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Top 4 Most Undervalued Stocks in the S&P 500: May 2026
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Top 4 Most Undervalued Stocks in the S&P 500: May 2026
Spotting undervalued stocks is easy in hindsight, but the hard part is finding them in real time — and before the rest of the market does.
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8 years of experience Expertise Retirement credit wellnessElizabeth Ayoola is a Lead Multimedia Producer and Co-Host of the "Smart Money" podcast. Before delving into the podcast world, Elizabeth acquired over ten years of experience as a writer, and seven were spent covering personal finance topics. Her journey to finance writing started with a goal to learn as much as she could about how to attain financial freedom and share information with others about how to do it, too. This led her to Debt.com, where she covered topics relating to mortgages, debt and credit. Her articles have appeared on platforms like Washington Post, The Associated Press, The Washington Post, Yahoo, Essence, The Knot, PopSugar and Parents.com. Elizabeth has also done extensive spokesperson work and appeared on multiple renowned national networks like Good Morning America, ABC, NBC, and Fox to discuss money.
Elizabeth Ayoola is a Lead Multimedia Producer and Co-Host of the "Smart Money" podcast. Before delving into the podcast world, Elizabeth acquired over ten years of experience as a writer, and seven were spent covering personal finance topics. Her journey to finance writing started with a goal to learn as much as she could about how to attain financial freedom and share information with others about how to do it, too. This led her to Debt.com, where she covered topics relating to mortgages, debt and credit. Her articles have appeared on platforms like Washington Post, The Associated Press, The Washington Post, Yahoo, Essence, The Knot, PopSugar and Parents.com. Elizabeth has also done extensive spokesperson work and appeared on multiple renowned national networks like Good Morning America, ABC, NBC, and Fox to discuss money. Published in Writer + more + more
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9 years of experience Expertise Stocks ETFs economic newsSam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York.
Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York. Published in Lead Writer + more + moreA quick primer on undervalued stocks
A quick primer on undervalued stocks A quick primer on undervalued stocksUndervalued stocks are stocks that trade below their assumed value. They often have a track record of profitability and the potential for long-term growth, but investors in the stock market haven’t recognized that yet.
Undervalued stocks are stocks that trade below their assumed value. They often have a track record of profitability and the potential for long-term growth, but investors in the stock market haven’t recognized that yet.Sometimes, individual stocks are undervalued because they’re pulled down by their sector or the overall market, despite having strong balance sheets, good profitability and a strong future outlook.
Sometimes, individual stocks are undervalued because they’re pulled down by their sector or the overall market, despite having strong balance sheets, good profitability and a strong future outlook.However, there may be a hidden reason the stock is trading below its value, like unexpected changes in the company structure or issues with financial management.
However, there may be a hidden reason the stock is trading below its value, like unexpected changes in the company structure or issues with financial management.The most undervalued stocks in the S&P 500
The most undervalued stocks in the S&P 500Below is a table of four of the most undervalued dividend-paying stocks in the S&P 500, ranked from lowest to highest trailing P/E ratio. We've also included their dividend yields. These stocks also have price-to-book-value ratios and debt-to-equity ratios under 100%. We explain the importance of all of these metrics below.
Below is a table of four of the most undervalued dividend-paying stocks in the S&P 500, ranked from lowest to highest trailing P/E ratio. We've also included their dividend yields. These stocks also have price-to-book-value ratios and debt-to-equity ratios under 100%. We explain the importance of all of these metrics below.Company name & symbol
Company name & symbol
Company name & symbol Company name & symbolPE ratio
PE ratio
PE ratio PE ratioDividend yield
Dividend yield
Dividend yield Dividend yieldEverest Group (EG)
Everest Group (EG)9.02
9.022.46%
2.46%Global Payments (GPN)
Global Payments (GPN)11.88
11.881.68%
1.68%Lennar Corp. (LEN)
Lennar Corp. (LEN)12.77
12.772.25%
2.25%Mosaic Co. (MOS)
Mosaic Co. (MOS)14.19
14.193.68%
3.68%Source: Finviz. Stock data is current as of April 14, 2026, and is intended for informational purposes only.
