This is a strange time as an investor. On one hand, there is inflation and weak consumer spending and on the other, the earnings season and strong market movement. But the best way to take a position during this time is to invest in undervalued blue-chip stocks that look promising and have an impressive balance sheet. If you want to make the right investment decision, look at the bigger picture and you will be able to find financially strong companies with a solid history.
There are several undervalued blue-chip stocks worth investing in before they soar higher. They have strong investor confidence and have proven themselves time and again. Solidify your investment portfolio with these three undervalued blue-chip stocks to buy.
Undervalued blue-chip stocks: Visa (V)
If you are looking for undervalued blue-chip stocks to own, start with Visa (NYSE:V). One of my favorite fintech stocks, the company is making the most of digitization and is here to stay. It has a global presence and is a powerhouse that is ensuring the smooth transition from cash to digital payments. Visa could join the trillion-dollar club very soon and it has a lot working for it. The company saw an 11% rise in revenue in the past quarter and has impressed investors with strong financials.
In the second quarter, the company saw a revenue of $8.12 billion and a net income of $4.16 billion, up 22% year-over-year (YOY). Even the operating income hit $5.48 billion, up by 13%. Visa is firing on all cylinders and is set to report the third quarter results in a few hours. V stock is trading at $231 today and is up 11% year-to-date (YTD). It has generated over 68% returns in the past five years and is a little away from the 52-week high of $250.
If you look at the long-term picture, there is so much working in favor of Visa. Our economy will recover with time and consumer spending will improve, which will benefit the business. Even holiday spending will have a solid impact on the business. Visa is here to stay and the sooner you buy it, the higher your returns will be.
Furthermore, the rise of electronic payments will benefit the company in the long term and the business gets a percentage as a transaction fee. This means as consumer spending increases, Visa’s revenues rise. However, it is one company that continues to thrive no matter the market condition. This is due to its global presence across all the emerging markets.
There are many reasons to love PepsiCo (NASDAQ:PEP) and one of them is the diverse product range. It has a wide range of snacks, beverages, and nutrition products, which set it apart from its biggest competitor Coca-Cola (NYSE:KO). Pepsi is an iconic brand that has been thriving in testing times. The company’s products give it a cushion in tough times and since it has a global presence, a drop in sales in one geographical area will be compensated with strong sales in another region.
To keep up with the changing consumer demand, the company has introduced products that are tailored to health-conscious consumers which include zero-calorie and sugar-free products. In the third-quarter, the company beat estimates and also raised the outlook for the year.
It reported a revenue of $23.45 billion and an EPS of $2.25. It now expects an EPS growth of 13%, up from the previous forecast of 12%. This is also the third consecutive quarter that the company has raised its forecast and this speaks something for its business. PepsiCo gives an ideal balance between growth and passive income.
PEP stock is trading at $160 today and is down 10% year to date. The stock is much lower than the 52-week high of $196 and has gone from $185 to $160 in the past six months. That said, the company has a dividend yield of 3.16% and has recently announced a quarterly dividend of $1.26. Now is an ideal time to buy the stock while it is trading at a discount and it will continue to generate passive income for you over the years.
My favorite company and an unstoppable brand, Nike (NYSE:NKE) is worth adding to your portfolio. The company has a solid history and it has already dominated the global apparel and footwear market for years. It has become a household name and one cannot ignore its dominance.
The company sets itself apart with its strong marketing tactics which have helped it become a household name. It is a globally recognized brand and the management knows how to use this asset to reach out to consumers. It is known for unique ad campaigns and athlete endorsements.
The company recently reported the first quarter 2024 results and hit a revenue of $12.94 billion. EPS came in at 94 cents. This is the first time in two years that the company’s revenue fell short of expectations, but it did manage to beat the gross margin and earnings.
This drop could be due to high inflation and weak consumer spending, which is temporary. If you look at the bigger picture, this is one company that will continue to thrive in the footwear industry.
The sales were up 2% YOY and the company has maintained its full-year guidance of a gross margin expansion ranging from 1.4 percentage points to 1.6 percentage points. Exchanging hands at $102 today, the stock is down 13% YTD, and this dip is a good chance to make your move.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.