HomeNews3 best value stocks to buy amid tightening financial conditions

3 best value stocks to buy amid tightening financial conditions

Mircea Vasiu

Central banks in the developed world embark on a tightening cycle. If higher rates might affect growth stocks, how about value stocks? Here are three value stocks to invest in: Procter & Gamble, McCormick, and HP. 

Central banks worldwide began or planned to start the tightening of financial conditions. As COVID-19 restrictions are lifted, economies are getting back on track, and central banks must deal with rising inflation.

Therefore, rate hikes in the developed world are in the cards. Some central banks, like the Bank of England, already hiked rates – twice! Some others, like the Fed, plan to start a new tightening cycle in March.

This is the path all central banks will take, so tight financial conditions in the developed world are coming. As such, growth stocks might be affected, but how about value stocks?

Value stocks are known for their steady growth rates and stable revenues and earnings. Moreover, most value stocks pay a dividend and represent mature businesses. Here are three value stocks to buy amid tightening financial conditions in the developed world: Procter & Gamble, McCormick, and HP.

Procter & Gamble

The Procter & Gamble Company (NYSE:PG) is one of the oldest companies in the world. Founded in 1837, it sells household products, such as products for beauty, grooming, babies, and so on.

Procter & Gamble is a dividend-paying company. It increased its annual dividend for the past 65 consecutive years, so the chances are that it will continue to do so in the future. The dividend yield is expected to reach 2.65% by  2025, and the dividend payout ratio is 60.07%.

McCormick

McCormick & Company (NYSE: MKC) is an American company serving the food industry. It sells things like spices and condiments, and the stock price keeps climbing to new highs.

Moreover, McCormick increased its dividend for the past 35 years, and the five-year dividend growth rate is 9.57%.

HP

HP (NYSE:HPQ) is an American company from Palo Alto, California, operating in the technology hardware, storage, and peripherals industry. It offers personal computing and printing products, among others, and the P/E Non-GAAP in the last twelve months is lower than the sector median by more than 50%.

Moreover, this is a company paying a hefty dividend. The forward dividend yield is 2.64% and the dividend payout ratio is 20.45%.