A value stock is one that seems to be undervalued based on a combination of factors, such as its valuation history, current stock price, dividend yield, dominant market share and others. Of course, this definition begs the question: Why wouldn’t investors only buy value stocks?
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The reason is that so-called “value stocks” generally aren’t newsmakers — some would even classify them as “boring.” Think about the stocks you hear on the financial news all day; typically, they are exciting, high-flying growth stocks like Nvidia (NVDA) or Palantir (PLTR), which gained 171% and 340% respectively in 2024.
Meanwhile, oil and gas companies, utilities and other more traditional companies tend to lumber along under the radar. But that doesn’t mean these names can’t generate big stock profits for investors who do their research. And while value stocks have long suffered in the shadow of their growth-stock siblings, things may be changing in 2025. Thanks to a combination of stiff tariffs, lingering inflation and an overall sense of uncertainty, value stocks are starting to build momentum. Here’s a look at some of the best value stock options for 2025 and the reasons investors are taking notice.
Best Value Stocks in 2025
Constellation Brands (STZ)
- Price as of Apr. 17, 2025: $186.63
- Average 12-month analyst target: $216.80
Constellation Brands is the largest provider of beer, wine and spirits in America, according to Morningstar, which also recommends the stock with a fair value estimate of $274. The importer of Modelo and Corona has caught the eye of noted value investor Warren Buffett, whose Berkshire Hathaway recently bet big on the stock with a $1.24 billion investment.
Alphabet (GOOGL)
- Price as of Apr. 18, 2025: $151.16
- Average 12-month analyst target: $205.39
Alphabet, still commonly referred to as Google, may seem like a high-flying tech stock, but on a P/E basis, it’s actually considered a value stock, with a below-market multiple. Litigation concerns have helped keep the stock down, but the company still generates copious amounts of free cash flow from its many diverse businesses, including search, cloud computing and advertising. Continued growth in AI and self-driving cars should also push the stock higher over the long run.
Chevron (CVX)
- Price as of Apr. 18, 2025: $137.87
- Average 12-month analyst target: $170.72
Mature energy companies like Chevron are prototypical value stocks, and that remains the case in 2025. Even with the price of oil falling 10% since the start of the year, Chevron has held up better than the S&P 500, with shares dropping just under 5%. A 14x P/E multiple and a nearly 5% yield make the stock attractive to investors. Analysts forecast a 24% pop in the stock from current levels.
PepsiCo (PEP)
- Price as of Apr. 18, 2025: $142.84
- Average 12-month analyst target: $160.91
With a P/E multiple well below the S&P 500’s and a fat 3.79% dividend yield, PepsiCo is the epitome of a value stock. It’s particularly attractive in 2025, as fear and uncertainty have gripped the market and investors are looking for a place to hide. Even if the country falls into a recession, consumers are likely to continue buying the company’s lineup of snacks and beverages.
Why Invest in Value Stocks?
Value stocks have a number of factors making them good options for investment:
- Low price-to-earnings ratios: If market multiples expand, value stocks have room to rise.
- High dividends: Most value stocks pay above-average cash dividends that contribute greatly to their overall return.
- Low volatility: Value stocks can be a great way to damp down the volatility that high-multiple growth stocks tend to add to a portfolio.
Value Stocks vs. Other Investment Options
If you’re considering buying a value stock, do some research into your other options as well to make sure that you’re making the right choice for you. Here’s a side-by-side comparison of the pros and cons of both value stocks and other investment options.
| Investment | Pros | Cons |
| Value stocks | Typically are less volatile than the overall market; may pay high dividends | Can remain undervalued perpetually; can be slow to appreciate without a market catalyst or shift in investment trends |
| Value stock ETFs | Diversification avoids single-stock risk and provides a greater chance of including a winning stock in your portfolio | Provide an “average” return, rather than the potentially high returns of a winning individual stock |
| Growth stocks | Offer the potential for high returns | May be too volatile for some investors |
| Growth stock ETFs | Diversification can help eliminate single-stock risk | Don’t offer “pure play” exposure to individual growth stocks |
Risks of Investing in Value Stocks
Although value stocks generally come with less volatility, they aren’t without risks. Here are some of the most prominent:
- Remaining out-of-favor: Investors buy value stocks hoping that they will be recognized as underappreciate and their prices will rise. But many value stocks languish for years or even decades without generating profits for their investors, particularly during growth phases of the market.
- Declining earnings growth: While some stocks tend to trade at low P/Es simply due to the industry they are in — think utilities — others may seem like a bargain because they have consistently disappointed investors. Growth stocks that stop growing, for example, can get hammered down to “value” price levels and yet still remain exceedingly risky, as their earnings may continue to decline.
- Illiquidity: Some value stocks are so forgotten that they don’t trade very many shares per day. In a declining market, this can make them hard to sell at a fair price.
Trends Shaping Value Stocks in 2025
In 2025, value is coming back into favor due to a rare combination of events. Whereas growth stocks powered the S&P 500’s back-to-back 20%-plus years in 2023 and 2024, the ground is shifting thus far in 2025. Here are some of the current trends affecting value stocks:
- Tariffs threatening to slow earnings, particularly of high-growth stocks
- Uncertainty caused by the Trump Administration’s daily proclamations
- High overall market valuation
- Potential for growth in overlooked areas as geopolitical tensions and trade worries open up alternative options
How To Buy Value Stocks
The process for buying value stocks is as simple and straightforward as buying any other type of stock:
- Choose a brokerage platform: You’ll generally want to look for a broker that charges zero commissions on stock trades while still providing you with good customer service, a mobile app and enough investment options to meet your needs.
- Search for the company’s ticker: You’ll need the stock ticker symbol to enter any trades.
- Research your investment: Just because a stock meets the general definition of being a “value stock” doesn’t mean that it’s going to go up in value anytime soon, or that it matches your investment objectives and risk tolerance. Do your own homework before you enter any financial transactions.
- Decide how much to invest: Advisors generally recommend that investors diversify their portfolios, rather than pinning their fortunes to a single stock. It’s never been easier to diversify thanks to the rise of zero-commission brokers that allow you to buy fractional shares of stock.
- Enter your trade: Armed with all of the information above, you’ll be ready to enter your trade on your broker’s online platform.
Daria Uhlig contributed to the reporting for this article.
Data was compiled on Apr. 18, 2025, and is subject to change.