After more than a decade of growth stocks outperforming value stocks, that trend has reversed in the past year.
The Vanguard Value Index Fund ETF (NYSE:VTV) has generated a total return of 13.3% in the past 12 months, compared to just a 1.1% total return for the Vanguard Growth Index Fund ETF (NYSE:VUG) in that time. Many investors are expecting the outperformance of value stocks to continue as the Federal Reserve raises interest rates to combat inflation. The good news for investors is that it doesn't take a fortune to start investing in a value stock portfolio today.
Here are five of the best value stocks to buy with as little as $100, according to Bank of America.
PulteGroup, Inc. (NYSE:PHM)
PulteGroup is one of the top three U.S. homebuilders, operating in more than 50 U.S. metropolitan markets.
Analyst Rafe Jadrosich says price increases and higher interest rates are not hurting PulteGroup's demand so far in 2022. Jadrosich says PulteGroup has taken steps to address supply chain bottlenecks, including doubling the number of spec homes in its pipeline, ordering earlier and warehousing part of its inventory. PulteGroup trades at just 5.1 times Jadrosich's 2023 EPS estimate.
Bank of America has a Buy rating and $58 price target for PHM stock.
Western Digital Corp (NASDAQ:WDC)
Western Digital designs and manufactures storage solutions for data centers, mobile devices, and personal computers.
Analyst Wamsi Mohan says he expects both tighter NAND supply and better NAND pricing moving forward, as well as greater visibility from long-term agreements, which now make up about a third of the company's HDD portfolio. In addition, lower reliance on the PC market should reduce Western Digital's earnings volatility. Western Digital shares trade at just 5 times Mohan's 2023 EPS estimate.
Bank of America has a Buy rating and $65 price target for WDC stock.
Also Read: 6 S&P 500 Dividend Stocks To Buy With 4% Yields: AT&T, IBM And More
General Motors Company (NYSE:GM)
General Motors is one of the "Big Three" U.S. legacy Detroit automakers.
Analyst John Murphy has praised GM management's execution in a difficult auto market in recent quarters that has been plagued by chip shortages. Even in the difficult environment, GM has guided for 2022 adjusted EBIT of between $13 billion and $15 billion. Murphy says GM is balancing the strength and profitability of its core business with aggressive investments in its electric, autonomous and connected vehicle technology businesses of the future. GM shares trade at just 6.4 times Murphy's 2023 EPS estimate.
Bank of America has a Buy rating and $95 price target for GM stock.
Micron Technology, Inc. (NASDAQ:MU)
Micron Technology manufactures semiconductor memory products, including DRAM and NAND flash memory, as well as image sensors.
Analyst Vivek Arya says Micron's earnings beat and guidance hike in late March were impressive, and the company's profitability, long-term agreements and exposure to key product cycles in data centers, autos and PC's are bullish catalysts for the stock. Arya estimates long-term agreements now account for about 75% of sales and 100% of its large customers. Micron shares trade at just 6.8 times Arya's 2023 EPS estimate.
Bank of America has a Buy rating and $118 price target for MU stock.
Citigroup Inc (NYSE:C)
Citigroup is a leading global bank and diversified financial services company.
Analyst Ebrahim Poonawala says Citigroup's investor sentiment may have recently hit "peak pessimism" with the stock down 25.4% overall in the past year despite better-than-expected first-quarter earnings results and limited exposure to Russia and Ukraine. In addition, Poonawala projects $1 billion in quarterly buybacks in 2022 and another $8 billion in buybacks in both 2023 and 2024. Citigroup shares trade at just 6.8 times Poonawala's 2023 EPS estimate, and the stock's 3.8% dividend yield is the highest on this list.
Bank of America has a Buy rating and $60 price target for C stock.
