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Today's Bonus Content 3 Undervalued Names Too Cheap to IgnoreBy Nathan Reiff. Publication Date: 3/7/2026. 
Key Points - Several established companies present potential value plays in early 2026 thanks to comparably low P/E ratios and strong fundamentals, despite broader market challenges.
- Merck's recent rally has not compromised its P/E ratio, which remains below the industry average, as the company navigates new ways to grow revenue amid its flagship Keytruda nearing patent expiration.
- Campbell's and US Foods offer contrasting cases: the former experiencing a sharp pullback and a high dividend yield, while the latter rallying amid adjusted EBITDA gains and the potential for further improvement.
- Special Report: Elon Musk's $1 Quadrillion AI IPO
Highly publicized growth trajectories of some of the biggest companies out there may make 2026 seem like a poor time for a value strategy. Still, several sizable firms are trading at attractive valuations and offer potential for share-price appreciation alongside fundamental growth. The companies below represent potential value plays, with value metrics that are historically low or competitive relative to peers or the broader market. They also offer added benefits, including compelling dividends or promising product developments. While value opportunities can be harder to find when many growth stories have recaptured investor attention—and some apparent value names suffer from deteriorating operations or other red flags—well-established, stable names can still merit consideration. Even After Rally, Merck May Be Undervalued, With Careful Planning for Keytruda in the Works Although shares have climbed more than 28% over the past year—bringing its market capitalization to nearly $300 billion—biopharma giant Merck & Co. Inc. (NYSE: MRK) still trades at a price-to-earnings (P/E) ratio of 16.45, well below the healthcare industry average of roughly 27. Analysts expect continued growth: the company is projected to see earnings rise by nearly 10% in the coming year and has about 5% upside in the near term. Driving Merck's momentum is its pembrolizumab cancer drug, Keytruda, which received European Commission approval for subcutaneous injection in late 2025 and posted roughly $8.4 billion in sales in Q4 2025, an increase of nearly 7% year over year (YOY). Keytruda also shows promise in ovarian cancer trials, potentially expanding the drug's addressable patient population. These factors should help Merck build revenue as it prepares for Keytruda's patent expiration in 2028. Merck's portfolio is broadening: the company recently announced notable phase 3 results for clesrovimab-cfor (Enflonsia), an RSV treatment for young children. At the same time, Merck is repositioning its business ahead of Keytruda's patent loss—splitting its human health operations into two units to more easily expand non–cancer-drug sales. A Difficult External Situation Pressures Campbell's, But Strong Dividend and Value Remain Factors Campbell's (NASDAQ: CPB) shares have fallen about 37% over the last year as the food-and-beverage staple has faced pressure from tariffs and inflation. In Q1 fiscal 2026, which ended Nov. 2, 2025, the company saw modest YOY declines in organic net sales and consumption, with adjusted earnings per share (EPS) down 13% for the period. Moreover, the company has not yet realized meaningful margin improvement following cost-saving measures. The near term will likely remain challenging for the iconic food brand, as fiscal-year guidance is weak overall. Still, improving supply-chain dynamics and strong brand loyalty—especially for its premium offerings—should help protect the company. Shifts in tariff policy could also ease some of the external pressure. Campbell's remains an attractive dividend play, offering a yield of 5.9%, although its payout ratio is relatively high at over 80%. Its P/E ratio of 13.5 is the lowest in about four years, which may convince some investors the stock is worth the risk despite Wall Street caution. A Recent US Foods Rally May Continue as Bottom-Line Growth Persists Foodservice distribution leader US Foods (NYSE: USFD) has seen a nearly opposite trajectory to Campbell's—shares climbed about 33% over the last year. Its P/E ratio currently sits at 31.6. On the fundamentals, US Foods is making meaningful progress: the company reported improving profitability in the latest quarter and full-year adjusted EBITDA gains of 11% YOY. Better inventory management and reductions in cost of goods sold are helping the firm gain traction. With a $4 billion capital deployment plan in place, US Foods is well positioned to sustain revenue momentum and continue improving adjusted EBITDA. Analysts rate USFD shares as a Moderate Buy (11 Buys, 2 Holds), implying roughly 15% upside potential. | 
