2 Value Stocks I'm Buying Right Now

Core Insights - Current market conditions are characterized by escalating geopolitical tensions, strained global trade relationships, and persistent inflation impacting purchasing power [1] - Despite these challenges, there are compelling investment opportunities in high-quality companies trading at attractive valuations [2] Medtronic (MDT) - Medtronic is currently trading at 15 times forward earnings, which is a 25% discount compared to the S&P 500's 20 multiple, while maintaining leadership in high-growth healthcare segments [3] - The company has a strong dividend history, having raised its payout for 47 consecutive years, offering a yield of 3.2%, significantly higher than the S&P 500's 1.3% [4] - Concerns about Medtronic's moderating growth overlook catalysts like a 22% surge in its Affera pulsed field ablation business, indicating potential to challenge competitors in the atrial fibrillation market [5] - Medtronic's 85% payout ratio is influenced by temporary factors, with management demonstrating disciplined expense control that has allowed for 7% EPS growth despite slower revenue growth [6] - After a five-year performance of negative 2.5%, Medtronic's discounted valuation, generous yield, and growth signs could benefit patient investors [7] Chevron (CVX) - Chevron trades at 14.7 times forward earnings, nearly 27% below the S&P 500's 20 multiple, while holding a dominant position in key production regions [9] - The company has raised its dividend for 37 consecutive years, with a recent 5% increase, providing a current yield of 4.1% and a sustainable 67% payout ratio [10] - Market concerns about long-term oil demand and downstream weakness do not account for Chevron's cost advantages in the Permian Basin, where 75% of its acreage has low or zero royalty rates [11] - Chevron's commitment to $2 billion to $3 billion in cost reductions by 2026 is expected to enhance profitability [11] - For value investors, Chevron presents a strong combination of yield, attractive valuation, and exposure to essential energy commodities, which are likely to appreciate in inflationary environments [12] Investment Rationale - In a volatile market, companies like Medtronic and Chevron provide proven business models, generous income, attractive valuations, and significant upside potential, making them appealing for regular investment [13]