3 Value Stocks Near 52-Week Lows Worth Buying

Image source: Bank of New York Mellon.

While these aren't concerns to sweep under the rug, they're not exactly a big worry for non-traditional banking entity Bank of New York Mellon, or BNY Mellon for short. BNY Mellon's focus is on high net worth clients, and serving as account custodian for institutional investors. That's a big difference from the bread and butter of deposits and loans that typically makes the banking world go round.

In BNY Mellon's fourth-quarter results, released in January, we saw just how important noninterest revenue is to the company. Investment service and other revenue totaled $1.93 billion, compared to just $632 million in net interest revenue. Adding up all of the banks' operating segments, nearly 80% of BNY Mellon's revenue derives from noninterest income. This makes BNY Mellon less vulnerable to interest rate stagnation and better positioned to survive an economic downturn relative to its peers.

Looking ahead, BNY Mellon is valued at less than 11 times forward earnings, and shareholders have witnessed a steady climb over the last four quarters in tangible book value. Although its dividend yield of 2% might be a bit low relative to its peers, you can take comfort that BNY Mellon's non-traditional business model should provide some degree of protection in down markets, and it has the potential to thrive in an expanding economy.

A smoking value stock

Finally, value stock investors looking for a good deal, and a smoking good dividend yield, would be wise to take a gander at British American Tobacco , one of the five largest tobacco producers in the world.

The biggest concern for tobacco producers has been the link established between smoking and the risk of developing heart disease, lung cancer, COPD, asthma, and a host of other ailments. Global cigarette volumes remain challenged, with comparable volume for British American Tobacco falling by 0.8% in 2015. Inclusive of its acquisition of TDR, shipped volume fell by 0.5% to 663 billion.

Image source: Pixabay.

In spite of this drop in volume, a mix of geography, pricing power, and innovation should work in BTI's favor, potentially making this a value stock worthy of your consideration.

First, British American Tobacco operates in about 80% of all countries worldwide, with the United States not among that 80%. The U.S. is particularly known for its War on Tobacco and its notoriously harsh tobacco laws. BTI will encounter some tough restrictions in countries like Australia, but for each country that introduces tougher tobacco laws there are seemingly two more witnessing a burgeoning middle-class looking for simple luxuries, such as the ability to smoke cigarettes. This gives BTI a pretty substantial global growth opportunity, and it removes many of the issues U.S. tobacco producers face.

Secondly, the addictive quality of nicotine gives BTI substantial pricing power. As we've witnessed in the U.S., consumers will pay more to get their hands on tobacco products. This means BTI can increase the price of its products to counteract any volume weakness. In fact, on a constant currency basis the company's adjusted EPS grew by 10% in 2015.

Finally, BTI is relying on innovation to counter some of the drop in cigarette volume. By pushing its electronic cigarette brand Vype, as well as other tobacco alternatives, BTI believes it can diversify its revenue stream away from just traditional tobacco products.

Looking at a forward P/E of less than 16, and sporting a 2.8% yield, this could prove to be a smoking hot value stock.

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The article 3 Value Stocks Near 52-Week Lows Worth Buying originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy .

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