Value can be measured in a lot of ways, depending on the nature of the company you're analyzing. A low price-to-earnings (P/E) ratio may be a good measure, book value may be used, or sometimes, investors are just looking for a good dividend. 

We asked three of our investors for their favorite value stock for investors who don't want to take on lots of risk. Alaska Air Group (NYSE:ALK), Synchrony Financial (NYSE:SYF), and Apple Inc. (NASDAQ:AAPL) were at the top of the list. 

Side of an aircraft from a front view.

Image source: Getty Images.

Fly the value-friendly skies

Rich Smith: (Alaska Airlines): I'm what we call a "growth at a reasonable price" (GARP) kind of investor. I buy stocks that seem cheap relative to their growth rates -- 10 P/E stocks projected to grow earnings at 10%, or more, for example, or 20 P/E stocks expected to grow at 20%. But to inject a note of conservatism into my investing, I have to call a cutoff somewhere.

I mean, if you've got a stock that Wall Street is telling you will grow 50% a year, that's a growth rate that can justify almost any P/E ratio you throw at it -- 20 times earnings, 30 times earnings, or even 50 times earnings! If you want to be conservative in your investments, though, it's probably safest to seek out value stocks that still will look like bargains, even if growth rates are only in the mid-teens or lower.

That's why I like Alaska Airlines stock.

Priced below 12 times trailing earnings, Alaska Airlines stock is cheap on its face. Thanks, in part, to the company's recent purchase of Virgin America, its stock is primed to grow in coming years. And yet, with a growth rate estimated at a bit less than 10% per year over the next five years, Alaska Airlines isn't expected to grow too fast -- which makes it easier for Alaska Airlines to meet expectations, and also gives the stock a chance to surprise to the upside.

Alaska Airlines stock boasts a strong balance sheet with only moderate debt -- less than $900 million net of cash on hand -- and it even pays a small dividend of 1.6%. For conservative investors, I think this value stock makes a fine choice.

Get your portfolio in synch

Dan Caplinger (Synchrony Financial): Stocks in the financial industry tend to have relatively modest valuations, as investors recognize the cyclical risk that most financial stocks have to ups and downs in the business cycle. Yet even though Synchrony Financial trades at a multiple that's similar to what you'd see with many well-established names in the industry, the company has far more growth potential than most of its peers.

Synchrony is a market leader in helping retailers and other businesses offer their own branded credit cards. As brick-and-mortar and e-commerce retailers alike have sought ways to differentiate themselves from their peers, having their own credit cards is an obvious way to build loyalty. Promotional financing options are also available as part of Synchrony's portfolio of services, and that often appeals to sellers of high-ticket items, like furniture and musical instruments.

Synchrony does have exposure to changing credit conditions, and if rising interest rates lead to deteriorating fundamental credit metrics, then its near-term results could suffer. Yet Synchrony has recently attracted the attention of Warren Buffett, who made a big purchase of the financial company's stock earlier this year. With the stock trading at low enough levels to offer an attractive margin of safety, Synchrony Financial is worth the current risk in order to tap into the long-term potential for its market. 

A tech giant with incredible value

Travis Hoium (Apple): It's crazy to think that a company worth $820 billion is a value stock, but I think Apple qualifies in many ways. There's the $261.5 billion in cash on the balance sheet, which is a great fallback for the company and shows how strong the balance sheet is. The real value of Apple, however, is in its ecosystem and products.

The iPhone has become a must-have product for millions of people around the world, and it's a huge revenue generator itself, but it feeds an ecosystem of products, as well. Apps, music, movies, the Apple Watch, AirPods, iPads, Macs, and now the HomePod, are all product extensions that work seamlessly in Apple's ecosystem. Once customers are in the ecosystem, it's very difficult to leave because they would have to set up their devices all over again.

This dynamic drives Apple's incredible free cash flow of over $50 billion, which should see another bump after the iPhone X is released. If you pull out the cash from Apple's market cap, shares trade at just over 11 times free cash flow, an incredible value for any stock.

AAPL Free Cash Flow (TTM) Chart

AAPL Free Cash Flow (TTM) data by YCharts.

Given Apple's massive installed base and incredible ability to create a wonderful user experience, I see the company generating billions of dollars in cash each year for the foreseeable future. That will help drive the current 1.6% dividend yield higher and fuel share buybacks as a way to return cash to investors, as well. As long as Apple is the cash machine we know today, it's a great value for even the most conservative investors.

Dan Caplinger owns shares of Apple. Rich Smith has no position in any of the stocks mentioned. Travis Hoium owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool recommends Synchrony Financial. The Motley Fool has a disclosure policy.