Value Picks

Here are some stock picks from Morningstar in an overvalued market. Would these be great buys in a correction or market dip? Let's take a look:

HCP Inc. (HCP) is a self-administered REIT that acquires, develops, leases, manages and sells healthcare real estate and provides financing to healthcare providers. HCP has a current dividend of 5%, which is great. HCP currently trades at 1.83 times its book value and about 28 times its free cash flow. One alarming figure is the $8 billion in long term debt, which is of course the financing used to acquire properties. Investors should wait to buy this stock, but it could be a bargain if a correction occurs.

Enterprise Products Partners LP (EPD) is an energy pipeline company that provides services to producers and consumers of natural gas, natural gas liquids, crude oil and certain petrochemicals. They pay a 3.5% dividend. EPD has little cash, a large amount of receivables, and high current liabilities and $17 billion in long-term debt. Priced at almost 5 times its book value, and almost 70 times its free cash flow, EPD is overvalued and probably won't be a bargain in a market correction.