IBM
> 9.6 times expected earnings

International Business Machines Corp. (NYSE: IBM) is somehow still one of the Dow Jones industrials, and it has to be the most hated technology stock with a $100 billion or more market cap. CEO Ginni Rometty has managed to keep running this company since taking over in early 2012, despite the stock losing more than one-third of its value since 2013 while the market has skyrocketed. She is one of the best-paid CEOs in American as well. Now IBM is acquiring Red Hat to lead in the hypercloud and virtualization, among other key initiatives. The market continually discounts IBM’s critical initiatives due to its old-school legacy IT-services operations. Paying out less than half of its normalized EPS still generates a 4.65% dividend yield for what some more brave value investors are calling a long-term turnaround (even if it hasn’t been able to turn around in the past six years or so).

After normalized earnings of $13.81 per share in 2018, IBM’s consensus estimates are $13.91 EPS in 2019 and $14.16 in 2020. An anticipated 3.2% revenue drop in 2019 is expected to see a gain of less than 1% in 2020, prior to factoring in the Red Hat $4.5 billion expected contribution.

Lincoln National
> Less than seven times expected earnings

Lincoln National Corp. (NYSE: LNC) is usually considered a life insurance company, but its four main segments are annuities, retirement plan services, life insurance and group protection. The company is valued at a discount to two key book-value-per-share metrics and it has continued to buy back its own stock while still offering close to a 2.3% dividend yield.

At about $64.50 per share, Lincoln National had earnings of $8.48 per share in 2018 is expected to have $9.32 EPS in 2019 and $10.38 in 2020.

Macy’s
> Seven times expected earnings

Macy’s Inc. (NYSE: M) is the king of value stocks in the domestic retail game. The problem is that no one wants to pay for its earnings stream when Amazon and a plethora of other online retailers have chiseled away the company. Even rival Kohl’s scored a partnership with Amazon that just as easily could have been a Macy’s deal. The company also has continued to close down sub-optimized stores in malls around America. While Macy’s has seen its earnings slide, the reality is that revenues have tailed off only marginally from three years ago. Macy’s is offering investors right at a 7% dividend yield while it struggles to revamp its stores and learn to get buyers away from their computers and smartphones.

Even after a fresh earnings beat, Macy’s saw its shares trade down slightly to about $21.50. That’s almost 50% lower than its 52-week high, and its stock was last seen down almost 70% from its peak in 2015. The $3.09 EPS consensus for 2019 is expected to be $2.90 in 2020, but sales are not expected to fall.

Navient
> About 6.5 times expected earnings

Navient Corp. (NASDAQ: NAVI) may not be popular among many households due to its association with student loans, but many value investors would say that those students taking loans did so by their own choice. While sales are expected to be down 10% in 2019 and down in mid-single-digits in 2020, Navient’s EPS numbers are expected to grow. At close to $13.50 a share, Navient’s value may seem less now that it has risen from under $9 during the peak-selling pressure last December. Still, analysts generally now expect the stock to keep rising from its $3.2 billion market cap.

Navient had $2.09 EPS in 2018, and consensus analyst estimates were last seen at $2.11 EPS for 2019 and $2.18 for 2020. It offers new investors a dividend yield of almost 4.75%.

Owens-Illinois
> Less than six times expected earnings

Owens-Illinois Inc. (NYSE: OI) manufactures and sells glass containers to food and beverage manufacturers around the world. It’s considered an unexciting business with very small, low-single-digit sales growth expectations. The company’s post-earnings reaction after missing estimates has been atrocious, with a 15% drop so far in May. A fresh Wells Fargo view called for as much as 40% upside based on its value and business position.

After earnings of $2.72 per share in 2018, Owens-Illinois has earnings estimates of $2.90 per share for 2019 and $3.19 in 2020. Despite being valued at less than six times earnings, it has only a 1.2% dividend yield.

Xerox
> About eight times expected earnings

Xerox Corp. (NYSE: XRX) is a technology stock often forgotten about. Many younger workers might not even know about or care about the company, even if it has been around forever. After a recent breakup of the company led by activist Carl Icahn, Xerox shares looked like they were on par to almost double from the lows at one point earlier in 2019. So what if people Icahn’s age were the last ones to use Xerox machines and the like? Paper hasn’t exactly disappeared from the office environment. This company is difficult for some investors to think of long term, but the current share price still generates a 3.1% dividend yield, even after considering how much it has run up.

With a share price of about $32, Xerox’s normalized $3.46 EPS is projected to rise to $3.89 in 2019 and $4.13 in 2020. That’s about 8.2 times expected current year earnings and 7.75 times next year’s earnings, with a 6% expected revenue drop in 2019 and a 4% revenue drop in 2020.

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