Here Are The Cheapest Stocks In Each Sector Of The S&P 500

Dec 22, 2021

Here Are The Cheapest Stocks In Each Sector Of The S&P 500

A rocky month has not deterred the S&P 500 from trading at the high end of its historical valuations.

Even though the S&P 500 trades at much higher valuations than Wall Street analysts expected, technology and consumer sectors sell for considerably higher multiples. Other sectors, such as energy or finance, have substantially lower values.

However, there are low-cost equities in all 11 S&P 500 sectors. It might be the same as a basketball player who is always open since many discounts might be for a valid reason. Just as rival teams may be better off focusing their defense elsewhere on the court, certain firms' stocks may be inexpensive for a reason. Their expansion may be limited, or one-time variables may be influencing predicted 2022 outcomes.

Examining the market on a regular basis for the most significant differences in valuations can be a solid start for further analysis. The following equities are among the cheapest in all 11 sectors of the S&P 500:

The S&P 500 consumer goods and services segment is the most expensive in the index, fetching more than 33 times estimated 2022 profits. It can be primarily attributed to Tesla (TSLA) and Amazon (AMZN) occupying high multiple positions. These two stocks account for 40% of the segment's capitalization and are priced at 121 times and 68 times 2022 projected earnings, correspondingly.

Three U.S. housing construction companies are at the opposite side of the valuation range in the segment: PulteGroup (PHM), D.R. Horton (DHI), and Lennar (LEN). These are trading for less than 8 times the projected income in 2022.

The residential market in the United States has been booming during the coronavirus times, with prices at or around historic highs in some regions, a scarcity of available houses for sale, and developers' earnings soaring. Investors, on the other hand, do not think that this will continue indefinitely. The low values of PulteGroup, D.R. Horton, and Lennar show what happens to equities of firms with cyclical end markets: Multiples shrink towards the height of the cycle as investors fear that the present level of profits will not be stable.

The present housing boom may have repercussions as the millennials enter their home-buying ages, and there has been a scarcity of residences constructed since the economic crisis a decade ago. Low prices of homebuilder stocks provide an intriguing entry point.

Shares of the technology sector as a whole are trading at 28 times next year's expected earnings, whereas Western Digital (WDC) is trading at only 6.8 times. Once more, cyclicality is at the root of this discount.

As a memory chip maker, Western Digital works in an extremely cyclical industry, with periods of heightened demand and sales often followed by periods of overstocking and price declines. During the pandemic, a surge in demand for P.C.s, phones, and cloud platforms has maintained inventories low and prices high for Western Digital's goods. However, investors understand this will not last forever.

APA (APA), Coterra Energy (CTRA), and Diamondback Energy (FANG) are the three least expensive companies in the S&P 500's lowest-priced segment, energy. The industry in total trades for little more than 11 times next year's expected profits, while its three lowest-priced stocks — all U.S. shale oil or gas companies — sell for 5 to 7 times. Investors are concerned about the future of fossil fuel energy as the globe shifts toward green sources, and they are reluctant to spend on oil and gas equities.

Healthcare equities also tend to be extremely inexpensive in the S&P 500. New pharma companies Viatris (VTRS), which was spun off from Pfizer (PFE) and grouped with Mylan last year, and Organon (OGN), which was spun off from Merck the previous summer, have the lowest prices in the market. Recently, spin-offs haven't performed well, and the brand-new equities and their generic names might fly under the radar for those who don't pay much attention to the healthcare industry specifically. Investors are more optimistic about Organon than Viatris.

AT&T (T) and Discovery (DIS) are the two lowest-priced companies in the S&P 500 telecommunication category, and both are involved in big mergers and acquisitions. Both are trading at around 7.5 times estimated profits for the coming year, compared to the group median of 20.8 times. AT&T will split off its WarnerMedia unit and consolidate it with Discovery around the middle of the following year, restoring the iconic American firm to its origins. Both firms have a ton of potential. Many shareholders may wait until the deals complete next year to decide whether to gamble on streaming entertainment via Discovery or wired and cellular telecom services via AT&T.

Subscribe Our Newsletter

Pfizer’s Covid Pill Gets Green Light. Investors Are Starting to Pay Attention to the Stock
Pfizer’s Covid Pill Gets Green Light. Investors Are Starting to Pay Attention to the Stock

As Barron's noted in November, Paxlovid's performance demonstrates that the company's choice to divest itself of all but its breakthrough biopharma business in 2019 was a wise one.

Companies
Why These Are The Worst Stocks To Own Right Now: Goldman Sachs
Why These Are The Worst Stocks To Own Right Now: Goldman Sachs

Even if equities are still on autopilot, Goldman Sachs strategists warn that not every section of the market is a long-term buy. Stocks with strong exposure to tight labor markets, which run the risk of eroding profit margins as wages are boosted, are among the worst to invest in a US economy striving to recover from the COVID-19 epidemic.

Stocks
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

What is a Bull Flag? How Does it Differ from a Bear Flag?
Learn what a bull flag is, what types exist, how to use them in trading practice, and what differences there are with bearish flag patterns.

discover
execution of the martingale strategy

Alexander

What Is the Martingale Strategy in Trading

The martingale strategy is an extremely risky method for increasing profits in games of chance. But how useful is it in trading?

Trading
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.