2 stocks to buy before March as earnings season creates volatility!

I am always looking for stocks to buy that will add to my portfolio. My focus is mostly on value and dividend stocks (which are probably the same thing).

Earnings season has caused some volatility in the market over the past few weeks. Obviously, there are other markets moving, including higher-than-expected US unemployment data and PPI.

But volatility leads to opportunity. That’s why I want to buy my favorite stocks and add news before the month is out.

So, here are the top stocks to buy before March.

Vodafone

I recently added it Vodafone (LSE:VOD) to my portfolio. This is not because of anything related to earnings, but because two telecom friends invested in the stock, reversing the general downward trend of the share price. e& (formerly Etisalat) increased its holdings in the company while the communications giant Liberty Global buy 4.9% of the shares.

e& and Liberty Global know their industry and I’m sure they recognize the attractive value when they see it. The company’s share price has fallen more than 30% in the year to January, but has since gained 10% in the month. Currently, it is trading with an attractive price-to-earnings ratio of 10, even if it does not take into account its considerable debt burden.

Investors are also hoping that Vodafone can generate further efficiencies, while extracting more value from its existing operations, particularly Africa-focused Vodacom.

I’m a little concerned that the dividend – currently at 7.4% – could be cut due to coverage of just 1.25 last year. Despite this, Vodafone still managed to cover the index’s performance, and that is why I recently added this stock to my portfolio.

NatWest

NatWest (LSE: NWG) shares slumped last week after the bank announced a 33.5% increase in profits and a £800m share buyback as it cashed in on surging interest rates.

The stock fell on worries about the health of the UK economy and suggestions from some analysts that corporate interest rates will not rise again from here. NatWest shares are currently down 8% for the week, despite rising 9% for the year.

However, I think the market overreacted to the results. In the midst of very tight inflation, I expect that these interest rates will continue for some time. It is also important to remember that banks have hedging strategies to smooth the impact of rate fluctuations.

Net interest margin (NIM) – the difference between lending and savings rates – rose 55 basis points to 2.85%. I expect higher NIMs in 2023, with no sign of central bank rate cuts in the first half of the year.

The bank, which is still 46% owned by taxpayers, currently trades with a price-to-earnings ratio of around 7.8. That’s about half of the index average. So, with this in mind, I want to increase my position in NatWest before the end of the month.