Value stocks have been one of the best performers in the stock market in recent months as investors flock to low-priced stocks that offer opportunities to rise in the current turmoil on Wall Street.

As a result, we have adopted a systematic approach of screening a smaller watch list of more than 7500 stocks listed on US exchanges, including companies with attractive valuations and paying dividends.

We select stocks with a market capitalization of more than $5 billion, a price-to-earnings ratio of 0-20 times, a dividend yield of more than 2 per cent, and a gross margin and net profit growth of more than 20 per cent. In addition, according to InvestingPro's fair value valuation model, these stocks have at least 10 per cent room to rise from their target prices.

We looked at companies with a market capitalization of $5 billion or more, and then we scanned companies with gross profit margins and EBIDTA growth of more than 20 per cent. Companies that have risen at least 20 per cent in the fair value of InvestingPro and analysts' target share prices of more than 10 per cent are on our watch list.

Based on InvestingPro's valuation model, we will take a closer look at the three companies on this list that are most likely to offer the highest returns in the coming months.

1. ZIM integrated shipping service

Price-to-earnings ratio: 1.7
Dividend yield: 77.2%
Market capitalization: $7.4 billion
Upward space between stock price and fair value: + 48.3%

$Star Shipping (ZIM.US) $It's an international freight company. Operating 118 ships, including 110 container ships and 8 vehicle carriers, is one of the top 20 shipping companies in the world.

The Israel-based company listed on the New York Stock Exchange at $15 a share in January 2021 and has since benefited from soaring freight rates and a favourable demand environment created by global supply chain problems.

On Tuesday, ZIM shares closed at $61.86. The integrated shipping company has risen about 134% over the past 12 months and now has a market capitalization of $7.4 billion.

ZIM's InvestingPro health index is 5max 5, which is an attractive valuation, and ZIM is a reliable name worth having in the current inflationary environment.

According to InvestingPro, the shipping giant's Pmax E is 1.7 times lower than the industry's median of 11.0%. In addition, some of ZIM's profitability indicators lead the industry, with gross margins approaching 64 per cent and earnings before tax, interest, depreciation and amortisation (EBIDTA) growing by more than 700 per cent year-on-year.

In addition, through the InvestingPro data, we can see some additional advantages that the company currently has, such as strong earnings and cash flow growth, as well as low EBIDTA valuation multiples.

Taken together, ZIM is a noteworthy stock, and ZIM's share price is likely to rise about 48 per cent over the next 12 months, close to its fair value of $91.72, according to InvestingPro's valuation model.

In addition, Wall Street analysts are generally bullish on the global container liner company, commenting on the strong fundamentals of the shipping market. The average target price for equity analysts at ZIM is about $90, saying it will rise about 45 per cent over the next 12 months from its current level.

2. Macy's

Price / earnings ratio: 5.3
Dividend yield: 2.66%
Market capitalization: $7 billion
Upward space between stock price and fair value: + 54.3%

$Macy's (M.US) $One of the best performing companies in the retail industry over the past year, the department store giant has benefited from the gradual recovery of the economy in the post-epidemic era.

Macy's share price has risen about 56% in the past 12 months, and as COVID-19 's health crisis recedes, more and more consumers are flocking to the mall.

Macy's shares closed Tuesday at $24.69, giving it a market capitalization of about $7 billion. But Macy's shares are now about 35% below their most recent 52-week high of $37.95 in November 2021.

With a price-to-earnings ratio of 5.3 times earnings, an annualized dividend of $0.63 and a yield of 2.66%, Macy's seems to be a good value choice for investors who want to withstand further market volatility in the coming months. The company's gross profit margin is 40.9%. The EBITDA has increased by 1500%, and the future is bright.

InvestingPro also offers some key insights on the stock, among which share buybacks and dividend payments are the most prominent:

Then, InvestingPro also provides the company's financial health, which is divided into four parts:

According to InvestingPro's valuation model, Macy's share price will still have about 54 per cent room to rise from its current level over the next 12 months.

3. NRG Energy

Price / earnings ratio: 4.2
Dividend yield: 3.51%
Market capitalization: $9.1 billion
Upward space between stock price and fair value: + 64%

$NRG Energy (NRG.US) $Founded in 1989, it is one of the largest independent energy companies in the United States. The company has customers in 10 states across the Northeast and Midwest. NRG has renewable products that provide electricity, including solar and wind energy, as well as carbon management services.

The company's shares closed Tuesday at $37.62, down about 18% from their 52-week high of $46.10 in august 2021, with a market capitalization of $9.1 billion.

In the current environment, NRG is a cheaper company compared with the broader market because of its low valuation relative to other companies in the energy industry and efforts to return more capital to shareholders.

The company now trades at 4.2 times earnings, well below the industry median of 11.6 times and well below its peers' overall price-to-earnings ratio of 22.3 times.

As InvestingPro points out, NRG is in a very healthy financial position, thanks to strong profits and growth prospects, coupled with its attractive valuation.

The stock's high dividend and attractive yield make NRG more likely to be an outperforming stock in the coming months. The company recently raised its quarterly cash dividend by nearly 8% to $0.35 a share. That means an annualised dividend of $1.40 and a yield of 3.51 per cent, one of the highest in the industry.

Not surprisingly, according to InvestingPro's model, NRG's share price is currently undervalued at a fair value of $61.68 per share, meaning the stock still has 64 per cent room to rise over the next 12 months.