The 10 Best Companies to Invest in Now

Fears over artificial intelligence disruption have sparked volatility across multiple industries that investors worry could be fully upended by new technology. In addition, the war in Iran has added continuing uncertainty to the financial markets.

The US market isn’t at quite the discount it was earlier in the spring. “At the end of March, the market was trading at a 12% discount compared with a composite of our valuations. Since then, the Morningstar US Market Index has risen 16%,“ says Morningstar’s chief US market strategist David Sekera. ”Based on a combination of the market rally partially offset by increases in a number of our valuations, as of May 15, 2026, the US equity market was trading at a 5% discount." Sekera recommends investors harvest returns in the growth category (specifically technology and AI stocks) and reallocate those proceeds back into value.

Regardless of where the markets are headed, investors may want to own companies that offer some sense of certainty in terms of cash flows and company fundamentals. That’s where Morningstar’s Best Companies to Own list comes in. The companies on this list have significant competitive advantages. We believe the best companies have predictable cash flows and are run by management teams that have a history of making smart capital-allocation decisions.

But the best companies aren’t always the best stocks to buy now. How much an investor pays to own a company—best or otherwise—is important, too. So, here we’re focusing on the companies with the most undervalued stock prices today.

10 Best Stocks to Buy Now

The 10 most undervalued stocks from our Best Companies to Own list as of May 26, 2026, were:

1. Campbell’s CPB
2. SAP SAP
3. Zoetis ZTS
4. Broadridge Financial Solutions BR
5. RELX RELX
6. Yum China YUMC
7. Clorox CLX
8. Tractor Supply TSCO
9. Danaher DHR
10. Zimmer Biomet ZBH

Here’s a little more about each of the best companies to buy now, including commentary from the Morningstar analysts who cover each company. All data is as of May 26, 2026.

Campbell’s

• Morningstar Price/Fair Value: 0.36
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Standard
• Industry: Packaged Foods

Packaged foods company Campbell’s is the most affordable stock on our list of the best stocks to buy. Over the past 150-plus years, Campbell’s has evolved into a leading domestic packaged food manufacturer, with a portfolio that extends beyond its iconic red-and-white labeled canned soup. The stock is trading 64% below our fair value estimate of $56 per share.

Over the past six-plus years, Campbell’s has orchestrated significant changes. For one, the portfolio mix has shifted significantly: its core soup lineup now accounts for just over 25% of total sales (down from more than 40% in fiscal 2017), while snacks account for just over 40% (up from less than 30%). In addition, the firm has worked to drive efficiencies across its supply chain and manufacturing network to boost spending behind its brands and capabilities, thereby solidifying its competitive edge. The byproduct of these efforts has been 1% average annual organic sales growth over the past five years alongside low-teens average adjusted operating margins.

We expect further gains from Campbell’s sound strategic focus—leveraging technology, data insights, and artificial intelligence to bring products to market that align with evolving consumer trends in a timely manner while strictly managing costs. To further these efforts, Campbell’s recently outlined plans to unlock $375 million in savings through fiscal 2028 (up from $250 million previously) and now also sees an extra $100 million in overhead reductions. This is in addition to the $950 million realized over the past few years, driven by optimization, technological enhancements, and reduced indirect spending. Importantly, we expect these efforts to fund investments in consumer-valued innovation and marketing. As such, we forecast 5% of sales will be directed to research, development, and marketing on average annually (approximately $550 million). We see this as key to helping ensure its brands keep pace with consumer preferences, underpinning the firm’s intangibles-based moat.

We think Campbell’s still seeks inorganic growth opportunities. Most recently, Campbell’s acquired a 49% stake in La Regina, maker of Rao’s sauces. This follows the 2024 acquisition of Sovos Brands, which generates around $1 billion in annual sales. We see its exposure to the premium sauce aisle complementing its lower-priced Prego brand and benefiting from Campbell’s financial resources and entrenched retailer relationships. This addition should spur distribution gains as the integration progresses, juicing its sales prospects.

Read more about Campbell’s here.

SAP

• Morningstar Price/Fair Value: 0.55
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Standard
• Industry: Software—Application

Founded in Germany in 1972 by former IBM employees, SAP is the world’s largest provider of enterprise application software. The stock is trading at a 45% discount to our fair value estimate of $317 per share.

