The 3 Most Undervalued Blue-Chip Stocks to Buy in May 2024 (2024)

Blue-chip stocks are often well-known brands with a history of steady dividend payments and a dominant hold on their respective markets. Investors who want the least risk involved with long-term investing can look to undervalued blue-chip stocks first and buy and hold with little worry, as the stocks’ performances speak for themselves.

These three blue-chip stocks have excellent dividend yields and extremely stable growth. They are currently priced below their total valuation, offering investors a unique opportunity to capitalize on their development for less.

Let’s learn more about these stocks’ rock-solid business models, target markets that provide constant demand, and enticing history of growing payouts, which make them the best undervalued blue-chip stocks to buy this month.

Realty Income (O)

Realty Income (NYSE:O) is the pinnacle of a solid Real Estate Investment Trust (REIT) that investors can buy for guaranteed dividends, reflecting a high percentage of the company’s income. Dividend and blue chip investors can enjoy the consistent flow of monthly dividends from Realty Income.

Realty has proven its ability to support its resilient business model, raising its dividend for over 30 years straight and currently sitting at a 5.56% dividend yield. The company maintains such solid showings, focusing primarily on retail properties that perform well even in the worst economic conditions.

What makes this stock particularly attractive right now is the effect of inflation on its price. While Realty still demonstrates upward growth, it has been slowed by high rates. The pressure inflation puts on tenants buying Realty’s properties can create this short-term stoppage, but historically, REITs have been more resilient than other business types.

Investors should get their hands on Realty Income at a lower price than anticipated. As an inflation-resistant, high dividend, financially sound blue chip stock, few others can compare to Realty’s long-term hold value.

Coca-Cola (KO)

Blue chip stocks consist of some of the most well-known companies in existence today, and Coca-Cola (NYSE:KO) is no exception. Coca-Cola is the largest company in the beverage industry, with a wide range of products and a market cap of $267.82 billion.

Coca-Cola trades at a P/E ratio of 23.11, higher than some of the other blue-chip stocks available. However, considering the decades of consistent dividend growth and financial gain, the valuation is still not unreasonable. In fact, from a historical perspective, Coca-Cola is one of the most proven dividend stocks of all time.

For over 50 years, Coca-Cola has continuously increased its dividends. Considering the economic ups and downs the world has seen throughout that time, an objective view of Coca-Cola’s numbers demonstrates why it ranks high even within blue chip stocks. The risk is almost as low as can be in trading, and the reward only ever increases.

Investors need not look further for a fantastic blue-chip stock to buy now and enjoy almost certain growth over the next few years.

Altria Group (MO)

Altria Group (NYSE:MO) is a steadily growing tobacco products company responsible for sales of the popular cigarette brand Marlboro. While some investors may not be interested in a company of its nature, there is no denying the dividend and growth potential Altria holds as a blue-chip stock.

Over the last 10 years, dividend payments have increased at an astonishing rate of 7.51%, and the dividend yield currently sits at 8.99%. While some might be concerned about the long-term holding power of the tobacco and smoking industry, Altria is making efforts to ensure future success.

The smoking market is shrinking as more and more consumers shift their preferences toward smokeless products. However, Altria is ensuring its position at the forefront of this change, creating and leading smokers to its own smoke-free product platforms.

Altria’s stock is one of the cheapest blue chip stocks, as many investors have turned their back on its prospects. The undervaluation calls for attention alone. However, Altria has also recently begun a $2.4 billion accelerated share repurchase program after selling off its shares in Anheiser-Busch.

The move is almost certain to create upward momentum for Altria, and the company’s impressive dividend history and low valuation make it an excellent buy.

On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.comPublishing Guidelines.

Joel Lim is a contributor at InvestorPlace.com and a finance content contractor who creates content for several companies like LTSE and Realtor, along with financial publications, including Business Insider, Yahoo Finance, Mises Institution and Foundation for Economic Education.