Source: Finviz. Stock data is current as of April 14, 2026, and is intended for informational purposes only. Source: Finviz. Stock data is current as of April 14, 2026, and is intended for informational purposes only.» Want to add these to your portfolio? See our picks for the best brokers for stock trading
» Want to add these to your portfolio? » Want to add these to your portfolio? See our picks for the best brokers for stock tradingHow to find undervalued stocks
How to find undervalued stocksIf you’re looking for undervalued stocks, there are strategies you can use. A general principle is to ensure individual stocks don’t make up more than 10% of your portfolio. You can fill in the rest of your portfolio with stock-based funds such as index funds.
If you’re looking for undervalued stocks, there are strategies you can use. A general principle is to ensure individual stocks don’t make up more than 10% of your portfolio. You can fill in the rest of your portfolio with stock-based funds such as index funds.One tool that comes in handy for finding undervalued stocks is a stock screener. A stock screener is a tool that makes it easier to sort through stocks using specific search criteria. They're available at brokerages such as Fidelity and on platforms like Morningstar and Yahoo Finance. (Take a look at our list of free stock screeners.)
One tool that comes in handy for finding undervalued stocks is a stock screener. A stock screener is a tool that makes it easier to sort through stocks using specific search criteria. They're available at brokerages such as Fidelity and on platforms like Morningstar and Yahoo Finance. (Take a look at our list of free stock screeners .)Here are some signs of undervaluation to look for with a screener.
Here are some signs of undervaluation to look for with a screener. Here are some signs of undervaluation to look for with a screener.1. Screen for low price ratios like price-to-earnings and price-to-book
1. Screen for low price ratios like price-to-earnings and price-to-bookOne way to find undervalued stocks is by looking for companies with low valuation ratios, which indicate that their share prices are low relative to measures of their actual profitability and economic value.
One way to find undervalued stocks is by looking for companies with low valuation ratios, which indicate that their share prices are low relative to measures of their actual profitability and economic value.One of the best-known valuation ratios is the price-to-earnings ratio, also known as P/E ratio. The P/E ratio is calculated by dividing the company’s stock price by its annual earnings per share. What is a good P/E ratio? That varies by industry, but under 20 is a good rule of thumb; that's the cutoff we used for the table above. More broadly, if you find that a company’s stock has a lower P/E ratio than most of its competitors, there’s a chance you could be getting valuable stock at a discount.
One of the best-known valuation ratios is the price-to-earnings ratio, also known as P/E ratio. The P/E ratio is calculated by dividing the company’s stock price by its annual earnings per share. What is a good P/E ratio? That varies by industry, but under 20 is a good rule of thumb; that's the cutoff we used for the table above. More broadly, if you find that a company’s stock has a lower P/E ratio than most of its competitors, there’s a chance you could be getting valuable stock at a discount.Another useful valuation ratio is the price-to-book ratio, or P/B ratio. This equals the company's stock price divided by its book value per share. Book value is the amount of money a company would fetch if it were shut down and sold for parts. It's equal to the company's total assets (e.g., its inventory, real estate holdings and intellectual property) divided by its liabilities (e.g., its debts, unpaid operating costs and payroll expenses). Generally, companies with a P/B ratio below 1 are considered undervalued, but again, this varies by industry, and it's good to compare a company's P/B ratio with its competitors'.
Another useful valuation ratio is the price-to-book ratio, or P/B ratio. This equals the company's stock price divided by its book value per share. Book value is the amount of money a company would fetch if it were shut down and sold for parts. It's equal to the company's total assets (e.g., its inventory, real estate holdings and intellectual property) divided by its liabilities (e.g., its debts, unpaid operating costs and payroll expenses). Generally, companies with a P/B ratio below 1 are considered undervalued, but again, this varies by industry, and it's good to compare a company's P/B ratio with its competitors'.» Dive deeper: How price-to-earnings ratios work
» Dive deeper: » Dive deeper: How price-to-earnings ratios work2. Keep an eye on the debt-to-equity ratio
2. Keep an eye on the debt-to-equity ratioValuation ratios are useful, but they don't always tell you the full story — sometimes, there's a reason why a company trades at a low P/E or P/B ratio. One thing to watch out for is a high debt burden, which may not show up in these metrics.
