7 Top Undervalued Stocks To Buy In June 2024 (2024)

Share to Facebook
Share to Twitter
Share to Linkedin

The summer edition of our undervalued stocks series features companies primed for a warm-weather profit boost. These stocks either deliver summer fun or cater to weekend warriors who use the longer days to complete those lingering home projects.

Most undervalued stocks are long-term plays—since it takes time for the market to realize their full value. But a soft seasonal lift can ease the stress of that waiting game. So, let's explore seven summer-friendly undervalued stocks to research before you get distracted by Independence Day celebrations.

How We Chose These Undervalued Stocks

For this undervalued stock search, I focused on industries with higher demand in the summer months. Areas showing the best value opportunities included travel, energy, entertainment and home improvement.

All seven companies selected have P/E ratios that are at least 10% below the average in their segment. Analysts also say these stocks have double-digit upside ranging from 16% to 45%.

7 Top Undervalued Stocks To Buy In June 2024

The seven undervalued stocks for June are introduced in the table below, along with the market capitalization and industry for each.

Data source: TradingView.com

You can see these best stocks vary in size, from large-cap Lowe's to small-cap resort operator Golden Entertainment. For more large- and mid-cap investing ideas, see our 10 value stock picks for 2024. For small-cap picks, see the six best small-cap value stocks.

Now let's walk through the operations and highlights of the seven undervalued stock picks.

The brain trust at Forbes has run the numbers, conducted the research, and done the analysis to come up with some of the best places for you to make money in 2024. Download Forbes' most popular report, 12 Stocks To Buy Now.

1. Lowe's (LOW)

Stock price: $219.47
Average analyst price target: $251.69
Trailing P/E ratio: 17.4
Trailing 12-month (TTM) EPS: $12.45
Dividend yield: 2.0%

Lowe's Business Overview

Lowe’s operates a chain of more than 1,700 home improvement retail stores throughout the U.S. The company additionally offers installation services through independent contractors and private-branded products.

Why LOW Stock Is A Top Choice

Lowe's has raised its dividend every year since going public in 1961. The most recent increase was a 5% boost to $1.15 per share, payable in August. The increase signals management's confidence in the company's financial strength and earnings prospects.

The home improvement retailer also regularly repurchases its stock, which is another value add for shareholders. In the first quarter of 2024, share repurchases totaled $743 million.

Sales and earnings growth in recent quarters has been challenging for Lowe's. The company saw demand spike during the Covid-19 pandemic and then backtrack afterwards. Lowe’s is well-managed and resilient, however. The leadership team is making progress winning market share in key categories through its growth initiative, called Total Home strategy.

2. Valero Energy (VLO)

Stock price: $154.05
Average analyst price target: $183.96
Trailing P/E ratio: 7.7
TTM EPS: $20.20
Dividend yield: 2.8%

Valero Energy Business Overview

Texas-based Valero Energy manufactures and sells liquid transportation fuels and petrochemicals in the U.S. and abroad. Among other activities, the company distributes fuel through its network of 7,000 independently owned gas stations.

Why VLO Stock Is A Top Choice

Valero is a leading refiner, with a track record of reliable and safe operations plus a diversified portfolio of refining assets. Those qualities plus consistently high utilization support strong refining profit margins.

The company has growth opportunity in its Diamond Green Diesel (DGD) joint venture, which reported operating income of $190 million in the first quarter of 2024. The joint venture with Darling Ingredients supplies Valero with low-cost raw materials to produce higher-margin renewable diesel.

Valero also pays a respectable dividend yield of 2.8% and spent $1 billion on share buybacks in the first quarter of this year.

3. Delta Air Lines (DAL)

Stock price: $50.82
Average analyst price target: $61.48
Trailing P/E ratio: 6.4
TTM EPS: $7.79
Dividend yield: 0.8%

Delta Air Lines Business Overview

Delta provides air transportation in the U.S. and around the world to passengers and cargo. With 4,000 daily departures, DAL serves nearly 200 million travelers through a network of 275 destinations in 50 countries.

Why DAL Stock Is A Top Choice

Delta reported record revenues for its March 2024 quarter fueled by strong demand from business and international travelers. The airline's revenue diversification strategy is also paying off, with premium and loyalty revenues growing faster than main cabin sales.

4. Avis (CAR)

Stock price: $109.79
Average analyst price target: $157.75
Trailing P/E ratio: 3.4
Trailing 12-month EPS: $31.71
Dividend yield: NA

Avis Business Overview

Avis provides carsharing, car rentals and truck rentals in the U.S. and around the world. The company's brand portfolio includes Avis, Budget, Budget Truck, Payless and Zipcar.

Why CAR Stock Is A Top Choice

Avis stock is down nearly 38% after fourth quarter 2023 and first quarter 2024 results fell short of expectations. Contributing factors were higher per-unit fleet costs, higher depreciation expenses and higher interest expenses.

The pullback should be temporary, however. Avis has a strong track record in operations and the team knows how to course-correct. Vehicle dispositions taken in the first quarter, for example, will improve utilization going forward. That should position Avis to capitalize on higher demand in the June and September quarters.

Additionally, car rental demand is strong. Mordor Intelligence predicts the car rental market will grow at a 10.8% CAGR between 2024 and 2029. That growth will benefit Avis as the company continues to manage its costs and utilization.

5. Marriott Vacations Worldwide (VAC)

Stock price: $89.94
Average analyst price target: $114.78
Trailing P/E ratio: 16.4
Trailing 12-month EPS: $5.43
Dividend yield: 3.4%

Marriott Vacations Worldwide Business Overview

Marriott Vacations develops, sells and manages vacation ownership products, also known as timeshares. The company operates several brands, including Marriott Vacation Club, Hyatt Vacation Club, the Ritz-Carlton Destination Club and Interval International.

Why VAC Stock Is A Top Choice

VAC is down nearly 30% in the aftermath of the 2023 Maui wildfires. The pullback creates a nice buying opportunity for a compelling dividend stock. The resort operator has raised its quarterly dividend substantially in the last few years from $0.54 in 2021 to $0.76 in 2024. The current yield is ample at 3.4%.

For the first quarter of 2024, VAC reported a slight decline in contract sales and a larger decline in net income. However, CEO John Geller says travel demand for Maui is recovering. That recovery should help fuel 6% to 9% growth in VAC's annual contract sales this year.

6. Travel + Leisure (TNL)

Stock price: $43.39
Average analyst price target: $53.90
Trailing P/E ratio: $8.1
Trailing 12-month EPS: $5.36
Dividend yield: 4.3%

Travel + Leisure Business Overview

Like VAC, Travel + Leisure develops, sells and operates owned vacation resorts. The company also manages vacation exchanges and direct-to-consumer rentals through its Travel and Membership segment.

Why TNL Stock Is A Top Choice

TNL has shown steady growth in annual revenues since a Covid-related dip in 2020. While revenues and EPS are still short of pre-pandemic levels, the company is producing ample cash, which is funding share repurchases and an impressive dividend yield of 4.3%.

TNL spent $25 million on share repurchases in the first quarter of 2024. The company has $146 million remaining on its share repurchase authorization.

TNL's leadership team expects to deliver $910 million to $930 million in adjusted Ebitda in 2024, with $235 million to $245 million of that coming in the second quarter.

7. Golden Entertainment (GDEN)

Stock price: $30.03
Average analyst price target: $41.86
Trailing P/E ratio: 3.2
Trailing 12-month EPS: $9.27
Dividend yield: 0.8%

Golden Entertainment Business Overview

Las Vegas-based Golden Entertainment operates eight casino resorts and 71 pubs and taverns. Properties in the company's portfolio include Edgewater Casino, the Strat, Arizona Charlie’s and Great American Pub.

Why GDEN Stock Is A Top Choice

GDEN completed several restructuring actions this year, setting the stage for future growth. The company sold its noncore Nevada distributed gaming operations and used the proceeds to repay $287 million in debt. The divestiture follows the 2023 sales of the company’s Montana distributed gaming operations and the Rocky Gap Casino. After the first quarter earnings release, the company also announced it had secured rate reductions on its term loan facility.

The divestitures make quarter-over-quarter comparisons difficult. However, GDEN did report first quarter EPS of $1.37 when analysts were expecting $0.12. The company also initiated a quarterly dividend of $0.25 earlier this year.

Bottom Line

The summer months can drive earnings gains for travel and entertainment companies and home improvement retailers. You can use the lift to your advantage—specifically, to take the sting out of the waiting game that's typically associated with undervalued stocks.