The stock market has shown some weakness lately. And while it can be discouraging for investors, a pullback can be a great buying opportunity, especially when you hold on for the long term. There is no shortage of deals for investors to consider.
Three stocks trading at incredibly cheap valuations today are CVS Health (NYSE:CVS), Carnival Corp. (NYSE:CCL)And Toronto-Dominion Bank (NYSE:TD). Here’s a closer look at why you’ll want to consider stocking up on these stocks now.
CVS Health
CVS Health has evolved over the years from a pharmacy retailer to a much broader health care company. And the company continues to strive to expand and diversify. Last year, it acquired home health care company Signify Health to expand its healthcare knowledge and help meet the growing needs of seniors with home care options .
And in 2023, the company reported a profit of $8.3 billion on revenue of almost $358 billion. This truly massive activity will gain momentum in the future. And while its margins may not be huge, they’re enough to fund the company’s dividend, which yields 3.8%, and for CVS to pursue growth opportunities. Its free cash flow last year was $10.4 billion, and CVS paid out just $3.1 billion in dividends.
At a very low price forward price/earnings multiple (based on analyst estimates) of just 8.4, CVS Health stock today could look like a bargain in a few years.
Carnival Corp.
Another good long-term option for investors to consider is cruise operator Carnival Corp. Without the shutdowns during the pandemic, the company would not have needed to accumulate so much debt and its stock price would likely be much higher today.
The good news, however, is that Carnival’s financial situation is improving and the company is able to repay its debt, especially as cruise demand remains resilient. In March, the company announced record levels of revenue and bookings for its fiscal first quarter, ending February 29. Revenue during the period increased 22% year-over-year to $5.4 billion, and the company reported operating profit of $276 million (compared with profit of operation of 276 million dollars). loss of $172 million a year earlier).
Carnival has long-term debt totaling $28.5 billion, which could scare off some investors given its more modest cash balance of $2.2 billion. But with its finances moving in the right direction and the company having cash totaling more than $5.2 billion, Carnival is in good health and should be able to reduce its debt over time.
At just 13 times its estimated future earnings, investors are getting the growth stock at a bargain price to help offset the risk of its high debt load. But that risk may be overblown, as the cruise line is doing exceptionally well at a time when many businesses are struggling.
Toronto-Dominion Bank
Leading Canadian bank Toronto-Dominion rounds out this list of cheap stocks. At just 10 times future earnings and less…
