Growth stocks had the upper hand in 2024: The Morningstar US Growth Index outperformed the Morningstar US Value Index by around 10 percentage points for the year. So far in 2025, however, value stocks have turned the tides.
Where do value stocks stand today?
“In our 2025 US Market Outlook, we recommended investors overweight value stocks as they were trading at an attractive discount to fair value, especially as compared to overvalued growth stocks,“ says Morningstar chief US market strategist Dave Sekera. “Since then, value stocks have held up, whereas growth stocks have fallen precipitously. At this point, growth stocks have fallen enough they are trading close to fair value, yet value stocks remain at a greater discount and are more attractive on both an absolute and relative value basis.”
We’ve put together a list of the best value stocks to buy for the long term, using these criteria:
• The stocks land in the value portion of the Morningstar Style Box.
• The stocks are from companies included on Morningstar’s list of the Best Companies to Own for 2025. Companies on this list have wide Morningstar Economic Moat Ratings and predictable cash flows, and they are run by management teams that make smart capital-allocation decisions.
• The stocks are cheap, which means they’re trading below Morningstar’s fair value estimates.
10 Best US Value Stocks to Invest in for the Long Term
The 10 cheapest value stocks from Morningstar’s Best Companies to Own list as of March 17, 2025, were:
- Pfizer PFE
- Campbell CPB
- Nike NKE
- Huntington Ingalls HII
- Constellation Brands STZ
- Brown-Forman BF.B
- Alphabet GOOGL
- GSK GSK
- Zimmer Biomet ZBH
- Danaher DHR
Here’s a little bit about each of these value stocks for the long term. Data is as of March 17.
Pfizer
- Price/Fair Value: 0.62
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Large Value
- Morningstar Capital Allocation Rating: Standard
- Industry: Drug Manufacturers—General
A household name among drug manufacturers, Pfizer tops our list of best stocks to buy this month. It’s the first stock on our list from a sector that some may not associate with value: healthcare. Pfizer’s large size gives it significant competitive advantages in developing new drugs, and its diverse portfolio of drugs helps insulate the company from any one particular patent loss, says Morningstar director Karen Andersen. After many years of struggling to bring out important new drugs, Pfizer is now launching several potential blockbusters in cancer and immunology. With limited patent losses and fewer older drugs, Pfizer is poised for steady growth (excluding the more volatile covid-19-related product sales) before a round of major patent losses hits in 2028. Pfizer stock is currently trading at a 38% discount to its fair value estimate of $42 per share.
Campbell
- Price/Fair Value: 0.64
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Mid-Value
- Morningstar Capital Allocation Rating: Standard
- Industry: Packaged Foods
Campbell stock is trading 36% below our $61 fair value estimate. The company earns a wide economic moat rating thanks to its cost advantages and brands, which include its namesake brand, Pace, Prego, and Swanson, among others. We think Campbell’s strategy is sound, observes Morningstar director Erin Lash. By leveraging technology, data insights, and artificial intelligence, the company brings products that consumers value to the shelf in a timely fashion. “We believe Campbell remains committed to extracting inefficiencies from its supply chain and distribution network, optimizing direct-to-store routes, and investing in automation,” she adds. Campbell recently laid out plans to unlock $250 million in savings through fiscal 2028, on top of the $950 million it realized over the past few years.
Nike
- Price/Fair Value: 0.66
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Large Value
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Footwear and Accessories
The largest athletic footwear brand in all major categories and all major markets, Nike dominates categories like running and basketball with popular shoe styles. We view Nike as the leader of the athletic apparel market and believe it will overcome current challenges, such as uneven demand for sportswear in key markets, argues Morningstar senior analyst David Swartz. Nike has a renewed focus on its key partners, its products, and its connections to international athletics under new CEO Elliott Hill. Over the past few years, the firm has invested in its direct-to-consumer network while cutting many wholesale accounts. Nike stock trades at a 34% discount to our fair value estimate of $112 per share.
Huntington Ingalls
- Price/Fair Value: 0.66
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Small Value
- Morningstar Capital Allocation Rating: Standard
- Industry: Aerospace and Defense
Huntington Ingalls is the largest independent military shipbuilder in the US, spun off of Northrop Grumman NOC in 2011. While defense contractors tend to have relatively slow growth, the nature of the industry allows them to deliver a lot of cash to shareholders. Huntington Ingalls derives practically all of its profits from building ships for the US Navy. Each vessel takes years to manufacture, remains in service for decades, and is typically purchased in blocks to reduce unit costs. Morningstar analyst Nic Owens points out that these long lead times mean that funding for a project is difficult to cut, and block purchases give the builder visibility into long-term revenue. “Huntington Ingalls’ top line is, therefore, less sensitive to changes in the defense budget than peers, making it a defensive play even among defense contractors,” he says. Huntington Ingalls stock trades at a 34% discount to our fair value estimate of $312 per share.
Constellation Brands
- Price/Fair Value: 0.67
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Mid-Value
- Morningstar Capital Allocation Rating: Standard
- Industry: Beverages—Brewers
Constellation Brands rejoins our list of best value stocks to buy. The firm is the largest provider of alcoholic beverages across the beer, wine, and spirits categories in the United States, generating 80% of revenue from Mexican beer imports under top-selling brands such as Modelo and Corona. While overall beer volume in the US has been stagnant, Constellation has capitalized on premiumization tailwinds to drive high-single-digit volume growth in past years. Morningstar analyst Dan Su expects the company’s beer volume growth to remain strong in the coming years, backed by consumer loyalty and a solid innovation pipeline. Constellation Brands stock trades at a 33% discount to our fair value estimate of $274 per share.
