It’s too early to say the market has turned the corner, but some analysts suggest that equities could be at the beginning of a bull market. The banking crisis appears to be contained. And if the Federal Reserve decides to pause the rise in interest rates, these same analysts suggest the rally could turn into something much bigger. That’s why now is a good time to look at buying bargain growth stocks. 

One metric to use for finding undervalued stocks is the price-to-earnings (P/E) ratio. This tells you how much of a price you’re paying per share for every dollar of a company’s earnings. While not a perfect indicator by any means, it can serve as a useful starting point.  At the time of this writing, the current S&P P/E ratio is approximately 21x. A common feature of each of these bargain growth stocks is that they are trading below that average. This makes them good candidates to outperform when the market does return to growth.  

PFE	Pfizer	$40.80
LOW	Lowe’s	$199.97
AAP	Advance Auto Parts	$121.61
URI	United Rentals	$395.76
HAL	Halliburton	$31.64
OGN	Organon & Co.	$23.52
HBM	Hudbay Minerals	$5.25

Pfizer (PFE) 

Multinational biotechnology companies like Pfizer (NYSE:PFE) tend to be a bit predictable if not a little boring. Revenue and profits come from their commercially available medicines. And the best ones have a deep pipeline of drugs and therapeutics in development.  But nothing’s been boring about owning PFE stock in the last two years. The stock rocketed higher when it won the race to earn an emergency use authorization for its Covid-19 vaccine, Comirnaty. However, the stock has plunged more than 25% as investors expect demand for the vaccine to wane. 

This is an example of where investors have to use a wider lens. In March 2023, Pfizer announced it would pay $43 billion to acquire Seagen (NASDAQ:SGEN). This acquisition will enhance Pfizer’s oncology portfolio, and the company expects it to add $10 billion in revenue by 2030.  

That’s a long time away, but Pfizer fits into the bargain growth stocks category. The company’s P/E ratio is just over 7x. And analysts give PFE stock a mean price target of $53.10 which is 31% higher than the current price. Plus, the company pays a dividend with an attractive 4.07% yield, and it has been increasing the dividend in each of the last 12 years.  

Lowe’s Companies (LOW) 

After the collapse of the housing market, Lowe’s Companies (NYSE:LOW) is looking like a bargain growth stock. However, I understand if some investors are wondering when that growth will emerge. Revenue and earnings for the home improvement giant are likely to remain under pressure in 2023 as the housing market will remain sluggish.  

That being said, when the housing market does pick up, you’re not going to be able to buy the LOW stock at under $200 a share. If you want to wait to see if the stock will drop to an even more attractive price point, I wouldn’t blame you. But timing the market is always tricky. So it’s a good idea to take a small position now and average cost down if the price does drop. 

By taking that strategy, you can take advantage of the company’s dividend. Lowe’s is a Dividend King which means the company has increased its dividend for at least 50 consecutive years. While the yield of 2.18% isn’t particularly impressive, investors do get a $4.20 per share annual payout which makes the stock a safe place to ride out the current market.  

Advance Auto Parts (AAP) 

There was a notable item in the last reading of the Consumer Price Index (CPI) that should be bullish for Advance Auto Parts (NYSE:AAP). Specifically, the price of used cars went up. This was a reversal of a downward trend that started in the fall of 2022.  

That makes it likely that more investors may hold off on making that car purchase and instead apply some of their tax refunds to keeping their existing car in working order. That would certainly justify buying AAP stock which has tumbled over 40% in the past 12 months. 

But even if revenue and earnings don’t significantly improve from 2022 levels, the stock looks undervalued and oversold. At around 14x earnings, AAP stock is trading at a discount. Buying the stock now gets you an attractive dividend with a yield of over 5%. The payout ratio is over 70% which means there is some concern that the dividend may get cut a little. But with the growth of over 192% in the last three years, investors are still likely to get a nice payout.  

United Rentals (URI) 

Talk about the debt ceiling and curbing government spending dominating the headlines, and with good reason. The federal budget is a mess. But even if the government commits to no new spending in 2023, there are still federal dollars flowing into the economy. That’s because of the Infrastructure Act and Inflation Reduction Act that passed through the last Congress.  

And all that spending is bullish for United Rentals (NYSE:URI) as businesses look to get shovels in the ground. URI stock is up 67% from its 52-week low. But it’s also down 19% from its 52-week high set in early March after a downgrade by an analyst at Baird. The argument is that tighter bank lending will constrict spending on capital projects in the private sector. 

That may be true. But with revenue expected to grow in 2023, it’s a good idea to keep your eye on a stock that is trading at just 12x earnings. And the company recently initiated a dividend which may also help lift the spirit – and total return – of investors.  

Halliburton (HAL) 

Heading into 2023, the bears had the upper hand on oil stocks like Halliburton (NYSE:HAL). Oil prices were dropping as it appeared that the Federal Reserve’s campaign of raising interest rates was having the expected effect of lowering demand.  

But the reopening of China and the refilling of the Strategic Petroleum Reserve will likely put a firm floor on oil prices that has some analysts saying that $70 is the new $50. If that’s the case, then Halliburton is well positioned to become one of the bargain growth stocks. HAL stock is down 27% since mid-January. At that time, the stock was bumping up against its 52-week high.  

With catalysts in place, it would not be hard to see the stock moving past its 52-week high. It’s already up 8% in the last week of March. And if oil climbs to over $90 as some analysts believe can happen, now is the time to get in on a stock that is trading at around 17x earnings.  

Organon & Co. (OGN) 

There are times when low-priced growth stocks are not bargains. And at first glance, that may seem to be the case with Organon & Co. (NYSE:OGN). The healthcare company’s stock is currently trading at around 6.4x earnings and earnings are expected to decline in the next year.  

However, the consensus price target of analysts suggests the stock could have an upside of over 45%. And the stock received a bullish upgrade from Raymond James in March. One catalyst is coming from Organon’s biosimilar division which is launching a biosimilar drug that will compete with Humira from AbbVie (NYSE:ABBV).  

The stock may also get a boost from its Women’s Health division. Merck & Co. (NYSE:MRK) spinoff is launching its “Her Plan is Her Power” initiative to reduce unplanned pregnancies. And Bloomberg recently reported that the company is seeing an increase in demand for birth control in states where abortion is restricted. 

Hudbay Minerals (HBM) 

Hudbay Minerals (NYSE:HBM) is the last of the bargain growth stocks on this list. And it carries the most risk. However, if you’re going to be investing in a small-cap stock, particularly a mining stock, HBM stock may be a savvy choice. Mining stocks are always a risk, but a small-cap play like Hudbay comes with the opportunity for big rewards.  

The reason is the global demand for copper. In all of history, the world has mined 700 million tons of copper. But to reach the target of net zero carbon emissions by 2050, the world will have to mine 1.4 billion tons more. This is probably unrealistic. But it’s a good reason to invest in a mining stock that is expected to post earnings growth of over 39% on average over the next five years. 

According to the company’s website, Hudbay Minerals is “unique among our peers for our proven ability to discover, finance, build and operate low-cost, long-life, cash-generating assets. We have a robust portfolio of mines and projects focused on copper in mining-friendly, investment-grade jurisdictions.” 

Analysts give the stock a consensus Hold rating with a price target of $6.85 which is 31% above its current price.  

On the date of publication, Chris Markoch had a LONG position in LOW. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.