2 "International" Stocks to Buy for Steady Growth and Sound Value

Two stocks that have continued edging higher to start the month are American International Group (AIG) and Marriott International (MAR). Both companies offer valuable exposure to their respective industries with operations worldwide.

Now may be a good time to buy both of these conglomerates as they remain sound investments and their valuations are attractive at the moment

Sound Value

Intriguingly, as a leading global insurance provider, American International Group currently has an “A” Zacks Style Scores grade for Value. At current levels, AIG stock is very attractive for its wide range of property casualty insurance, life insurance, retirement solutions, and other financial services in more than 80 countries.

Similarly, among hotel operators, Marriott International gives valuable exposure to investors as a leading worldwide hospitality company focused on lodging management and franchising. Marriott has a “B” Style Scores grade for Value and remains attractive for its expansive reach with the company operating and franchising over 8,400 properties across 138 countries.

P/E Valuation: Attributing to their high-Value grades are AIG’s and Marriott’s price-to-earnings valuations. Trading at $56 a share AIG trades at just 8.5X forward earnings which is on par with the industry average and nicely beneath the S&P 500’s 19.9X.

Furthermore, AIG is a leader in its space and trades 41% below its decade-high of 21.7X and at a 26% discount to the median of 11.5X.

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Image Source: Zacks Investment Research

Marriott’s P/E valuation isn’t as eye-popping at 21.5X forward earnings but this is still near the benchmark and roughly on par with its industry average of 20.2X. Plus, Marriott is an industry leader and trades attractively relative to its past. Trading at $177 a share, Marriott still trades well below its own decade-long high of 301.5X and offers a slight discount to the median of 23.7X.

Steady Growth

As mature and renowned companies, AIG and Marriott’s growth is still intriguing and has become more attractive with earnings estimate revisions rising for the current fiscal year and FY24.

In this regard, AIG’s earnings are now forecasted to soar 44% this year at $6.56 per share compared to EPS of $4.55 in 2022. Even better, AIG’s FY24 earnings are expected to jump another 20% at $7.88 per share. On the top line, sales are forecasted to be up 8% this year and rise another 3% in FY24 to $50.77 billion.  

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Looking at Marriott, earnings are projected to climb 25% in FY23 at $8.39 per share compared to EPS of $6.69 in 2022. Fiscal 2024 earnings are expected to rise another 8% at $9.08 per share. Total sales are forecasted to jump 13% this year and rise another 4% in FY24 to $24.35 billion.

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Image Source: Zacks Investment Research

Respectable Dividends

Also intriguing to investors are AIG and Marriott’s respectable dividends. AIG especially stands out with a 2.29% yield at $1.28 per share. This is above the S&P 500’s 1.48% average and its industry average of 2.10%.

As inflation eases and AIG continues its post-pandemic growth and recovery it’s quite possible the company will be even more generous to shareholders. To that point, AIG stock had just hit its peak dividend yield at 6.6% prior to the pandemic as shown in the chart below.

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Image Source: Zacks Investment Research

Considering most Hotel operators are focused on sustaining growth and expansion rather than providing a dividend, Marriott's yield is also respectable at $1.15% or $2.08 per share. Marriott’s dividend should also increase as we move further from the pandemic and global economic headwinds subside.  

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Image Source: Zacks Investment Research

Bottom Line

With both sporting a Zacks Rank #2 (Buy) AIG and Marriott stocks are up 7% and 5% respectively to start the month. Strong value, steady growth, and earnings estimate revisions trending higher over the last 60 days are good reasons to buy stock in both conglomerates.  

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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