4 Cheap Value Stocks, Below Book Value, Dividend-Paying

At a time when a few NASDAQ
NDAQ
-100 growth stocks are soaring upward based on “AI” involvement, here are 4 stocks that look to be cheap — judging by the classic value stock approach to identifying these types of situations. Each of these trades below its book value with a low price-earnings ratio and each pays a dividend.

The benefit to owning a “below book value” stock is that certain types of institutional investors screen to find them and to sometimes buy them out at a much higher price. While those who own the equity are waiting, it’s nice to be receiving the dividends that are paid.

It doesn’t always work out to perfection, but here are 4 value stocks that may fit the bill:

KB Home
KBH
is a well-known residential construction stock that’s been steadily moving to higher prices even with higher interest rates. It trades at a 1% discount to its book value with a price-earnings ratio of 4.86, significantly below the Shiller p/e for the Standard and Poor’s 500 which now sits at 29.48.

The company pays a 1.35% dividend. The daily price chart is here:

MGIC Investment Corporation is a specialty insurance firm, or to put it in their words, they provide “products and services that protect mortgage investors from credit losses.” Right now the stock is available for purchase at 94% of its book value. It’s trading with a price-earnings ratio of 5.57.

Shareholder equity greatly exceeds the company’s long-term debt. MGIC Investment is paying a dividend of 2.59%. Here’s the daily price chart:

Eneti Inc is a Monaco-based marine shipping stock which trades at a 48% discount to its book value with a price-earnings ratio of 4.59. Average daily volume is 455,000 shares, relatively light for a New York Stock Exchange listed equity. The company’s long-term debt is greatly exceeded by shareholder equity.

Eneti offers investors a .40% dividend. The daily price chart looks like this:

Radian Group is a mortgage insurance company with headquarters in Wayne, Pennsylvania. The stock has a price-earnings ratio of 6.02 and trades at a 1% discount to book value. Radian pays a dividend of 3.45%.

The daily price chart is here: