Using the TipRanks Stock Screener Tool, we identified three companies that have low Price-to-Earnings (P/E) ratios and hold a “Strong Buy” consensus rating. Each stock also presents an impressive more than 20% upside potential within the next year, making them compelling investment choices.
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Let’s dive into the details.
Why Low P/E Stocks?
Low P/E stocks trade at a discount to their earnings, letting you buy more profit per dollar invested. This inherent margin of safety buffers against market dips and losses. While some chase high P/E names for rapid growth, history shows low P/E picks often yield better long-term returns with lower risk. They also tend to offer generous dividends, hail from established companies with steady growth, and exhibit less volatility.
EQT (EQT)
- P/E Ratio: 6.4x
- Average EQT Price Target: $70.05 (21% upside)
EQT Corporation is a U.S.-based energy company focused primarily on producing natural gas. It operates one of the largest natural gas production systems in the United States, mainly in the Appalachian Basin, and supplies energy to utilities, industrial users, and export markets. EQT’s low P/E reflects the cyclical and price-sensitive nature of the natural gas industry.
Looking ahead, EQT stock has 16 Buys and five Holds assigned in the last three months.
Ally Financial (ALLY)
- P/E Ratio: 9.6x
- Average Ally Financial Price Target: $52.55 (23.29% upside)
Ally Financial is a U.S.-based digital financial services company best known for its online banking platform and auto lending business. ALLY stock trades at a low P/E mainly because it is a cyclical lender. Its earnings depend on interest rates, credit demand, and loan defaults, which can fluctuate with the economy. Like most banks, it has slower growth and higher risk sensitivity.
Looking ahead, ALLY stock has 10 Buys and two Holds assigned in the last three montUnited airlhs.
United Airlines Holdings (UAL)
- P/E Ratio: 10.8x
- Average United Airlines Price Target: $127.7 (30.35% upside)
United Airlines is one of the largest airlines in the U.S. It operates a global flight network that connects major cities across North America, Europe, Asia, and other regions. Its business depends heavily on travel demand, fuel prices, and economic conditions, making it a cyclical industry.
On Wall Street, analysts have a Strong Buy rating on UAL stock with 16 Buys assigned in the last three months.