Value pulls? 2 Top Stocks I’m Considering!

Value and top stocks, do they go together? Of course, of course. Anyone who knows me as an investor also knows that there is always some dividend. We can also place the collection of dividend stocks in this category.

But today, let’s look at two particularly exciting top stocks that now promise a lot of value. They could be a good smart choice for real returns in the long term. At least if the respective investment theses succeed.

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Munich Re: Top stock for value

That the share of Munich Re (WKN: 843002) is a top stock because its dividend is well known. But we can also subsume more under the reinsurer’s hat. The bottom line is that there is a strong business model at a price that is just right. At least I think so.

In the second quarter, Munich Re’s management once again made a profit of more than EUR 700 million. For the current fiscal year 2022, management even confirmed the earnings expectation of 3.3 billion euros. This means that, based on the previous year’s figures, we can only expect double-digit earnings growth. Let’s put it in context and why it is actually value in its purest form.

Munich Re’s shares are currently valued at a price-to-earnings ratio of around 11; according to the forecast, the ratio should fall to around 10. There is also a dividend of approx. 4.8%, which rounds off the cheap valuation. Possibly even more, management has predicted dividend growth for the period up to and including 2024.

Indeed, the value stock should only remain at this level to generate operationally solid returns. Share buybacks should be able to provide modest earnings growth over the years. Valuation, dividend, but also the forecast for the current financial year show why a top share hides behind.

Verizon Communications: Pretty boring

Boredom and value: do they go together? Yes absolutely! Even star investors like Warren Buffett prefer simple, easy-to-understand and unexciting business models. This often means that the respective companies are very established. In the case of the other top stock Verizon Communications (WKN: 868402) that’s right.

After all, it is a leading American telecommunications group that has successfully invested in the development of a 5G network in recent years. Now is the time to reap the rewards of these investments. It remains to be seen whether Verizon’s management can achieve pricing and moderate growth. In any case, the market itself is no longer growing in double digits on its own.

But he doesn’t need to. The value stock is currently priced at just 9 times earnings and has a yield of 5.7%. That’s enough for me to generate solid returns in the long term as well. Especially since the management can also show a year and a half with a constant and even annually increased dividend.

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Vincent owns shares in Munich Re and Verizon Communications. The Motley Fool recommends Verizon Communications.

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