I’m on the lookout for the best value stocks to buy this month. Here’s a handful of my favourites.
Brilliant bank
I’m happy to leave Lloyds, Barclays and other UK bank shares on the shelf. A gloomy outlook for the domestic economy means these companies could struggle to grow earnings in the years ahead.
I’d rather invest my money in Bank of Georgia Group (LSE:BGEO). I feel this emerging market bank has much better growth potential as the Eurasian country’s economy booms. Adjusted profits here leapt 21% in 2023.
The company is a dominant force in the country’s rapidly growing banking industry. Along with TBC Bank, it accounts for around three-quarters of all assets.
I think Bank of Georgia shares are a steal at current prices of £47.35. They trade on a forward price-to-earnings (P/E) ratio of 4.2 times. They also boast an enormous 6% dividend yield.
A fresh economic downturn could derail its impressive earnings record. But the long-term picture remains bright for the business, in my view, making it a top buy right now.
Top trust
Property stocks are vulnerable to interest rate movements. The higher the rate, the greater the pressure exerted on these companies’ net asset values (NAVs). This in turn has an adverse impact on profits.
There’s no guarantee that interest rates will fall sharply in the UK, either. Yet I still think Supermarket Income REIT (LSE:SUPR) is an attractive value stock to buy today.
This real estate investment trust (REIT) lets out properties to the country’s largest grocery chains. And at the moment I think it looks massively undervalued.
At 74p per share, it trades at a near-20% discount to its NAV per share of 89.1p.
Meanwhile, its dividend yield clocks in at a spectacular 8.2%.
I think Supermarket Income has terrific long-term opportunities to increase profits, driven by steady population expansion. The rise of e-commerce poses a threat to the business. However, its decision to focus on omnichannel stores that service physical and online retail reduces this danger.
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Wind warrior
Greencoat UK Wind (LSE:UKW) is another UK share that trades at a big discount to the value of its assets.
At 145p per share, its price-to-book (P/B) ratio sits at 0.9. A reading of 1 indicates that a stock is undervalued relative to its book value (which is total assets minus total liabilities, dividend by the number of outstanding shares).
On top of this, Greencoat carries a 6.9% dividend yield for 2024, giving income investors something impressive to shout about.
Like the retail REIT I described above, this renewable energy stock is vulnerable to higher interest rates. It’s also dependent on future governments remaining committed to net zero.
But on balance, I believe the outlook for Greencoat remains very encouraging. Demand for its clean power should strengthen considerably as efforts to fight climate change continue. The company currently owns and operates 49 wind farms across the UK.
