The stock market is currently quite expensive. Even experienced investors like Warren Buffett and Jerome Powell, the head of the Federal Reserve, recognize this. It’s something most investors are aware of as well.
So, are there no good stocks available right now? Not at all! In fact, some stocks are currently very affordable. Here are three exceptionally cheap stocks to consider, even though the market seems fully valued.
1. Pfizer
Pfizer (PFE) currently trades at a low price relative to its future earnings – less than 8 times earnings. This is significantly lower than the average valuation for healthcare companies in the S&P 500, which trade at 17 times future earnings.
If a stock price drops significantly, it’s crucial to understand the reasons behind it. With Pfizer, several issues are contributing to this. A major concern is that key patents are about to expire, and investors are also worried about how the Trump administration’s trade policies might affect the pharmaceutical industry.
Good news! Pfizer recently reached an agreement with the White House that removes pharmaceutical tariffs for the next three years. This means they’ll be lowering prices on many of their drugs and increasing investment in U.S. manufacturing. Overall, the benefits of this deal – especially the stability it provides – are greater than any potential drawbacks.
From my perspective as a portfolio manager, the concerns around Pfizer’s patent cliff seem overblown. While patent expirations are always something to watch, Pfizer has a strong portfolio of newer drugs already gaining traction, which I expect will effectively balance out any revenue decline. Plus, their research pipeline looks very promising, offering potential for future growth drivers.
Pfizer currently appears to be a great choice for investors seeking regular income. The company’s dividend yield is over 6.3%, and its leadership has stated they plan to continue and even increase dividend payments in the future.
2. Prudential Financial
Prudential Financial (PRU) is currently a very affordable stock, even more so than Pfizer. It’s trading at a forward price-to-earnings ratio of around 7.5, which is less than half the average for financial companies in the S&P 500.
Prudential’s profits and revenue have decreased recently compared to last year, mainly due to fluctuations within its variable annuities business. However, Prudential has since stopped operating in that area.
Prudential appears to have a strong future, and investors generally agree. Its PEG ratio, which considers both price and projected growth, is a very low 0.58. This suggests analysts are optimistic about the company’s ability to grow over the next five years.
Prudential doesn’t need a big increase in its stock price to provide investors with strong overall returns. Currently, its dividend yield is 5.2%, which on its own could contribute significantly to double-digit returns.
3. Verizon Communications
I’ve been taking a closer look at Verizon (VZ) as a potential addition to my portfolio. What really caught my eye is its current valuation – it’s trading at around nine times forward earnings. That’s a pretty compelling price, especially when you compare it to its main competitors like AT&T (T) and T-Mobile US (TMUS), which are currently valued much higher. I see this as a potential opportunity to build wealth with a solid, established company.
While companies like Pfizer and Prudential haven’t seen much growth this year, Verizon has performed well, demonstrating the strength of its core business. In the second quarter of 2025, Verizon led the wireless industry with the biggest increase in revenue compared to the previous year and also gained more customers in the broadband market. Because of these strong results, Verizon now expects higher profits, earnings, and cash flow for the entire year.
As a market analyst, I’m seeing a strong total return for Verizon this year, and it’s largely driven by their dividend. While the stock price itself hasn’t moved dramatically, the 6.3% dividend yield is really boosting returns for investors. It’s also worth noting their consistent commitment to shareholders – they’ve actually increased their dividend every year for the past 19 years, which is a very positive sign.
While the telecom industry isn’t known for rapid growth, I believe Verizon’s growth will pick up over the next few years. This is mainly due to two things: first, Verizon is expected to finalize its purchase of Frontier Communications (FYBR) in early 2026, and second, the rollout of 6G networks starting around 2030 will create a significant opportunity for the company.
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2025-10-05 21:27