Valuation ratios are useful, but they don't always tell you the full story — sometimes, there's a reason why a company trades at a low P/E or P/B ratio. One thing to watch out for is a high debt burden, which may not show up in these metrics.Fortunately, many stock screeners also allow you to look at a stock's debt-to-equity ratio, which measures a company's total debt divided by its total shareholders' equity. (Total shareholders' equity is the same thing as total book value. The former is an investing term, and the latter is an accounting term, but they're the same number.) A good rule of thumb is to look for companies with a debt-to-equity ratio below 100%.
Fortunately, many stock screeners also allow you to look at a stock's debt-to-equity ratio, which measures a company's total debt divided by its total shareholders' equity. (Total shareholders' equity is the same thing as total book value. The former is an investing term, and the latter is an accounting term, but they're the same number.) A good rule of thumb is to look for companies with a debt-to-equity ratio below 100%.3. Look for dividends
3. Look for dividendsDividends are a portion of a company's earnings (profits) paid out to shareholders, so they are generally a sign of profitability. A company's dividend yield is equal to its annual dividends per share divided by its share price, so a high dividend yield is sometimes a signal that investors are undervaluing that company relative to its profitability.
Dividends are a portion of a company's earnings (profits) paid out to shareholders, so they are generally a sign of profitability. A company's dividend yield is equal to its annual dividends per share divided by its share price, so a high dividend yield is sometimes a signal that investors are undervaluing that company relative to its profitability.However, dividend yield isn't a foolproof metric — sometimes, a company has a high dividend yield (in other words, a low price relative to its dividend) because investors think something bad is about to happen that may force the company to cut its dividend, such as a downturn in revenue or earnings. Thus, dividend yield is best considered alongside other valuation metrics, such as those described above.
However, dividend yield isn't a foolproof metric — sometimes, a company has a high dividend yield (in other words, a low price relative to its dividend) because investors think something bad is about to happen that may force the company to cut its dividend, such as a downturn in revenue or earnings. Thus, dividend yield is best considered alongside other valuation metrics, such as those described above. » » Learn more about dividends4. Target undervalued sectors
4. Target undervalued sectorsYou could also consider specific market sectors when hunting for undervalued stocks. For example, if tech stocks are on the decline, you could look for companies that have declined along with the rest of the sector, but still show potential for strong growth over the long term.
You could also consider specific market sectors when hunting for undervalued stocks. For example, if tech stocks are on the decline, you could look for companies that have declined along with the rest of the sector, but still show potential for strong growth over the long term.Brokerage firms
Brokerage firms
Brokerage firmson Charles Schwab's website
on E*TRADE's website
on Vanguard's website
on Fidelity's website
When undervalued stocks become popular
When undervalued stocks become popularUndervalued stocks can become more attractive to some investors in times of stock market volatility. Companies whose stock is undervalued may have strong cash flows and balance sheets. So even if prices dip, investors buy because they’re getting what they believe is valuable stock for less before prices shoot up.
Undervalued stocks can become more attractive to some investors in times of stock market volatility. Companies whose stock is undervalued may have strong cash flows and balance sheets. So even if prices dip, investors buy because they’re getting what they believe is valuable stock for less before prices shoot up.Undervalued stocks can also become popular when a promising company experiences exponential growth but also shows volatility or price dips. Tesla is one example of this.
Undervalued stocks can also become popular when a promising company experiences exponential growth but also shows volatility or price dips. Tesla is one example of this.Tesla pioneered an industry for electric vehicles, an emerging technology with growth potential at the time. Tesla made its initial public offering in June 2010 at $17 per share. Nine months later, its shares were sold at about $4 a share. At that point, the stock could've been considered undervalued and could've been more attractive to investors who saw the company's potential. Of course, when you're looking back in time, it's very easy to pick out previously undervalued stocks. What's difficult is picking out undervalued stocks before they become highly valued, like Tesla is now.
Tesla pioneered an industry for electric vehicles, an emerging technology with growth potential at the time. Tesla made its initial public offering in June 2010 at $17 per share. Nine months later, its shares were sold at about $4 a share. At that point, the stock could've been considered undervalued and could've been more attractive to investors who saw the company's potential. Of course, when you're looking back in time, it's very easy to pick out previously undervalued stocks. What's difficult is picking out undervalued stocks before they become highly valued, like Tesla is now.All investing comes with risks, and undervalued stocks carry risk, too. You could invest in something like Tesla and make massive gains … or not. Some companies with undervalued stock don’t succeed, and sometimes investments further depreciate or take longer to decline in value. If you’re not quite sure about a stock, consider talking to a financial advisor.
