Given our view that the economy will still muddle along and that value is the place to be, we remain sanguine about the prospects for our broadly diversified portfolios of what we believe to be undervalued stocks, asserts John Buckingham, value-oriented money manager and editor of The Prudent Speculator.

We also note that inter­est rates have retreated again, making dividend-payers even more attractive, while corporate balance sheets and income statements generally remain healthy.

Not surprisingly, we think that we are invested in good companies that trade for reasonable prices and, in the fullness of time, will prove to be good investments. In ad­dition, while we patiently endure the mood swings of our often manic fellow market participants, we are comforted by generous, and likely increasing, dividend payments.

Stock prices will always be volatile, but we sleep well at night knowing that our portfolio sports trailing and for­ward P/E ratios of 13.1 and 11.8 and a 3.1% dividend yield. Here's alook at two recommendations that are currently out of favor on Wall Street.

Walgreens Boots Alliance (WBA) is a global leader in pharmacy-led, health and wellbeing retail and has more than 18,500 stores in 11 countries, as well as one of the largest global pharmaceutical wholesale and distribution networks.

WBA shares have continued to struggle in 2019 on investor concerns over increased competition, reimbursement pricing pressures and negative headlines concerning the opioid epidemic.

While competition and pricing pressures will continue to exist, many believe that distributors will share a much lower potential burden in the opioid awards or settlements than the manufacturers and marketers of said drugs (and we would argue that a near worst case is already priced into the stock).

On the plus side, WBA’s vast network allows the company to reach 80% of U.S. consumers and an announced partnership with Postmates for delivery of over-the-counter medicines and front-of-the-store items, plus strategic partnerships with clinical partners and community health care shows us that management isn’t standing still.

With a forward P/E ratio under 9, solid free cash flow generation and demographic trends in its favor, we think the long-term positives meaningfully outweigh the challenges. WBA currently yields 3.3%.

Exxon Mobil (XOM) is one of the world’s largest integrated oil and gas companies. While the company has endured a tough period of operating in the energy patch, we think that too much bad news has been priced into the stock.

We believe XOM is setting up for a recovery after a long period of lagging performance, partly due to the realization of positive leverage in its upstream portfolio.

Over the past few years, unlike many competitors, XOM has started numerous major projects, including those in the Permian Basin and Guyana, that should deliver better cash margins versus a number of their legacy businesses.

Management has said that it continues to focus on doubling cash flow and earnings by 2025. XOM is the only energy player with a Aaa credit rating (issued by Moody’s) and its fortress balance sheet and capital discipline give it financial and operational flexibility. The contrarian in us also likes that hardly any Wall Street analysts have an XOM “Buy” rating. The stock offers a rich 5% dividend yield.

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