SAP is the world’s largest provider of enterprise application software and global market leader in enterprise resource planning software. The company earns revenue by selling subscriptions for its various cloud-based software-as-a-service products as well as licenses and maintenance fees for on-premises software, which are now being largely phased out. Besides its core ERP products such as S/4HANA, SAP offers well-known back-office software products such as Concur for travel and expense management and Ariba for procurement.

The company was late to the cloud for ERP software but now offers two compelling products: RISE with SAP, which is the private-cloud edition designed for SAP’s large enterprise customers that are transitioning from their SAP on-premises ERP (ECC) to SAP S/4HANA; and GROW with SAP, which is the public cloud edition that is designed for midmarket companies with less complex requirements. We think GROW with SAP fills an important void in SAP’s product offering, as previously SAP’s ERP software was often unattractive to smaller customers given the implementation costs were just too high. With the launch of these new products, cloud revenue is growing swiftly and SAP is capturing many new midmarket customers.

SAP is following a land-and-expand strategy, which is common in the enterprise software market. RISE with SAP and GROW with SAP are the land products, after which the company then upsells and cross-sells more SAP products to these customers, which is much easier in a cloud-based model. The company has yet to release its latest long-term ambitions but expects revenue growth to accelerate at least through 2027 along with rising margins as the cloud business reaches efficient scale.

Read more about SAP here.

Zoetis

• Morningstar Price/Fair Value: 0.57
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Drug Manufacturers—Specialty & Generic

Next on our list of the best stocks to buy is Zoetis. This company sells anti-infectives, vaccines, parasiticides, diagnostics, and other health products for animals. The stock is trading at a 43% discount to our fair value estimate of $140 per share.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on the impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

The animal health industry had long been largely ignored because these businesses were buried within larger human health companies, but no longer. It has many attractive characteristics, including cash-pay buyers, a fragmented customer base, relatively low development costs, and opportunities to introduce novel therapies. Due to the fragmented and cash-pay customer base, animal drugmakers hold significant pricing power. On the human health side, firms are traditionally at the mercy of payers. Government payers or large managed care firms with pharmacy benefit managers have more power to force generic utilization, squash price increases, and even in extreme cases extract sizable rebates from drug manufacturers. However, animal health products are purchased by a fragmented group of protein producers, veterinarians, and pet owners, allowing very little bargaining power over the highly concentrated animal health firms.

This industry also benefits from favorable growth tailwinds that should allow Zoetis to increase companion animal revenue at a high-single-digit long-term growth rate. Zoetis has benefited from pet owners’ increasingly strong relationships with pets as members of the family, which drastically increases their willingness to pay for expensive treatments. However, heightened competition from Elanco and Merck has entered the picture, which we think can eat into Zoetis’ key parasiticide and dermatology franchises. This puts more pressure on the firm to develop and launch innovative therapies, which has been one of Zoetis’ strengths.

Read more about Zoetis here.

Broadridge Financial Solutions

• Morningstar Price/Fair Value: 0.58
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Standard
• Industry: Information Technology Services

Broadridge Financial Solutions, which was spun off from Automatic Data Processing in 2007, is a leading provider of investor communication and technology-driven solutions to banks, broker/dealers, traditional and alternative-asset managers, wealth managers, and corporate issuers. The stock is trading at a 42% discount to our fair value estimate of $255 per share.

Broadridge Financial Solutions has been the dominant proxy and interim services provider for broker/dealers for more than 20 years. Its regulated proxy and interim business is its crown jewel, and a disproportionate amount of its net income comes from its fiscal third and fourth quarters during proxy season. Broadridge generates over 30% of its fee revenue and EBITDA from its global technology and operations segment, which provides securities processing solutions. Broadridge has benefited from higher engagement of retail investors through higher position growth and elevated trading volume.

