7 Blue Chip Stocks with Low PE Ratios

04. Wells Fargo & Company (NYSE:WFC)

Forward Price to Earnings (P/E) ratio: 11.33

Number of Hedge Fund Holders: 83

Wells Fargo & Company (NYSE:WFC), one of the largest U.S. financial institutions, has consistently maintained a solid reputation as a blue-chip stock, making it a valuable inclusion in a portfolio focused on stability and long-term growth. As of October 11, 2024, the company’s forward price-to-earnings (P/E) ratio stands at an attractive 11.33, placing it among the blue-chip stocks with low P/E ratios. This makes it a compelling investment for value-seeking investors, particularly in an era where many financial stocks face heightened volatility.

In its Q2 2024 earnings, Wells Fargo & Company (NYSE:WFC) delivered strong financial results, beating expectations with an earnings per share (EPS) of $1.33 against an anticipated $1.29. Net income for the quarter totaled $4.9 billion, demonstrating the firm’s ability to generate substantial profits even in a challenging economic landscape. While net interest income declined by 9% year-over-year due to higher funding costs and lower deposit balances, the company offset these declines with robust fee-based revenue growth. This growth was particularly driven by gains in investment advisory, trading activities, and investment banking, highlighting Wells Fargo & Company (NYSE:WFC) diversified income streams.

Additionally, Wells Fargo & Company (NYSE:WFC) has made significant strides in cost management, driving efficiency through headcount reductions for 16 consecutive quarters. Its strategic initiatives, including launching new credit card offerings and expanding its corporate investment banking, position the company for future growth. Credit card spend and new account growth have remained strong, bolstering expectations for profitability as the portfolio matures.

From a financial perspective, the company continues to demonstrate strength. Average deposits grew $4.9 billion in Q2 2024, driven by growth in customer-facing businesses. Moreover, the company is maintaining a strong capital position, enabling it to return value to shareholders. Wells Fargo announced plans to increase its dividend by 14% and repurchased over $12 billion in common stock during the first half of the year, signaling confidence in its financial health.

In summary, Wells Fargo & Company (NYSE:WFC) forward-looking strategies, combined with its solid fundamentals and low forward P/E ratio, make it an attractive choice for investors seeking exposure to blue-chip stocks with growth potential.