3 Value Stocks For Higher Rates And Rich Market Valuations

With Jamie Dimon flagging that risks in stocks and long term Treasuries may be underpriced, many investors are rethinking where they want exposure. High deficits, sticky inflation, and an AI boom that some compare to the dot com era have pushed some to look more closely at value stocks with solid balance sheets and dependable dividends. This article focuses on three stocks from a Value Stocks screener that appear positioned to handle higher for longer rates and richer equity valuations, and explains how each one is exposed to the concerns raised in the recent news event.

Crown Holdings (CCK)

Overview: Crown Holdings is a global packaging company that makes recyclable metal beverage cans, food and aerosol containers, glass bottles, and packaging equipment, serving consumer brands across food, pet food, personal care, household, and industrial products. Founded in 1892 and headquartered in Tampa, it operates across the Americas, Europe, Asia Pacific, and transit packaging markets.

Market Cap: US$12.3b

Crown Holdings may appeal if you are looking for a value stock with real-world demand drivers rather than AI hype. The company is tied into everyday consumables, has been growing earnings, and recently beat quarterly expectations on both revenue and EPS while raising full year guidance, which suggests current operations are supporting the story. At the same time, management openly acknowledges high leverage and is prioritizing debt reduction in a higher rate world, so the balance sheet cannot be ignored. With the stock trading on a P/E below packaging peers and supported by buybacks and a dividend, the mix of defensive packaging exposure and balance sheet risk creates a set of trade offs that are worth understanding in more detail.

Crown Holdings’ earnings beat and guidance lift suggest the story may be more about underappreciated resilience than packaging. See how the 3 key rewards and 1 important warning sign might shift your view on its leverage and valuation.

Avery Dennison (AVY)

Overview: Avery Dennison is a materials science and digital identification company that supplies label materials, tapes, graphic films, RFID tags, and branding and information solutions that help consumer brands, retailers, logistics firms, and manufacturers track products, manage inventory, and present their products on shelves.

Operations: Avery Dennison generates most of its revenue from the Materials Group at about US$6.4b, with the Solutions Group contributing roughly US$2.8b and a smaller intersegment offset of US$220.2m.

Market Cap: US$12.1b

Avery Dennison sits at the intersection of physical packaging and digital tracking. This may appeal if you are looking to shift away from richly priced growth stories into a business with steady demand, a 2.41% dividend, and exposure to areas such as RFID and smart labels. The stock trades below some value estimates, and analysts expect mid single digit revenue growth and faster earnings growth, supported by buybacks and disciplined capital returns. On the risk side, earnings have softened in recent years, leverage is high, and key end markets such as apparel and retail have been under pressure. Investors therefore need to weigh balance sheet considerations and slower growth against what may be a discounted entry point into a business tied to supply chain digitisation.

Avery Dennison’s earnings softness and high leverage might be masking a more interesting story around RFID, smart labels, and capital returns. See how the 4 key rewards and 1 important warning sign reframes that balance between pressure and potential.

Forterra (LSE:FORT)

Overview: Forterra is a UK based manufacturer of clay and concrete building products, supplying bricks, blocks, precast floors, walling systems, chimneys, and paving for residential, commercial, and infrastructure projects under brands such as London Brick, Thermalite, and Bison Precast.

Operations: Forterra generates about £307.7m of revenue from Bricks and Blocks and £81m from Bespoke Products, with small intersegment eliminations of £2.7m, almost entirely from customers in the United Kingdom at £386m.

Market Cap: £274.9m

Forterra provides exposure to a mature, UK focused construction materials business that sits firmly in the value segment, with relatively low valuation multiples and a deep discount to some fair value estimates. The company is investing in automation, capacity and lower carbon products. These factors are balanced by clear risks, including heavy reliance on UK new build housing, funding that depends entirely on external borrowing, and an unstable dividend history.

Forterra’s low valuation and automation push could be setting up a turn that many investors are not pricing in yet, but the real story only comes into focus once you read the 3 key rewards and 2 important warning signs

The three stocks covered here are just a starting point, and the full Value Stocks screener surfaced 15 more companies in the Value Stocks screener with similarly compelling balance sheets, dividend profiles, and valuation stories. Use Simply Wall St to identify, filter, and analyze the specific catalysts and narratives that matter to you so you can focus on the highest conviction ideas in this value theme.

Take Control of Your Investment Journey

If Forterra or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Fresh Alternatives Before Others Catch On?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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