It’s really not easy to find value in today’s stock market. With indices at record highs — and seemingly setting records over and over again — the biggest challenge for investors today is looking for solid value. On the other hand, it’s almost too easy to get run over by big-name stocks with incredibly overpriced valuations.
And while it would be super tempting to run out and buy all the FANG — Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) — stocks you can afford, it also makes sense to look for comparative bargains in the stock market. There are some big names that offer solid value, great fundamentals and a track record of performance that you can bank on.
Here are three large-capitalization dividend stocks that are steals in today’s overvalued stock market. They are well-positioned for positive returns in 2020, but also big enough to withstand any downturn that Mr. Market might throw our way.
Dividend Stocks to Buy: JPMorgan Chase (JPM)
Dividend Yield: 2.6%
The largest bank in the United States by assets, JPMorgan Chase (NYSE:JPM) kicked off the new year with a mammoth earnings report that far exceeded analysts’ estimates. JPM reported earnings of $2.57 per share on profits of $8.5 billion, against estimates of $2.35 per share.
Thanks to a big surge in bond trading and a flurry of trading revenue in the fourth quarter, JPM reported the best year for any U.S. bank in history.
So what can it do for an encore?
Sure, there are naysayers who think that the bank could have a tough 2020, with the Federal Reserve lowering interest rates three times last year and the national deficit spiraling higher. Plus the stock market is in uncharted territory, with a bull market that’s lasted longer than 10 years.
But fundamentally, JPM is a solid stock that belongs in any portfolio. JPM has a forward price-to-earnings ratio of only 12, and a price-to-book ratio of 1.8. That’s insanely cheap for a stock of this quality and durability. And JPM also will pay you to hold it, with a dividend yield of 2.6% and nine consecutive years of dividend growth.
And as I outlined recently, investors should expect big banks to continue to show solid returns in 2020, despite the headwinds that naysayers throw out.
“We certainly don’t think this is as good as it can be,” CFO Jennifer Piepszak told reporters this month. “We continue to see opportunities across the franchise.”
Dividend Yield: 2.5%
Granted, share of Toyota (NYSE:TM) are trading near the top of their 52-week range. And granted, big carmakers are starting to see some slower sales and weakness in the market. But that doesn’t mean that TM stock is a dog.
Not by any means.
In fact, Toyota is an automaker that you can comfortably grab onto. Fundamentally it’s more than sound, with a price-to-earnings ratio of 11.5 and a price-to-book of less than 2. Plus, it offers a solid dividend yield of 2.5%.
But the world’s largest automaker has even more than that going for it. The company’s entrant in the self-driving vehicle arena, its all-battery Lexus, is expected to go on sale this year. Plus, Toyota will undoubtedly generate a lot of buzz when it offers robot taxi rides in downtown Tokyo this year during the Summer Olympics.
Dividend Yield: 5.4%
Although it’s one of the top six oil “supermajors” in the world, Paris-based Total (NYSE:TOT) doesn’t get the attention that you may see from Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) or BP (NYSE:BP).
But that’s just fine if you’re looking to make a little money, and TOT stock is a great place to do it.
Total is a great energy company to hold because it gives you instant diversity into international markets. Total recently announced plans to develop a solar plant in Qatar, and it has subsidiaries around the world, including Abu Dhabi, Angola, France, Turkey, Belgium and Venezuela.
In its most recent earnings report issued in late October, Total reported earnings of $1.13 per share, beating analysts’ expectations of 99 cents per share. The company has an average price target of $67.01 per share, which is a 27% premium over its current share price.
Despite all the activity, TOT shares are a virtual steal, with a forward price-to-earnings ratio of 9.7 and a price-to-book ratio of 1.2. And even better, TOT boasts a frothy dividend yield of 5.4%, making it a sure-fire winner for a dividend portfolio.
Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders. As of this writing, he did not hold a position in any of the aforementioned securities.