3 top value shares to buy now

These could be some of the best value shares to buy now based on their potential for growth and income over the next few years.

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It seems to me that there’s currently a broad range of value stocks on the market at the moment. As such, here are my top three value shares to buy now. 

Value shares 

The first company on my list is Card Factory (LSE: CARD). The pandemic has significantly impacted this business. Most of its stores have been closed on and off throughout the past 12 months. This has crushed sales and profits.

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To avoid bankruptcy, the business has been negotiating with its lenders to lift restrictions on its credit facilities. Last month, creditors agreed to give the company more breathing space, and it plans to reopen most of its stores in April.

Granted, the outlook for Card Factory is highly uncertain. However, I think this is one of the best shares to buy today as a recovery investment. As the UK economy reopens over the next few weeks and months, the company could see a significant increase in sales. This may improve investor sentiment towards the business. 

Of course, a recovery isn’t guaranteed. If sales don’t improve markedly over the next few months, Card Factory could run out of money. This is the biggest challenge the company faces today. 

Shares to buy now

Another company on my list of value shares to buy now is Airtel Africa (LSE: AFF). This is one of Africa’s largest mobile telecommunications companies. It operates in 14 countries, primarily in East Africa and Central and West Africa. 

Some analysts believe Africa’s economic growth is only just getting started. Airtel is one of the handful of London-listed investments available to play this theme. The stock trades at a forward P/E of around 11 and offers a dividend yield of over 5%. Based on these attractive ratios, I’d buy the stock today. 

Of course, although these ratios look attractive, they’re just forecasts at this stage. The company faces multiple threats and challenges, including competition and its high level of debt. These challenges may reduce the group’s growth in the long term and impact profit margins, leading to a dividend cut. 

Income and growth

The final company on my list of the best value shares to buy now is Morrisons (LSE: MRW). As one of the UK’s largest supermarket retailers, this business has a solid competitive advantage. It’s also recently expanded its deal to supply online retail giant Amazon, which gives it an edge over other retailers in the UK. 

I believe these qualities can help support the group’s 5% dividend yield. The stock also trades at an attractive forward P/E ratio of 12.6. As is the case with all forecasts, these should be viewed with a pinch of salt, but I think they show the company’s potential. That’s why I’d buy the stock for my portfolio today. 

That’s not to say the group isn’t without its risks. Challenges such as higher labour costs and food inflation may eat away at Morrisons’ bottom line. If costs rise significantly, they could force the company to reduce its dividend to investors. 

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Rupert Hargreaves owns no share mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Card Factory and Morrisons and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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