Best Undervalued Stocks To Buy Right Now (April 2025)

The following stocks are our Pro Picks for this month, taken from S&P 500-listed companies with a market capitalization of more than 15 billion USD, a solid Price-to-Earnings (P/E) Ratio between 1 and 20, and a fair value upside greater than 25%, meaning that the stock is either undervalued, or a bargain (based on 5 overlaid investing models and analyst assessments).

All of these companies have also earned InvestingPro health scores of ‘Good’, ‘Great’, or ‘Excellent’, which for the last 7 years has indicated outperformance vs. the S&P 500. A score this high points to a mix of first-rate financials: excellent earnings, cash flow, and growth vs. peers in its sector.

• Market Cap ($ Billion): 1,802.6
• Fair Value: $172.43
• Fair Value Upside: 17.5%

Alphabet Inc is a holding company created in October 2015 to restructure Google by moving subsidiaries from Google to Alphabet, thereby narrowing the search engine’s scope. Google has been referred to as the ‘most powerful company in the world’, thanks to its dominant position in the market data collection, and technological advantages in AI. That’s just one of Alphabet’s many widely used products, which also includes the email service ‘Gmail’, and the video site ‘YouTube’.

• Market Cap ($ Billion): 446.7
• Fair Value: $124.24
• Fair Value Upside: 20.7%

ExxonMobil Corporation is an American multinational oil and gas corporation, the largest oil and gas company based in the US and the country’s third largest company by revenue among all industries. It is also the largest investor-owned oil company in the world.

• Market Cap ($ Billion): 246.7
• Fair Value: $199.94
• Fair Value Upside: 42.7%

Chevron Corporation, formerly known as ChevronTexaco Corporation, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment engages in the exploration, development, production, and transportation of crude oil and natural gas, while the Downstream segment refines crude oil into petroleum products. The company was founded in 1879 and is headquartered in Houston, Texas.

• Market Cap ($ Billion): 241
• Fair Value: $154.78
• Fair Value Upside: 46%

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People’s Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others.

• Market Cap ($ Billion): 205.1
• Fair Value: $110.11
• Fair Value Upside: 35.6%

Merck & Company Inc is a global health care company that delivers innovative health solutions through medicines, vaccines, biologic therapies and animal health products. Founded in January 1891 as a subsidiary of Merck Group, Merck & Company is headquartered in Rahway, New Jersey, and is one of the largest pharmaceutical companies in the world, generally ranking in the global top five by revenue.

• Market Cap ($ Billion): 164.3
• Fair Value: $280.72
• Fair Value Upside: 19.8%

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. The company’s products and services include credit card, charge card, banking, and other payment and financing products. American Express Company was founded in 1850 and is based in New York, New York.

• Market Cap ($ Billion): 149.6
• Fair Value: $304.36
• Fair Value Upside: 19.2%

The Progressive Corporation operates as an insurance company in the United States.  The company writes insurance for personal autos and special lines products, including motorcycles, RVs, and watercraft; and personal residential property insurance for homeowners and renters. It sells its products through independent insurance agencies, as well as online and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield Village, Ohio.

We’ve only listed a handful of companies that we found using the InvestingPro Advanced Screener. To compare the rest of the list, simply follow these steps:

1. Visit the InvestingPro Stock Screener tool
2. Select the following filters

3. For U.S.-centric stocks, select ‘United States’ under the ‘Trading Region’ tab drop-down, and make sure to check (select) the ‘Primary Trading Item’ option.

4. You’ll then see the list of all the companies falling in the desired screener filters’ range, arranged in a descending order.

An undervalued stock is one that is trading at a price lower than its intrinsic value, which is determined by analyzing its fundamentals such as earnings, dividends, growth potential, and financial health. Investors believe these stocks are mispriced by the market, presenting opportunities for profit when the true value is realized.

Identifying undervalued stocks involves fundamental analysis, which includes examining financial statements, valuation metrics (like P/E and P/B ratios), dividend yields, and the company’s growth potential. Comparative analysis with industry peers and discounted cash flow (DCF) analysis are also useful techniques.

Stocks can become undervalued due to various factors including negative market sentiment, lack of information or misunderstandings about the company, temporary issues affecting the company, or broader economic cycles and downturns impacting the sector.

Investing in undervalued stocks can be profitable, but it carries risks. The stock may be undervalued for a good reason, such as declining business prospects or industry challenges. It’s important to conduct thorough research and consider the company’s long-term potential before investing.

An undervalued stock has the potential to appreciate in value as the market corrects its pricing error. A value trap, on the other hand, appears cheap but continues to underperform due to fundamental problems in the business that prevent price appreciation.

Yes, undervalued stocks can offer attractive dividend yields. High dividend yields may indicate undervaluation, especially if the company has strong financial health and a sustainable dividend payout ratio. However, high yields can also signal potential trouble, so it’s important to analyze the company’s ability to maintain dividends.

The holding period for an undervalued stock depends on individual investment goals and the specific stock. Some undervalued stocks may realize their true value quickly, while others might take longer. Patience is often required, and it’s important to periodically reassess the stock’s fundamentals and market conditions.

Undervalued stocks can be found in any industry, but they are often more common in sectors experiencing temporary difficulties, economic downturns, or undergoing significant change. Cyclical industries like energy, materials, and financials may present more opportunities for finding undervalued stocks.