Snatch Up These 3 Blue-Chip Stocks at Depression-Era Prices Before it’s Too Late!

Stocks

Stock	Price	52 Week Range	Marketcap	EPS	Dividend Yield	Chart (24H)	Sector	Employees	Last Updated
Cisco Systems, Inc. CSCO	$58.98		234.90B	2.33	2.73%		Technology	84,900	5 hours ago
Starbucks Corporation SBUX	$87.44		99.14B	3.31	2.77%		Consumer Cyclical	381,000	5 hours ago
UnitedHealth Group Incorporated UNH	$506.34		465.98B	15.40	1.68%		Healthcare	440,000	5 hours ago

For those who’ve been chasing blue-chip stocks within the S&P 500, you may have noticed the troublingly high valuations. The S&P 500 is trading at 24.05x its trailing 12-month earnings and 22.27x its 12-month forward estimate. Compare this to a year ago when the trailing 12-month P/E ratio was 19.61x, and it’s clear that bargains are few and far between. But here’s the twist: the market is deeper than the S&P 500. Enter the CRSP US Mega Cap Index, an undervalued gem ripe for savvy investors.

Let’s cut to the chase. While the S&P 500 is certainly the gold standard of blue-chip indexes, its cousin, the CRSP US Mega Cap Index, presents a robust alternative. The Vanguard Mega Cap ETF (NYSEARCA: MGC), which tracks this index, boasts a median market capitalization of over $462 billion. This dwarfs the $314 billion median market cap of the SPDR S&P 500 ETF Trust (NYSEARCA: SPY).

Why is this important? Higher median market capitalization suggests greater stability and resources, making these companies attractive even during market volatility. MGC contains 206 stocks, with technology making up 40.87% of the index, compared to the S&P 500’s 32.77%. This unique portfolio composition opens the door to compelling opportunities, particularly in tech-heavy segments. Time to delve into some of these blue-chip bargains.

Editor's Note: Analysis and insight for this article were originally sourced sourced from our friends at Insert Website Name Here! 

Cisco Systems (CSCO)

Cisco Systems, Inc.

CSCO

$58.98

1%

Cisco Systems (CSCO): Here’s Why Analysts See a 15.20% Upside in Cisco Stock

Cisco (NASDAQ: CSCO) is weighted at 0.45% in MGC, and its P/E ratios of 16.05x (trailing) and 13.5x (forward) stand out in an overvalued market. Sporting a market cap of $190 billion, Cisco’s valuation multiples are leaner than those of the S&P 500 and its own five-year historical averages.

Let’s acknowledge the elephant in the room: Cisco’s stock has been underwhelming over the past five years, shedding nearly 17% of its value. Even analysts aren’t thrilled—only 7 out of 28 recommend buying, with a target price of $53, which is still 12% above its current trading price.

Part of Cisco’s stagnation can be traced back to its meteoric rise and subsequent crash; the stock skyrocketed 1000x in the decade before the year 2000 and has never revisited its all-time high of around $80, reached in March 2000. However, don’t write off Cisco just yet. The company’s $1 billion investment fund to develop secure AI solutions indicates a forward-thinking approach.

With investments in companies like Cohere, Mistral AI, and Scale AI, and a catalogue of 20 AI-related acquisitions, Cisco is positioning itself for long-term success. Investors can also enjoy a 3.4% dividend yield while waiting for the stock to rebound.

Analyst Ratings and Outlook for Cisco Systems (CSCO)

Analyst Outlook Summary

Analysts have a moderate buy consensus on Cisco Systems Inc. (CSCO), with 15 buy ratings and 12 hold ratings. The average analyst price target is $54.73, indicating a potential increase of 15.20% from the current price of $47.51. Additionally, CSCO has consistently beaten earnings estimates, outperforming its overall industry for the past year.

