Deutsche Bank Prefers These Low P/E Stocks in a Market Correction

Ford Motor Co. (NYSE: F) is a top brand name recognized by customers, and the iconic company remains America’s best-selling vehicle brand. The company’s F-150 truck remains the top-selling truck and has almost gained mythical status in some parts of the country. It has avoided some of the negative headlines that have plagued its competition, and the aging of the American consumers’ vehicles should help to keep sales strong for the foreseeable future. Investors are paid a respectable 2.9% dividend. The consensus price target for Ford is $18.53. The stock closed Friday at $16.56.

Microsoft Corp. (NASDAQ: MSFT) is another old-school tech name that has had an outstanding run over the past year. With new leadership in place, and an apparent pickup in what had been poor PC sales, the company may be poised for an even better future. The company’s new Surface Pro 3 may become a hit with consumers, but the hybrid device has already been well received by early adopters in the health care industry. Seattle Children’s Hospital, one of the top children’s hospitals in the United States, recently selected the Surface Pro 3 to replace its existing laptops for electronic medical records management. Investors are paid a solid 2.7% dividend. The consensus price objective is $42.10. Microsoft closed trading Friday at $41.23.

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Pfizer Inc. (NYSE: PFE) trades at a low 14 times earnings and is very cheap to the overall market. The company updated investors and physicians at a recent conference on the Phase 2 trial results on palbociclib for advanced breast cancer. The doctors on the breast cancer panel at the conference were much more optimistic than previously about the possibility of palbociclib being filed and approved on Phase 2 data in first line advanced breast cancer. Encouraging preliminary/interim overall survival data was presented at AACR conference in the spring. Investors are paid a 3.5% dividend. The consensus price target is $34.55. Pfizer closed Friday at $29.53.

Prudential Financial Inc. (NYSE: PRU) is a top insurance name to buy that trades at a low 9.3 times forward earnings. With multiple products offered to clients, the company is a financial services leader with more than $1.1 trillion of assets under management as of December 31, 2013, and operations in the United States, Asia, Europe and Latin America. Investors are paid a 2.4% dividend. The consensus price target is $99.35. Prudential closed Friday at $88.14.

Verizon Communications Inc. (NYSE: VZ) is the large cap leader in the telecommunications sector. It is also a top holding now for many of the top mutual fund and hedge fund portfolio managers. Verizon and Netflix have been feuding in recent weeks over which company is to blame for slow streaming speeds for programming. Now, government regulators are stepping in to figure out who is really at fault. The outcome could prove to be interesting. Investors are paid a 4.3% dividend. The consensus price target is $53.85. Verizon closed Friday at $49.18.

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While the Deutsche Bank correction data are ominous, they also point out that corrections tend to be fast, usually taking about 28 trading days. There could be a quick dip this summer before the market continues the slow grind higher to 2,000 on the S&P 500. Investors may be well served to take some profits and have cash ready to add these low P/E earnings leaders.