All investing comes with risks, and undervalued stocks carry risk, too. You could invest in something like Tesla and make massive gains … or not. Some companies with undervalued stock don’t succeed, and sometimes investments further depreciate or take longer to decline in value. If you’re not quite sure about a stock, consider talking to a financial advisor .Next steps
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Explore Explore recession-proof stocks About the authors Elizabeth Ayoola Elizabeth Ayoola Elizabeth Ayoola is a Lead Multimedia Producer and Co-Host of the Smart Money Podcast. Her work has been featured in The Associated Press, The Washington Post, MSN, Debt.com, ESSENCE, The Knot, and POPSUGAR. See full bio. Sam Taube Sam Taube Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree in 2016. See full bio.On this page
The most undervalued stocks in the S&P 500 The most undervalued stocks in the S&P 500 How to find undervalued stocks How to find undervalued stocks When undervalued stocks become popular When undervalued stocks become popular Next steps Next stepsOn this page
The most undervalued stocks in the S&P 500 The most undervalued stocks in the S&P 500 How to find undervalued stocks How to find undervalued stocks When undervalued stocks become popular When undervalued stocks become popular Next steps Next steps More like this Investment Basics Investing Stocks Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana The Best-Performing Stocks in 2026 (By One-Year Returns) These are the best 21 stocks in the S&P 500 right now, based on 1-year performance. 2 By Arielle O'Shea, Chris Davis Investing in Dividend Stocks: Guide, Calculator and Top 7 Yields for April 2026 Dividend stocks can be a great choice for investors looking for passive income and portfolio stability. Here's what to look for when evaluating dividend stocks and how to invest in them. 2 By Chris Davis, Sam Taube What Is a Brokerage Account? Where and How to Open One Opening a brokerage account is the first step to investing. You can open one in as little as 15 minutes, but you'll need to fund it and select investments to start building out your portfolio. 2 By Arielle O'Shea, Pamela de la Fuente Best Brokerage Accounts for Online Investing and Stock Trading in 2026 Based on hours of analysis and hands-on testing, here are our picks for the best brokerage accounts based on their low fees, strong platforms, quality customer support and other factors. Chris Davis Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana The Best-Performing Stocks in 2026 (By One-Year Returns) These are the best 21 stocks in the S&P 500 right now, based on 1-year performance. 2 By Arielle O'Shea, Chris Davis Investing in Dividend Stocks: Guide, Calculator and Top 7 Yields for April 2026 Dividend stocks can be a great choice for investors looking for passive income and portfolio stability. Here's what to look for when evaluating dividend stocks and how to invest in them. 2 By Chris Davis, Sam Taube What Is a Brokerage Account? Where and How to Open One Opening a brokerage account is the first step to investing. You can open one in as little as 15 minutes, but you'll need to fund it and select investments to start building out your portfolio. 2 By Arielle O'Shea, Pamela de la Fuente Best Brokerage Accounts for Online Investing and Stock Trading in 2026 Based on hours of analysis and hands-on testing, here are our picks for the best brokerage accounts based on their low fees, strong platforms, quality customer support and other factors. Chris Davis Investment Calculator Use our free investment return calculator to estimate how your money can grow. Enter your planned contributions, timeline, rate of return and compounding frequency to get started. Chris Davis Best Investments: Where to Invest in 2026 Wondering where to invest your money this year? High-yield savings accounts, CDs, bonds, funds and stocks are all considered among the best investments available. Learn more about the risks, potential returns and how to get started. 2 By Chris Davis, Alieza Durana The Best-Performing Stocks in 2026 (By One-Year Returns) These are the best 21 stocks in the S&P 500 right now, based on 1-year performance. 2 By Arielle O'Shea, Chris Davis Investing in Dividend Stocks: Guide, Calculator and Top 7 Yields for April 2026 Dividend stocks can be a great choice for investors looking for passive income and portfolio stability. Here's what to look for when evaluating dividend stocks and how to invest in them. 2 By Chris Davis, Sam Taube