2 ASX value shares that are must-buys for Australians in November

Price is what you pay. Value is what you get.

| More on:
A couple makes silly chip moustache faces and take a selfie on their phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

For those who own ASX value shares, I'm sure many would agree with the investment legend Warren Buffett's adage: "Whether it's socks or stocks, I like buying quality merchandise when it's marked down".

And what is investing anyway, if not receiving more in value for what you pay?

For investors on the hunt for value shares to buy this month, brokers are bullish on two particular names.

Both Telstra Group Ltd (ASX: TLS) and Premier Investments Ltd (ASX: PMV) have gotten the thumbs-up from top brokers in recent weeks, both trading at potential discounts. Let's see what the experts say.

ASX value shares for November

Telstra is first on the list of ASX value shares for November, especially for those seeking current income.

The stock is rated a buy from consensus, according to CommSec data. It says the median analyst expects Telstra to earn 20 cents per share in FY25.

This sees it trade on a forward price-to-earnings (P/E) ratio of 19 times, below most communication services stocks.

Goldman Sachs analysts see plenty of value in Telstra's shares at current levels, pointing to its stable growth outlook and strong yield.

On face value, it says Telstra's valuation looks "relatively full". But, after making adjustments for NBN payments and dividend forecasts in its modelling, it says the valuation "is more attractive".

The broker is forecasting fully franked dividends of 19 cents per share in FY25, rising to 20 cents the year after.

With Telstra's current share price of $3.89, this translates to forward yields of 4.88% and 5.14%, respectively.

The broker also likes Telstra's potential to unlock further value by monetising its InfraCo Fixed assets, valued between $22 billion and $33 billion.

It rates the ASX value share a buy with a price target of $4.35 apiece.

Premier Investments: Tailwinds for growth

Premier Investments is the company behind well-known brands like Peter Alexander and Smiggle. After being heavily sold in September, brokers see the stock as a potential ASX value share.

Analysts at Bell Potter believe there's still more room for the company to grow, especially after Premier's recent decision to divest its Apparel Brands division to Myer Holdings Ltd (ASX: MYR).

The deal, valued at around $601 million, could boost earnings, and Premier shareholders will receive shares in Myer.

Bell Potter rates the stock a buy with a price target of $38 apiece.

Meanwhile, Morgan Stanley also rated the ASX value share a buy last month. It values the stock at $39.50 following the Apparel Brands sale.

Despite the price change since the deal was announced, the broker still thinks there's value to be drawn.

Foolish takeout

Brokers rate these two ASX value shares as buys and see plenty of upside in both, including in capital growth and income.

Telstra trades on a forward P/E of 19 times, whereas PMV sells on a trailing P/E of about 19 times as well.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Value Investing

A young man goes over his finances and investment portfolio at home.
Growth Shares

Why earning 4% to 5% in a term deposit 'isn't that attractive'

The upside is capped on the most risk-less investments.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Value Investing

2 cheap ASX 200 shares down over 30% this fundie just bought

There's still value opportunities in this frothy market.

Read more »

Two excited woman pointing out a bargain opportunity on a laptop.
Value Investing

How to find cheap ASX value shares in the current market

Where is the value in such a hot market?

Read more »

A boy leaps and flaps his arms as he tries to fly with some birds on the shoreline of the beach.
Value Investing

The ASX is soaring to new heights, but Aussie investors can still seize profits

There are still ways to invest prudently when the markets are at record highs...

Read more »

Woman with spyglass looking toward ocean at sunset.
Value Investing

How to find ASX value shares when the market's at an all-time high

Finding value in a frothy market can be a challenge.

Read more »

A young male builder with his arms crossed leans against a brick wall and smiles at the camera as the Brickworks share price climbs today
Value Investing

Looking for value shares? This ASX 200 gem looks like a no-brainer buy to me!

Is this dividend favourite shaping up as an ASX value gem?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Value Investing

Down 11% this year, is this ASX bargain stock too cheap to ignore?

Does this tick the value investors' checklist?

Read more »

Three sky divers 'falling with style'.
Value Investing

Down more than 10% in 7 months, I'm backing these 3 ASX shares to reverse that — and then some! — by 2025

These shares look oversold to me.

Read more »