Prudential Financial Inc (PRU), Freeport-McMoRan Copper & Gold Inc. (FCX), Apple Inc. (AAPL): Three Stocks to Consider If Increasing Equity Exposure

Always watch Apple

The Street has been claiming Apple Inc. (NASDAQ:AAPL) is a value play since the steep selloff earlier this year. Over the last couple months shares have stabilized somewhat, settling in the low to mid $400 range, and guess what? Shares still look inexpensive by conventional metrics.

The majority of the sharp declines can be attributed to a deflated price to earnings multiple, not significant earnings declines. While increasing competition may be eating away the company’s dominance within the majority of its business segments, the company is truly a value play at these levels considering the enormous stock pile of cash the company holds on the balance sheet.

The dividend yield, currently 2.85%, still beats out the 10 year treasury by over 100 basis points. Should Apple Inc. (NASDAQ:AAPL) never release a single game changing product ever again, I feel confident in saying it will at least be able to maintain and increase this payout.

However, if one of Apple Inc. (NASDAQ:AAPL)’s rumored products does hit the market, whether it be wearable technology, a cheaper iPhone, or a interactive television, the stock could get a boost.

Lets compare Apple Inc. (NASDAQ:AAPL) to another old technology value play, Microsoft Corporation (NASDAQ:MSFT), which, in comparison, trades at 12 times earnings, 3.43 times book, and for what? A failing surface tablet, steep discounts, and an almost dead PC market. I can find no explanation in why Apple Inc. (NASDAQ:AAPL) would be trading at a discount when so much potential is still in the tank.

Wrap-Up

If your looking to get some skin in the game, or perhaps increase your equity investments, after the market has reach new all time highs, you should consider an investment in companies that haven’t run on expanding multiples. The three previously mentioned companies all trade at low price to earnings multiples while holding the potential for growth over the long term.

The article 3 Stocks to Consider If Increasing Equity Exposure originally appeared on Fool.com and is written by Nathaniel Matherson.

Nathaniel Matherson has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Freeport-McMoRan Copper & Gold. Nathaniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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