To The Moon

Three months into 2022, the markets are in turmoil, and highly-priced stocks are falling fast. Investors can look for safety in value-oriented investments that are less vulnerable to sharp declines. The businesses listed here are all profitable and trading at incredibly cheap future earnings multiples.

Among the best value buys out there today are Organon, Citigroup, and FedEx. Collectively, they can add some stability and diversification to your portfolio.

1. Organon

Organon was spun off from Merck last year, and its operations are focused on women's health, established medicines, and biosimilars. Although this isn't much for a growth stock right now, Organon could make for a stable buy over the long term. The business generates solid gross margins (north of 60%) and has been consistently profitable.

Last month, it reported sales of $1.6 billion for the quarter ended Dec. 31, down 1% against the prior-year period. However, it did report 6% growth in its women's health division. Unfortunately, established brands, which is its largest segment, declined by 2% due to competition and losses in exclusivity.

The company is investing in its growth, announcing in December the completed acquisition of Forendo Pharma, a clinical-stage company that is developing treatments for endometriosis (a condition that affects up to 170 million women) and polycystic ovarian syndrome.

Although the recent results are lackluster, there's potential for Organon. And the shares are heavily discounted, giving investors a bit of an extra incentive to take a chance on this relatively new stock. Trading at a forward price-to-earnings (P/E) multiple of 6.4, this is incredibly cheap; Merck, which is already a fairly inexpensive stock, is trading at just 11 times its future earnings. Plus, Organon pays an above-average dividend yield of 3.2%, which is more than double the S&P 500 average's yield of 1.3%.

Investors are starting to see the value of this fairly stable business. So far in 2022, the shares are up 15%, which is better than the S&P 500's losses of 4% over the same period. Although there's some risk with Organon since its operations aren't showing much growth, given the discounted earnings multiple and strong margins and fundamentals, it could make for an underrated buy right now.

2.Citigroup

Bank stocks can offer investors some good value, and Citigroup is no exception. And now that interest rates are on the rise, there could be some extra motivation for investors to add a top bank stock to their portfolios. With higher interest rates, there's more of an opportunity for banks to profit on the difference between the rate they pay depositors and what they charge on loans.

Last year, Citigroup's profits doubled -- at least in part, because it was able to free up provisions for credit losses amid a stronger economic outlook. However, the company's loan-interest revenue fell 12% to $35.4 million. And 2020's figure was already down 16% from the year earlier.

A strong economy this year combined with higher interest rates could lead to a resurgence in loan interest revenue for Citigroup, resulting in a strong performance for the business in 2022. But even if that doesn't happen and inflation and geopolitical issues derail the economy, it's generally a safe long-term bet to expect the economy to do well.

And that's why buying this bank stock right now could be an advantageous move for investors. Year to date, it is down 7% and its forward P/E is right around 8, while rival banks JPMorgan Chase and Bank of America trade at multiples of around 13. Citigroup is also the only one of the three that trades below its book value -- a dirt-cheap ratio of just 0.6. Throw in its high-yielding dividend that pays 3.7%, and this looks like a value investor's dream.

3. FedEx

A positive, long-term outlook for the economy is also a reason FedEx might be worth buying on the dip. Down 11% in 2022, it has been declining amid geopolitical issues. And it's probable that the company will have some challenging quarters ahead due to a slowdown in online shopping.

Consumers are likely to make more in-store purchases as the economy returns to normal. Many of the top e-commerce stocks are already struggling this year in anticipation of that, with Shopify down around 50% year to date and eBay falling by 12%. The mighty Amazon remains resilient with gains of just over 1%, but even that is a mortal return for the high-powered business.

However, FedEx still looks strong today. In its most recent quarterly results, for the period ended Feb. 28, its sales were up 10% to $23.6 billion, and net income totaled $1.1 billion, up 25% from the same period last year. FedEx says the results could have been even stronger if not for the emergence of omicron, which disrupted its operations.

With shares of the stock on the dip, now could be an excellent time to load up on the logistics company. Trading at just 11 times its future earnings, the stock looks like a bargain compared to rival United Parcel Service, where investors are paying a multiple of 17. Even though 2022 might be a challenging year for FedEx, the long-term trajectory remains promising, and that's why it's a great buy. It also pays a dividend yield of 1.3%.