Five Value Stocks to Buy as Market Dips

J.M. Smucker, TreeHouse Foods, Lincoln Educational Services, General Mills and Church & Dwight are rated 'buy.'
By Jake Lynch ,

BOSTON (TheStreet) -- Despite last month's dip, the stock-market rally may have another leg. Undervalued shares are the safest way to go until corporate earnings recover. The following five stocks are poised to gain.

5. J.M. Smucker

(LINC) - Get Report

sells jams and jellies.

The numbers

: Fiscal second-quarter net income nearly tripled to $140 million, as earnings per share climbed 26% to $1.18. Revenue grew 52% to $1.3 billion. Smucker's operating margin widened from 11% to 18%. Its 0.3 debt-to-equity ratio indicates modest leverage.

The stock

: J.M. Smucker increased 34% during the past year, beating the

Dow Jones Industrial Average

and

S&P 500 Index

. The stock trades at a price-to-earnings ratio of 17, a discount to food-products peers. The shares offer a 2.3% dividend yield.

4. TreeHouse Foods

(THS) - Get Report

sells pickles and non-dairy coffee creamer.

The numbers

: Third-quarter profit more than doubled to $28 million, or 85 cents a share, as revenue inched up 1% to $379 million. TreeHouse's operating margin extended from 7% to 8%. A quick ratio of 0.6 indicates poor liquidity. A 0.7 debt-to-equity ratio reflects conservative leverage.

The stock

: TreeHouse rose 45% during the past year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a discount to food-products peers. TreeHouse doesn't pay dividends.

3. Lincoln Educational Services

(LINC) - Get Report

provides career education.

The numbers

: Third-quarter profit more than doubled to $14 million, or 50 cents a share. Revenue rose 48% to $148 million. Lincoln's operating margin stretched from 10% to 16%. The company has an admirable financial position, with $38 million of cash and $37 million of debt.

The stock

: Lincoln Educational Services increased 41% during the past year, beating the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 14, a discount to diversified consumer-services peers. Lincoln doesn't pay dividends.

2. General Mills

(GIS) - Get Report

sells cereal and other food products.

The numbers

: Fiscal second-quarter profit increased 50% to $566 million, or $1.66 a share. Revenue inched up 2% to $4.1 billion. The company's operating margin widened from 12% to 22%. A quick ratio of 0.6 reflects weak liquidity. A 1.1 debt-to-equity ratio indicates sizable leverage.

The stock

: General Mills advanced 20% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to food-products peers. The shares offer a 2.7% dividend yield.

1. Church & Dwight

(CHD) - Get Report

sells household products.

The numbers

: Third-quarter profit soared 43% to $70 million, or 98 cents a share. Revenue inched up 2% to $646 million. Church & Dwight's operating margin ascended from 15% to 18%. A quick ratio of 1.1 indicates adequate liquidity. A debt-to-equity ratio of 0.5 reflects conservative leverage.

The stock

: Church & Dwight climbed 11% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a premium to household products peers. The shares offer a 0.9% dividend yield.

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