technologies that support the sustainability and efficiency of their operations. In 2020, the company launched new technology centre in Chicago, focused on developing new products and solutions for food processing and biotechnology.

$61.62 $0.03 +0.05%
Target Price
95.17 (+54.45% Upside)

In the area of financial performance, Archer-Daniels-Midland has consistently demonstrated its ability to generate strong cash flow, allowing it to maintain a competitive dividend payout. In 2023, the company reported free cash flow in excess of 2.9 billion billion, a significant increase from $2.1 billion in the prior year. With this financial strength, it was able to increase its quarterly dividend, solidifying its position with over 50 years of uninterrupted dividend growth.

Kenvue $KVUE-0.6%

Kenvue, which was recently spun off from Johnson & Johnson $JNJ+0.2%, represents one of the newest players in the consumer goods space , but already boasts a long history of paying and raising dividends. Although it has only been on the market independently for a short time, it carries the rich history of its parent company. This company manages a portfolio of well-known brands such as Tylenol, Listerine and Band-Aid that are deeply rooted among consumers.

Kenvue stock faced challenges in 2024, including the negative impact of unfavorable exchange rates and stagnation in the Chinese market, which led to lower-than-expected results. The company expects earnings per share in the range of $1.10 to $1.20 this year, which is below estimates analysts' estimate of $1.26 per share. Although the news caused the stock to drop by 11,5 %, the fundamental strength of Kenvue's brands and their popularity could ensure a quick recovery.

$20.47 -$0.13 -0.63%

Kenvue continues to implement strategies that should ensure growth and sustainability in the coming years. The company is investing in marketing and innovation activities to strengthen its position and respond to changing consumer preferences. With a dividend yield 4,2 % and expectations stable cash flow, Kenvue can provide investors with an attractive opportunity to buy shares at a discounted price.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis on your own.


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