Best Deep Value Stocks to Buy in 2024

For those willing to take on more risk than usual, investing in deep value stocks could be a great way to increase your returns. Deep value stocks are cheap stocks with low valuation multiples. Cheap, in this case, means that the intrinsic value is much higher than the current price.

While there's some overlap between value stocks and deep value stocks, deep value investors don't focus as much on the quality of a company, but the price. They're also open to companies with glaring issues. In fact, those often make for the best deep value stocks because the market has largely written them off.

Top deep value stocks

Five top deep value stocks

Here are the top deep value stocks to check out:

1. British American Tobacco

1. British American Tobacco

While the tobacco industry has historically been highly profitable, it's facing more and more challenges. Smoking rates have dropped because of health concerns, and tobacco companies don't have the best reputation. Even with these difficulties, British American Tobacco could still be a good pick for deep value investors, particularly those looking for passive income.

That's because this stock has a massive 8.4% dividend yield. There is the risk that it can't keep paying its dividends if business declines, but British American Tobacco has some key advantages that could help it remain successful.

In addition to its cigarette brands, British American Tobacco has developed a strong lineup of next-gen products, including Vuse for vaporizing and Velo nicotine pouches. While competitors only operate either in the United States or in other countries, British American Tobacco operates worldwide.

2. General Motors

2. General Motors

Automotive giant General Motors generated $171.8 billion in revenue and $9.8 billion in net income in 2023. Those were increases of 9.6% and 1.4%, respectively, and they beat expectations for the year.

General Motors isn't considered the most exciting stock, especially compared to purely electric vehicle (EV) companies like Tesla (TSLA 3.23%). But it's making headway of its own in this department, with plans to invest $35 billion in EVs and reach $90 billion in EV sales by 2030.

Another example of General Motors' forward-thinking approach is its 80% ownership stake in Cruise, an autonomous driving company. While autonomous vehicles are still a small industry at the moment, they have tremendous growth potential.

General Motors had a low price-to-earnings (P/E) ratio of 4.91 in 2023. It also generated quite a bit of cash - - automotive adjusted free cash flow was $11.7 billion.

3. T. Rowe Price Group

3. T. Rowe Price Group

T. Rowe Price Group is an investment management company with more than $1.6 trillion in assets under management. Performance has been up and down in recent years. The bear market in 2022 had a significant impact, causing revenue to drop by 15% that year, and they decreased by another 0.4% in 2023.

There's no need for investors to panic, because this has historically been a resilient company. It has been around since 1937, so it's a well-known and well-regarded brand. T. Rowe Price has also demonstrated success in stock picking, with its mutual funds outperforming their benchmarks 76% of the time over the last decade.

Last but certainly not least, T. Rowe Price pays out a generous dividend. It has increased its annual dividend for 36 years in a row, making it one of the more valuable dividend stocks you can find.

4. Medical Properties Trust

4. Medical Properties Trust

Medical Properties Trust is a real estate investment trust (REIT) that buys and rents out healthcare facilities. As a REIT, it pays out a hefty dividend to shareholders, and its growth is dependent on its ability to continue expanding by snapping up new properties.

This is considered one of the riskier healthcare REITs, as it has a high debt-to-equity ratio of 169%. There's concern about how much Medical Properties Trust will be able to grow unless it takes on new debt at high interest rates. In addition, one of its tenants filed for bankruptcy, and others are reportedly dealing with financial issues.

Despite the bad press surrounding Medical Properties Trust, it's still profitable. While it may be tough going in the short term, this REIT offers long-term stability. Communities will continue to need hospitals and other healthcare facilities. Even if a property operator can't pay its bills, Medical Properties Trust could transition properties to new operators when necessary.

5. BP

5. BP

BP is best known as an oil and gas company. It operates production facilities, pipelines, terminals, and refineries worldwide. In recent years, it has started making the transition into an integrated energy company, investing in bioenergy, EV charging, and renewable energy.

After impressive returns in 2022 and 2023, BP didn't see the same type of results in 2024. Share prices were down, as were revenue and profits.

For deep value investors, rocky periods like these can be some of the best opportunities to buy shares at a discount. BP is still one of the biggest oil companies in the world, and it pays a hefty 6.3% dividend. It also had $17.8 billion in free cash flow at the end of 2023.

Related investing topics

The bottom line

The key to building wealth is long-term investing, and deep value investing fits that approach well. After all, with this type of stock, you're looking past the short-term noise and evaluating a company based on its price compared to its intrinsic value.

It's important to be prepared for some volatility when following a deep value strategy. If you can do that, deep value stocks could be a boon to your investment portfolio.

FAQ