Stocks might be hitting all-time highs, but there still are bargains to be found, especially among the blue-chip stocks in the Dow Jones Industrial Average. The exclusive club of 30 Dow stocks is bristling with names that remain reasonably priced even as the industrial average approaches its own all-time closing high of 26,616.71 set on
Whether they're beaten-down value plays or stocks that don't adequately reflect their companies' long-term earnings growth, plenty of
The
After applying those criteria, these names stand out as great Dow stocks trading a reasonable price.
Apple
Market value: $1.1 trillion
Dividend yield: 1.4%
Forward P/E: 16.5
Analysts' opinion: 10 strong buy, 1 buy, 13 hold, 0 underperform, 0 sell
Just ask
Analysts at
Caterpillar
Market value: $83.4 billion
Dividend yield: 2.5%
Forward P/E: 11
Analysts' opinion: 9 strong buy, 1 buy, 8 hold, 0 underperform, 0 sell
Shares in
Analysts at Credit Suisse, who rate shares at "Outperform" (buy), note that
The analysts add that
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Chevron
Market value: $230.4 billion
Dividend yield: 3.8%
Forward P/E: 13.7
Analysts' opinion: 10 strong buy, 1 buy, 3 hold, 0 underperform, 0 sell
The market might be setting all-time highs, but Chevron (CVX, $120.22) stock sure isn't. It was off 6% for the year-to-date through
The oil-and-gas giant might be lagging the broader market badly this year, but that just makes the valuation too good to ignore, analysts say.
At just 13.7 times expected earnings, Chevron is much cheaper than the S&P 500. It also happens to be a dividend stalwart, having raised its payout every year for 31 consecutive years.
Cisco Systems
Market value: $221.5 billion
Dividend yield: 2.9%
Forward P/E: 14.5
Analysts' opinion: 14 strong buy, 2 buy, 3 hold, 0 underperform, 0 sell
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Intel
Market value: $222.9 billion
Dividend yield: 2.5%
Forward P/E: 11.3
Analysts' opinion: 10 strong buy, 2 buy, 14 hold, 1 underperform, 2 sell
An expanding portfolio of products, as well as frequent product launches, is making Intel (INTC, $48.75) stock more attractive by the day, says
"The company's leading position in PCs, strength in servers, growing influence in software and Internet of Things segments, along with headway in process technology, are all catalysts (for the stock),"
As for the price? With shares trading at just 11.3 times expected earnings, INTC looks like a bargain, the analysts note. That's well below the industry's average of 16.3, and it's also much cheaper than the S&P 500. It's even better when you consider that analysts forecast Intel to generate average annual earnings growth of 10.2% for the next five years.
Travelers
Market value: $35.2 billion
Dividend yield: 2.4%
Forward P/E: 11.6
Analysts' opinion: 5 strong buy, 1 buy, 8 hold, 0 underperform, 3 sell
Travelers (TRV, $132.66), which is one of America's largest writers of commercial property casual insurance and personal insurance, remains reasonably priced based on its growth prospects and historical valuation.
Shares trade at 11.6 times expected earnings, well below the S&P 500 and at a slight discount to their own five-year average of 11.8. That's despite analysts' forecast for average annual earnings growth of 17.6% for the next five years, as well as solid quarterly results.
Analysts at Janney, who rate shares at "Buy," note that the insurance giant reported strong growth, favorable pricing and lower expenses in the second quarter.
Verizon
Market value: $225.5 billion
Dividend yield: 4.3%
Forward P/E: 11.5
Analysts' opinion: 12 strong buy, 1 buy, 7 hold, 0 underperform, 0 sell
The only telecommunications stock in the Dow has more going for it than just a hefty dividend. Analysts, on average, think Verizon (VZ, $54.57) offers superior upside at current levels.
That's certainly been the case in the past. Indeed, Verizon has proven to be one of the 50 best stocks of all time. From 1984 to 2016, it delivered an annualized return of 11.2%, which created $165.1 billion in wealth.
If nothing else, you can depend on Verizon to squeeze blood out of the saturated
At 11.5 times expected earnings, Verizon stock trades at a discount to the broader market. It's also a bargain compared to what investors usually pony up for the stock. Over the past five years, VZ has traded at an average of 12.7 times expected earnings, according to Thomson Reuters Stock Reports.
Dan Burrows is a Contributing Writer for Kiplinger.