The stock market has been softening. While investors may be discouraged, a retreat can be a terrific purchasing opportunity, especially for long-term investors. Deals abound for investors. Three equities trading at exceptionally low valuations today are CVS Health (NYSE: CVS), Carnival Corp. (NYSE: CCL), and Toronto-Dominion Bank. Let's examine why you should buy these stocks now.
CVS Health CVS Health has grown from a pharmacy retailer to a healthcare company. The organization strives for growth and diversity. It acquired home health business Signify Health last year to expand into healthcare and fulfill seniors' expanding in-home care needs.
In 2023, it earned $8.3 billion on $358 billion in sales. This large business will grow. Despite its low margins, CVS can fund its 3.8% dividend and growth potential. CVS distributed $3.1 billion in dividends last year from its $10.4 billion free cash flow. CVS Health shares could be a steal in a few years at an analyst-estimated 8.4 forward price-to-earnings multiple.
Carnival Corp. Cruise line Carnival Corp. is another long-term investment. Without the pandemic shutdowns, the corporation wouldn't have needed so much debt and its share price would be significantly higher.
However, Carnival's financials are improving and the business can pay down its debt as cruise demand continues strong. For the fiscal first quarter ending Feb. 29, the company announced record revenue and bookings in March. Revenue grew 22% to $5.4 billion, and the corporation made $276 million (up from $172 million).
Carnival has $28.5 billion in long-term debt, which may worry investors given its $2.2 billion cash balance. Carnival is in good shape and should be able to pay off its debt over time with its financials improving and liquidity above $5.2 billion.
Investors are buying the growth stock at a discount to offset its huge debt load at 13 times its expected future profits. The cruise ship firm is doing well at a time when many businesses are failing, so the risk may be overstated.
Bank of Toronto Leading Canadian bank Toronto-Dominion completes this inexpensive stock list. A quality bank stock can be added to portfolios at 10 times projected earnings and less than 1.4 times book value. Over 10 years, TD has averaged a price-to-book multiple of about 1.7.
Although the stock has declined more than 5% in the past year, it's not a dangerous bank stock like some regional banks. TD is a safe bank stock.
In the quarter ending Jan. 31, TD's revenue was 13.7 billion Canadian dollars, up 12% year over year. Its net income of CA$2.8 billion rose 79%, and its diluted earnings per share of CA$1.55 exceeded its dividend of CA$1.02. TD is a great dividend company to buy now due to its low price and 5.2% yield.