Brown-Forman
- Price/Fair Value: 0.69
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Mid-Value
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Beverages—Wineries and Distilleries
Premium-spirits maker Brown-Forman is also new to our list of best companies to buy. The company has over 150 years of distilling experience specializing in Tennessee whiskey and Kentucky bourbon. Morningstar’s Su observes that Brown-Forman has earned accolades and loyalty from drinkers for distinct flavors and consistent quality, building strong brand equity for its core Jack Daniel’s trademark in the US and globally. Further, the company’s high-end positioning in the whiskey category aligns well with the industry’s premiumization trend. Still, the company must deal with some tax and regulatory headwinds affecting the industry as well as the proliferation of craft distillers that could chip away at Brown-Forman’s customer base. Shares of Brown-Forman stock are trading 31% below our fair value estimate of $52.
Alphabet
- Price/Fair Value: 0.69
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Large Value
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Internet Content and Information
Alphabet, the holding company of internet giant Google, rejoins our list. With solutions ranging from advertising to cloud computing and self-driving cars, Alphabet has built itself into a true technology behemoth, generating tens of billions of dollars in free cash flow annually. While antitrust concerns around Alphabet’s core search business have made headlines, Morningstar analyst Malik Ahmed Khan argues that the firm will be able to navigate these headwinds and maintain its leadership position in search and text-based advertising in the long term. Alphabet stock is trading 31% below our fair value estimate of $237 per share.
GSK
- Price/Fair Value: 0.69
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Large Value
- Morningstar Capital Allocation Rating: Standard
- Industry: Drug Manufacturers—General
Drugmaker GSK’s innovative new product lineup and expansive list of patent-protected drugs create a wide economic moat, says Morningstar senior analyst Jay Lee, as GSK’s diverse drug portfolio insulates the company from problems with any one product. The strong product pipeline at GSK stems from a shift in strategy; the firm had previously targeted slight enhancements but now focuses on true innovation. GSK is also branching out into emerging markets, where its vaccine segment positions the firm well in these price-sensitive markets. We expect GSK to be a major competitor in respiratory, HIV, and vaccines over the next decade. GSK stock trades 31% below our fair value estimate of $58 per share.
Zimmer Biomet
- Price/Fair Value: 0.75
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Mid-Value
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Medical Devices
Zimmer is the undisputed king of large-joint reconstruction, says Morningstar senior analyst Debbie Wang, and we expect aging baby boomers and improving technology suitable for younger patients to fuel solid demand for large-joint replacement that should offset price declines. The firm has cultivated close relationships with orthopedic surgeons who make the brand choice. High switching costs and high-touch service lead to strong loyalty to the brand. Zimmer also aims to accelerate growth through innovative products and improved execution, which we view as critical. Zimmer Biomet stock trades 25% below our fair value estimate of $150 per share.
Danaher
- Price/Fair Value: 0.79
- Morningstar Uncertainty Rating: Medium
- Morningstar Style Box: Large Value
- Morningstar Capital Allocation Rating: Exemplary
- Industry: Diagnostics and Research
Medical technology company Danaher rounds out our list of the best value stocks to buy. The firm offers differentiated technology that is protected by various intangible assets, including patents, brands, copyrights, and trademarks, observes Morningstar senior analyst Julie Utterback. Danaher seeks out attractive markets and makes acquisitions to enter or expand within those fields, and it also divests assets that are no longer core to the business. The company’s acquisition-focused strategy has contributed to it becoming a top-five player in the highly fragmented and relatively sticky life science and diagnostic tool markets. Danaher stock trades at an 21% discount to our fair value estimate of $270 per share.
What Are Value Stocks?
Simply put, value stocks are stocks that trade below what they’re worth. “Worth” is usually measured by popular valuation yardsticks, such as price/earnings or price/book ratios. Value stocks are often (but not always) found in more established industries with less robust growth prospects. Value stocks also tend to come from mature companies that pay out at least some of their earnings as dividends. In addition, companies that may have solid long-term growth prospects but whose stocks have fallen out of favor for some short-term reason (bad business news, potential regulatory risk, and so on) can become value stocks, too.
What Are the Morningstar Style Box and Fair Value Estimate?
The Morningstar Style Box is a nine-square grid that provides a graphical representation of the investment style of stocks, bonds, or funds. Based on a series of inputs—including a company’s historical and long-term projected growth and its historical and forward-looking price multiples—a stock is classified as either a value stock, a growth stock, or a core stock. A stock is also classified as either small-cap, mid-cap, or large-cap based on its market capitalization.
The fair value estimate, meanwhile, represents what Morningstar analysts think a particular stock is worth. Fair value estimates are rooted in the fundamentals and based on how much cash we think a company can generate in the future, not on fleeting metrics such as recent earnings or current stock price momentum.
How to Find More Cheap Value Stocks to Buy
Of course, there are many other criteria investors can use to find value stocks to buy for the long term. Here are some tools that investors can use to find more value-stock ideas to research further:
• Investors can use the Morningstar Investor screener to more easily compare value stocks to each other. One way would be to screen by Stock Style under the Criteria drop-down menu, choosing large value, mid-value, small value, or some combination thereof. Then once you have your results, click on Data & Columns to select Financials data points in the Stocks area. These might be valuation metrics like price/earnings ratios or profitability measures like return on assets, among others. Then click Update. Once back to the list of stocks, click on the data point that matters most to you to rank the list on that particular data point.
• Investors who’d rather invest in value stocks through a managed product like an exchange-traded fund or a mutual fund can find ideas to research further in The Best Value Funds.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
