Barron’s screened the S&P 500 index and identified the 10 stocks with the lowest price-to-earnings ratios using 2022 profit projections, based on FactSet data.
Several of the stocks have had big gains over the past year, including Diamondback, Micron, and Lincoln National, but all remain cheap based on earnings. Western Digital, at around $61, is a leading maker of flash memory. Morgan Stanley analyst Joseph Moore is upbeat on its prospects, giving the stock an Overweight rating and a $88 price target. He thinks the stock is too cheap given that he expects earnings of $10 a share next year.
Viatris, a generic drugmaker spun off from Pfizer , has the lowest P/E in the S&P 500 at 3.9. Its shares recently traded below $15. Diamondback Energy, a leading exploration and production company in the Permian basin in Texas, has seen its shares drop to a recent $70 from $100. The company reported strong second-quarter results and boosted its dividend by 12.5% to an annualized $1.80 a share. The stock now yields about 2.6%.
Evercore ISI analyst Stephen Kim, one of the most bullish Wall Street analysts on the sector, sees rising profitability for Pulte and peers. He has an Outperform rating on Pulte and a $93 price target. He sees about $8 a share in earnings this year and an above-consensus estimate of roughly $12 next year.