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This Month's Bonus Article 3 Undervalued Names Too Cheap to IgnoreReported by Nathan Reiff. Article Published: 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.
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Highly publicized growth trajectories of some of the biggest companies out there may make it seem like 2026 is not a prime 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, based on historically low or competitive value metrics relative to peers or the broader market. They also offer added benefits, such as compelling dividends or promising product developments. While value opportunities can be harder to find when many companies have regained investor attention — and some apparent bargains carry operational red flags — well-established, stable names can still present worthwhile value prospects. Even After Rally, Merck May Be Undervalued, With Careful Planning for Keytruda in the Works Although shares have climbed more than 28% over the last 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 medical-industry average of about 27. Analysts project earnings to rise nearly 10% in the coming year and see roughly 5% additional near-term upside. Driving Merck's momentum is its pembrolizumab cancer drug, Keytruda, which received European Commission approval for subcutaneous injection in late 2025 and generated about $8.4 billion in sales in Q4 2025 — nearly a 7% year-over-year increase. Keytruda also shows promise in ovarian cancer, potentially attracting a new group of patients. These developments should help Merck build revenue as it prepares for Keytruda's patent expiration in 2028. Merck's portfolio is broadening — the company recently announced phase 3 results for clesrovimab-cfor (Enflonsia), a treatment for RSV in young children. At the same time, Merck is reorganizing its human health business into two units to more easily expand non–cancer-drug sales as Keytruda's exclusivity approaches its end. 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 faced headwinds from tariffs and inflation. In Q1 fiscal 2026, which ended Nov. 2, 2025, the company posted modest year-over-year declines in organic net sales and consumption, and adjusted earnings per share fell 13%. The company has yet to see notable margin improvement after initiating cost-saving measures. The near term is likely to remain challenging given weak fiscal-year guidance. However, an improving supply chain and strong brand loyalty — particularly for premium offerings — should help protect sales, and shifts in tariff dynamics may ease some pressure. Additionally, Campbell's remains a compelling dividend play, yielding about 5.9%, though its payout ratio is relatively high at over 80%. Its P/E ratio of 13.5 is the lowest in roughly 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 Remains in Place Foodservice distribution leader US Foods (NYSE: USFD) followed nearly the opposite trajectory of Campbell's — shares have climbed about 33% over the last year. Still, its P/E ratio, at 31.6, is modest relative to many high-growth peers. Fundamentally, US Foods is making meaningful progress: the company reported improving profitability in the latest quarter and full-year adjusted EBITDA gains of 11% year over year. Better inventory management and cost-of-goods savings are helping the firm gain traction. With a $4 billion capital deployment plan, US Foods is well positioned to maintain revenue momentum and continue growing adjusted EBITDA. Analysts rate USFD a Moderate Buy based on 11 Buys and 2 Holds, with roughly 15% upside potential. | 
