The S&P 500 has been hitting record highs throughout September, but it hasn’t always been a smooth ride. The index has faced resistance levels, where buying activity weakens, giving sellers an opportunity to step in. This choppy price action, while challenging for ETF investors, can be a chance to discover hidden gems – stocks with strong fundamentals that haven’t caught the attention of the broader market.
To find these hidden gems, we used the MarketBeat stock screener to identify S&P 500 companies trading within 30% of their 52-week low, with a forecast for at least 10% earnings growth in the next 12 months. Here are three standout stocks worth considering:
SLB Inc. (SLB)
Formerly known as Schlumberger, SLB is an oilfield services company whose revenue and earnings are less sensitive to the price of crude oil but highly responsive to capital expenditure (CAPEX) spending. With major oil companies making up for years of underspending as oil prices rise, SLB has reported double-digit revenue and earnings growth in recent quarters. The company’s strong performance is expected to continue as oil prices are projected to climb further in 2025, regardless of the election outcome. SLB’s 2.5% dividend yield further enhances its appeal, especially with the stock trading near two-year lows. MarketBeat analysts forecast a consensus price target of $65.29 for SLB, representing a potential 48.5% upside from its current price.
Albemarle Corp. (ALB)
The Chinese government’s recent stimulus efforts have led to a strong recovery in the Chinese stock market. This recovery is positive for electric vehicle (EV) sales, but many investors remain hesitant about Chinese stocks. Albemarle Corp., a lithium miner, provides an alternative investment opportunity. While its stock has declined in 2024 due to a dip in lithium prices and free cash flow, Albemarle’s turnaround is likely on the horizon. Although analysts currently maintain a Hold rating, ALB stock appears to be forming a bottom around $72. MarketBeat analysts forecast a price target of $117.10 for ALB, representing a 26% upside. Investors also benefit from a dividend that has been increased for 30 consecutive years.
McKesson Corp. (MCK)
McKesson Corp., a global leader in healthcare, partners with care providers, pharmacies, and manufacturers to deliver essential medicines, products, and healthcare services. Despite experiencing a recent decline in its share price due to delays in getting GLP-1 drugs, McKesson remains undervalued and well-positioned for growth. While supply chain concerns could weigh on the stock in the short term, analysts forecast a 10% increase in earnings and maintain a Moderate Buy rating, with a consensus price target of over $613, representing a 24% upside. McKesson also offers a dividend that has increased at an average rate of 11% in the last three years, and with share buybacks complete, the company may be poised to increase the payout further.
These three stocks represent promising opportunities for investors seeking upside potential and attractive dividend yields. While market conditions may be challenging, these companies’ strong fundamentals and attractive valuations make them worthy of consideration.
