Written by Daniel Da Costa at The Motley Fool Canada
The stock market has continued to stay hot lately, despite concerns over the Delta variant and a fourth wave of the pandemic. So, there’s no question that finding high-quality value stocks to buy now is no easy task.
At this point, the majority of top companies have recovered long ago, and most of what few stocks that do remain undervalued are still being heavily impacted by the current situation with the pandemic.
So, it’s crucial to be strategic when looking for value, making sure that the risk is worth the reward and that the stock has the ability to recover.
It’s also crucial to find stocks that can recover in the near term. Otherwise, you have the risk of tying up your money in a stock that underperforms while the rest of the market continues to grow. Or worse, if you buy a stock that’s really struggling, it could continue to lose money over the coming months.
With that in mind, here are two of the very best value stocks for investors to buy now.
A great opportunity to buy an incredible long-term investment
Manulife is a massive Canadian insurance company with a market cap just shy of $50 billion. The stock has insurance and wealth management operations in several countries, including Canada, the U.S., and China.
One of the main factors that impact a massive insurance company like Manulife’s bottom line is interest rates. And while rates are low, these companies have a harder time earning a profit.
That’s allowed the stock to become considerably cheap lately, offering an excellent opportunity for investors looking for a high-quality value stock to buy now.
Interest rates will have to rise eventually, and with the economy recovering well recently, it looks like that might be sooner rather than later.
And on top of the potential Manulife has to recover in value, it also has years of growth potential, especially in Asia, making it a great investment for long-term investors.
Not only does the stock pay a dividend that currently yields 4.6%, but its average target price from analysts is roughly $32 — a more than 30% premium to today’s market price.
So, if you’re looking for a high-quality value stock to buy now, Manulife is certainly worth consideration.
One of the top value stocks to buy now
In addition to Manulife, another industry where you can find some of the best value stocks to buy now is gold.
Gold is an asset that many investors like to allocate 5-10% of their portfolio to. And there may not be a better time to buy gold than this market environment.
Barrick is one of the best stocks to consider in the industry because of its massive size and the natural diversification it offers. Barrick has operations all over the world, giving it a tonne of strategic advantages.
The main reason to buy Barrick, though, is because it’s easily one of the top value stocks to buy now.
You could argue that Barrick is undervalued at these gold prices. But with plenty of catalysts for gold prices to increase, it has the potential for a significant rally in the short term.
Analysts seem to agree. All five analysts that cover the stock have Barrick rated a buy. Furthermore, the average target price from analysts is roughly $34.50 — a 35% premium to today’s price.
So, if you want to take advantage of this incredible discount and gain some exposure to gold while it’s still relatively cheap, I’d strongly consider Barrick today. It’s easily one of the best value stocks to buy now.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.