5 Cheap Value Stocks For Today's Volatile Market

By Maher Syed of Zacks.com

Friday, August 14, 2015 3:48 AM EDT

In about seven and a half months, the S&P 500 has picked up a meager 1.3%. Indeed, 2015 just hasn’t been a break-out year for stocks. Have you found your growth picks staying stagnant or struggling to break free from the economic and industrial worries surrounding them?

If that’s the case, a different strategy may be a better way to approach the sideways market. History has shown that value stocks tend to appreciate over time, all while experiencing less volatility than growth stocks. Now, you may not end up having as large a return as some growth stocks. However, avoiding the risk that comes with them may very well be worth it as stocks trading at higher multiples tend to be much more sensitive to any kind of bad news.

Below, we outline 5 incredible dividend paying value stocks with Value Scores of “A”. They all trade at price to books below three, which suggests that they are trading at a discount. Each of these stocks also trade at a forward PE under 14. They all operate within the top 100 industries (out of 265). Stocks within the top half of all industries tend to outperform the bottom half by a considerable margin. Without further ado, let’s jump into these buy ranked value stocks which look like promising investments for the long run.

Ford Motor Company-(F - Analyst Report)

Unlike General Motors (GM - Analyst Report), Ford did not need a bailout in the financial crisis of 2008. Ford is a Zacks Rank #2 (Buy). The company operates in the domestic auto segment. Domestic auto looks like a great place to be, especially when it is ranked 14th out of 265 industries.

Ford trades at a forward PE of 8.73. It’s worth noting that the company doles out a dividend yield of 4.09%. It is reassuring to see that Ford trades at a PEG of 0.5. A PEG under one suggests that a company is undervalued. The company also has a price to book of 2.25.

In the last 60 days, 9 analysts have revised their earnings estimates upwards for the quarter. Only 2 analysts revised their estimates lower. Ford has beaten our earnings estimates in three of the last four quarters. It has beaten each quarter by an average of 34.29%. Ford reports its earnings on 10/27/15.

The Hanover Insurance Group, Inc-(THG - Snapshot Report)

The Hanover Insurance Group offers property and casualty insurance to businesses, individuals, and families. The stock holds a Zacks Rank #2 (Buy). It has a strong industry rank of 89/265. It’s worth noting that the company has beaten our earnings consensus in each of the last four quarters by an average of 18.41%.

THG is a valuable buy with a forward PE of 13.72. It also doles out a 2% dividend. Hanover has a price to sales of 0.7, which is much better than the industry’s P/S of 1.16. THG sells at a P/B of 1.23. The company reports its earnings on 11/4/15.

The Travelers Companies, Inc-(TRV- Analyst Report)

The Travelers Companies provides property and casualty insurance for homes, autos, and businesses. The stock is a Zacks Rank #2 (Buy). The company has an ROE of 14.32%, which is much higher than the industry average of 8.7%.

The Travelers dole out a 2.31% dividend. It trades at a P/S of 1.22. Its price to book of 1.37 suggests that this company may be overlooked in the stock market. TRV has a PEG of 1.43. The company reports its earnings on 10/20/15.

Western Refining, Inc-(WNR - Analyst Report)

Western Refining operates in the oil refining and marketing segment. Like every stock in this article, it has an “A” for Value in the Style Scores. It has a Zacks Rank #2 (Buy). Oil refining is a great place to be, especially since it has a Zacks Industry rank of 41/265.

Western Refining trades at a forward PE of 10.47. It also has a 2.71% dividend yield. The stock trades at a P/B of 1.6. Additionally, the stock trades at a price to sales of 0.39. Western Refining has seen 10 analysts revising their earnings estimates in the last 60 days, and all but one have revised their estimates higher for the quarter. 90 days ago, our earnings consensus expected earnings of $1.09 per share for the quarter. Now, our consensus expects earnings of $1.41 for the quarter. WNR has beaten our earnings consensus in each of the last four quarters. The company reports its earnings on 11/3/15.

Aircastle Ltd-(AYR - Snapshot Report)

Aircastle owns and leases out its commercial jet aircraft to passenger and cargo airliners throughout the world. The stock has a Zacks Rank #2 (Buy). Aircastle has a net margin of 21.72%.

The company gives shareholders dividends of 3.78%. They also have a price to book of 1.07. The EV/EBITDA is especially encouraging, as it is only 2.26. Aircastle has a PEG of 1.27, and trades at a price to cash flow of only 3.96. It trades at a price to sales of 2.35.

Aircastle has beaten our earnings consensus in three of the last four quarters. Its quarterly beat in the last four quarters averaged out to be 46.68%. The company reports its earnings on 11/3/15.

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