The stock market has enjoyed an impressive rally so far in 2024. The S&P 500 index has risen 14.5%, and the even more technology-heavy Nasdaq Composite has risen 18% across the stretch. Thanks to encouraging earnings results and excitement surrounding artificial intelligence (AI) and other trends, high-profile stocks including Apple, Nvidia, and Amazon have rocketed to new valuation highs.
Some of the market’s hottest stocks could continue to march even higher, but it would be a mistake to overlook opportunities in companies that still trade far below their previous valuation peaks. If you’re on the hunt for investments that offer attractive valuations and strong long-term prospects, read on to see why two Fool.com contributors identified Altria Group (NYSE: MO) and Walt Disney (NYSE: DIS) as top stocks to buy right now.
Altria is a strong defensive stock with a great dividend profile
Keith Noonan: Altria stock has risen roughly 13% year to date, but the company’s share price is still down roughly 41% from its peak. Even though the tobacco giant continues to lead the U.S. market with its Marlboro brand, it’s facing some secular headwinds. Customers continue to move away from cigarettes, and this trend appears likely to continue.
The company’s revenue and non-GAAP (generally accepted accounting principles) adjusted earnings each fell roughly 2.5% due to declining unit sales in the smokable tobacco category. Total cigarettes sold in the period declined roughly 10% year over year. On the other hand, management reaffirmed its guidance for annual adjusted earnings per share to increase between 2% and 4.5%.
Thanks to pricing increases and stock buybacks, Altria has actually managed to increase its earnings per share by roughly 26% over the last five years. While the company faces long-term headwinds due to declining unit volumes, the stock is still attractively valued.
Altria trades at under 9 times this year’s expected profits and pays a dividend yielding 8.6% based on the company’s current share price. What’s more, there’s a very good chance that investors who buy the…
..
