3 stocks to watch in 2024

The stock markets are seeing incredible growth in 2024. Since the beginning of the year, the S&P 500 has risen by an astonishing 21.26%. While it may seem that investors are already over-satisfied, there are still quality stocks that are available at reasonable prices.

Let's take a look at three value stocks that offer decent dividends and may represent a great opportunity.

Honeywell: A step toward recovery and growth

Honeywell $HON is known for its steady dividend, with a 4.6% dividend increase on September 27, 2023, taking the annual dividend from $4.32 to $4.52 per share. The move solidifies Honeywell's position to celebrate its 15th consecutive year of dividend increases in 2025.

Despite recent disappointing growth related to underutilized opportunities in automation, aerospace and energy transition, there has been a change in leadership at the company. The new CEO, Vimal Kapur, has announced strategic adjustments focused on key megatrends. The company plans to invest $22 billion in acquisitions and share buybacks between 2023 and 2025, demonstrating its focused approach to restoring investor confidence.

Phillips 66: Opportunity in the energy sector

Phillips 66 $PSX is another value stock that is well positioned. The stock is down more than 17% in the past six months, which is related to a 12.3% drop in oil prices. However, this price cut could be a great opportunity for investors looking to acquire a stock with a dividend yield of 3.5%.

Even though operating cash flow declined to $3.3 billion in the first half of 2024 (compared to $4.5 billion in 2023), Phillips 66 was able to reduce costs by $100 million and its refining capacity reached 98% utilization, its best result in more than five years. The company plans to return 50% of operating cash flow to shareholders in the form of dividends, making the stock attractive even in a downturn in commodity prices.

Delta Air Lines: a great opportunity in the airline industry

Delta Air Lines $DAL trades at a price-to-earnings (P/E) ratio of just 7.7, presenting a favorable opportunity for investors. Although Delta has $19.2 billion in net debt, management is focused on reducing it, with free cash flow expected to be $3 billion to $4 billion in 2024.

Investor concerns about the cyclical nature of the airline industry have proven overblown as Delta and United Airlines have opted to cut less profitable routes. This has a positive impact on revenue and, with interest rates expected to fall, the airline industry could benefit from greater consumer spending flexibility.

Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.

TheMotleyFool Source.