Sources:

1. WSJ: Cisco Systems Inc. Analyst Estimates & Rating
2. TipRanks: Cisco Systems (CSCO) Stock Forecast & Price Target
3. Yahoo Finance: Cisco Systems, Inc. (CSCO) Analyst Ratings, Estimates & Forecasts
4. CNN: CSCO Stock Quote Price and Forecast
5. Nasdaq: Cisco Systems, Inc. Common Stock (DE) (CSCO) Analyst Research

Starbucks (SBUX)

Starbucks Corporation

SBUX

$87.44

1%

Starbucks (SBUX): Don’t Miss Out on This 37% Discount from Its Peak

Starbucks (NASDAQ: SBUX), with a 0.24% weight in MGC, has been an intriguing blue-chip bargain. Its P/E ratios of 21.25x (trailing) and 19.41x (forward) are not just lower than the S&P 500, but are also at five-year lows for the company itself.

Starbucks has been facing operational challenges, evident from its recent same-store sales decline in Q2 2024—U.S. same-store sales dipped 3%, and traffic dwindled by 7%, forcing a downward revision in 2024 guidance. But here’s why you should still be bullish: innovation.

The company’s new “Siren Craft System” aims to streamline operations and reduce barista workload, and it’s set to be deployed across all 10,000 North American stores. Down 37% from its July 2021 peak of $121, Starbucks has a proven track record of rebounding from setbacks. Now’s the time to capitalize on this undervalued blue-chip before it sizzles back up.

Analyst Ratings and Outlook for Starbucks (SBUX)

Analysts’ Outlook Summary

The analysts have generally positive expectations for Starbucks Corporation (SBUX). The consensus rating is Moderate Buy, indicating a mix of buy and hold recommendations. The average price target is $88.63, which represents a 13.85% gain from the current price of $77.85. The analysts are optimistic, forecasting both positive earnings and long-term growth prospects for the company.

Sources:

1. Yahoo Finance: Outlines the management of cookies and privacy settings across the YahooBrands family, including information on modifying preferences and understanding data usage.
2. TipRanks: Starbucks (SBUX) Stock Forecast & Price Target
3. Zacks: Starbucks Corporation (SBUX) Analyst Estimates

UnitedHealth Group (UNH)

UnitedHealth Group Incorporated

UNH

$506.34

1%

UnitedHealth Group (UNH): Solid Fundamentals Indicate a 15% Upside – Strong Buy!

UnitedHealth Group (NYSE: UNH) is a heavyweight in MGC, carrying a 1.23% weight. While its P/E of 30.20x may turn some heads, the forward P/E of 18.32x renders it more appealing compared to an overvalued S&P 500. With a market cap of $457 billion, UnitedHealth embodies stability.

Despite acquiring Change Healthcare for $13 billion—including debt—in October 2022, a subsequent cyberattack brought temporary chaos, affecting its health tech subsidiary. The incident will cost UnitedHealth around $1.25 per share at the midpoint of its guidance, translating to nearly $2 billion.

For most companies, such a hit would be crippling. Not so for UnitedHealth; the losses account for just 7% of its 2024 adjusted net earnings estimate of $27.75 per share. With $79 billion in cash and investments, UnitedHealth’s financial muscle is indisputable. Of the 31 analysts covering the stock, 28 rate it a buy, targeting a price of $574, about 15% above its current trading level.

Analyst Ratings and Outlook for UnitedHealth Group (UNH)

Summary of Analyst Outlook

Analysts have a strong positive outlook on UnitedHealth Group (UNH). The consensus rating is a strong buy, indicating broad support among analysts for purchasing the stock. Additionally, the average price target suggests a potential upside of 11.09% from the current stock price.

Sources:

1. Yahoo Finance: UnitedHealth Group (UNH) Historical Data
2. Zacks: UnitedHealth Group (UNH) Analyst Estimates
3. TipRanks: UnitedHealth Group (UNH) Stock Forecast & Price Target
4. Nasdaq: UnitedHealth Group (UNH) Analyst Research
5. Benzinga: UnitedHealth Group (UNH) Analyst Ratings

We hope this deep dive uncovers hidden gems for our astute readers. Unconventional wisdom often reveals the most rewarding investments, so steer clear of mainstream advice and explore these undervalued blue-chip bargains that promise remarkable returns.