While the broader stock market has come back and almost erased the losses suffered during the COVID-19 correction in March, there are still a lot of bargains out there to be had. For those who like to shop for value on the discount rack, here are two stocks that are not only cheap but have good long-term value.

1. MGM Resorts International: Several properties are back up and earning

No industries were hit harder by the pandemic than the hotel and travel industries. And few stocks were hit as hard as MGM Resorts (NYSE:MGM), which for a time had to shut down all of its U.S. hotels. The stock price fell to a low of $7.14 per share on March 18 and has slowly climbed back to about $16 per share as of July 20. But the stock is still down about 50% year to date and is trading at only 3 times earnings with a price/earnings ratio of 3. That's a rock bottom value for a major brand name like MGM that will certainly see growth as hotels reopen and a COVID-19 vaccine is developed.

The MGM Grand resort in Las Vegas is seen from the street at night.

The MGM Grand resort in Las Vegas reopened in June. Image source: MGM Resorts.

There are a few good reasons why you should buy this stock now. One, MGM has excellent liquidity to absorb the losses. At the end of the first quarter, MGM had $4.6 billion of cash and $1.4 billion in redeemable partnership units with MGM Growth Properties. Minus about $700 million, which was redeemed in May, the company has about $5.3 billion in debt with no debt due until 2022. So even if the company made no money, it has enough cash to survive through next year.

But the revenue should start to return as it opened its Mississippi properties in May. Its Las Vegas properties -- the Bellagio, New York-New York, MGM Grand, Luxor, Mandalay Bay, Four Seasons, Excalibur, and ARIA -- opened in June. MGM Northfield Park in Cleveland and National Harbor near Washington, D.C., also opened in June, while the Borgata in Atlantic City, N.J., and MGM Springfield in Massachusetts are opening in July. MGM has a mask policy in all its properties and strict social distancing guidelines. Also, MGM should start seeing growth from MGM Macau after China lifted its travel ban there. 

Another really promising development is the BetMGM, an online betting app it developed with U.K.-based GVC Holdings. In July, MGM announced a deal with the Denver Broncos as its official sports betting partner. The company plans to offer this app in 11 states and generate $130 million in revenue this year. With its brand name, BetMGM has excellent growth potential in the growing online betting industry.

2. American Express

The financial services company, American Express (NYSE:AXP), has also seen its stock price plummet during the COVID-19 crisis. It's down about 23% year to date. With the stay-at-home orders, job losses, and recession, some users of its credit cards are spending less and others are defaulting on payments, which means potentially more loan defaults and a drop in transaction fees from merchants every time a purchase is made. Unlike the other major credit card companies that issue cards through third-party banks who manage the financials, Amex is its own financial network. It effectively lends the money to the card user making the purchase.

A hand holds an American Express gold card above a table full of food.

Image source: American Express.

As some card users became stressed by the current recession, American Express saw net income fall 76% to $367 million in the first quarter, year over year, and earnings per share drop 77% to $0.41 per share. After dropping to a low of $68 per share on March 23, the stock price is back up above $96 per share and is trading at about 14.6 times earnings. It has gained back nearly 44% from its lows and should continue to climb as consumer spending increases.

The performance of the company is closely tied to economic growth and consumer spending, and that will return. And as the third-largest credit card company in the U.S., it has the brand and the strong earnings history that investors have counted on for returns that have outperformed the S&P 500 and the financial sector.

The next few quarters will no doubt be challenging, but the company is well-capitalized with plenty of liquidity and a Common Equity Tier 1 ratio of 11.7% after the first quarter, which is above its 10% target range. Plus, Chairman and CEO Stephen Squeri said on the first-quarter earnings call that the company is cutting discretionary spending by nearly $3 billion this year to weather the storm, with 100% work-from-home arrangements for employees but no layoffs. 

Until then, a landmark deal the company signed in July to become the first foreign payments network in mainland China should help boost revenue. Express Company, Amex's joint venture with Lianlian DigiTech Co., is licensed to clear RMB transactions charged on American Express branded cards. It is also compatible with the mobile wallets that are popular with Chinese consumers.

"This approval represents an important step forward in our long-term growth strategy and is an historic moment, not only for American Express but for the continued growth and development of the payments industry in mainland China," Squeri said. "We look forward to welcoming millions of new consumers, businesses, and merchants in China to American Express, as well as continuing to enhance our support for our global customers when they travel to the region."

China is one of the world's largest mobile-payments markets with over $27 trillion in annual transactions, so this is a huge long-term growth opportunity for Amex.

Bargain hunters should think about adding these two stocks to their carts.