Since its spinoff from Automatic Data Processing in 2007, Broadridge has streamlined its operations and expanded into adjacent markets. After years of losses in its clearing business, Broadridge sold it to Penson Worldwide in 2010. Expanding on its mailing, data security, and processing capabilities, Broadridge has completed over 30 acquisitions since 2010. Notable purchases include DST’s North American customer communications business for $410 million in 2016 and RPM Technologies for $300 million in 2019. The NACC business provides print and digital communication solutions, content management, postal optimization, and fulfillment to a variety of sectors, including financial services, utilities, and healthcare. RPM provides enterprise wealth-management software solutions and services. In 2021, Broadridge acquired Itiviti, a provider of order and execution management trading software and order routing, networking, and connectivity solutions, for $2.5 billion, which was pricey, in our view.

During its December 2023 investor day, Broadridge laid out three-year annual goals including recurring revenue growth of 7%-9% (organic 5%-8%), adjusted operating margin expansion of at least 50 basis points, and adjusted earnings per share growth of 8%-12%. These targets are similar to its prior three-year goals, which Broadridge largely achieved.

Read more about Broadridge Financial Solutions here.

RELX

• Morningstar Price/Fair Value: 0.58
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Specialty Business Services

RELX is a global provider of information-based analytics and decision tools for professional and business customers in various industries. The stock is trading at a 42% discount to our fair value estimate of $57 per share.

RELX, based in the UK, is a global provider of business information, analytics, and decision-making tools for professionals in various industries. It generates revenue mainly by creating and selling access to curated information databases, analytics, and journals. In addition, RELX organizes major events such as trade shows and conferences.

Nearly all information and analytics products are delivered digitally, print is now a minor part of the business. Offerings are sold mainly by subscription, which accounts for around 55% of revenue. However, the majority of the remaining 45% transactional revenue is under long-term contracts with volumetric elements, so essentially recurring in nature.

The core tenet of RELX’s strategy is to grow its portfolio of information-based analytics and decision-making tools to help its customers be more productive and make better decisions in their day-to-day workflow. The company also aims to expand into higher growth adjacencies and geographies organically and through selective acquisitions. Last, RELX focuses on continuous process innovation to manage cost growth below revenue growth.

RELX does not give hard numbers for its strategic targets. Instead, the company aims to deliver an improving revenue and earnings growth profile and higher returns. In our view, investors can typically expect midsingle-digit organic revenue growth and a 10- to 40-basis-point increase in adjusted operating margin each year in what we think is a low-uncertainty business.

Read more about RELX here.

Yum China

• Morningstar Price/Fair Value: 0.58
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Standard
• Industry: Restaurants

Yum China is the largest restaurant operator in China, with over 18,000 locations and USD 12 billion in systemwide sales as of 2025. The stock is trading at a 42% discount to our fair value estimate of $76 per share.

The Chinese restaurant sector continues to face headwinds from the real estate downturn and a lack of economic stimulus, affecting consumer spending. In this environment, we recommend that investors focus on companies that possess the scale to be more aggressive on pricing, as value-oriented players typically perform better during economic downturns. A healthy balance sheet is also crucial.

Yum China is well-positioned to gain share in the fragmented Chinese restaurant market, where chain restaurants account for only about 20% of China’s restaurant spending, versus roughly 35% globally and 60% in the US, underscoring a long runway for consolidation that should disproportionately benefit Yum China.

Despite current economic headwinds, we remain confident in the long-term growth of the quick-service restaurant segment, driven by three secular trends: 1) the increasing number of office-based workers, 2) rising disposable incomes, and 3) shrinking family sizes.

Looking ahead, we expect the company to meet its 2026-28 targets, including: 1) mid- to high-single-digit system sales compound annual growth rates, 2) double-digit CAGR in net new stores, 3) double-digit growth in free cash flow per share, and 4) returning 100% of free cash flow to shareholders.

We believe these goals are achievable by: 1) expanding into thousands of lower-tier towns that currently lack KFC, 2) broadening Pizza Hut’s footprint in cities that have KFC but not Pizza Hut, aided by the more budget- and takeout-friendly Pizza Wow format, and 3) accelerating franchise expansion, particularly in protected locations, to speed market entry.

Admittedly, some of Yum China’s nascent brands have underperformed, partly due to the macroeconomic slowdown. That said, we continue to view Lavazza as a high-quality brand with differentiated premium coffee positioning—an opportunity made more attractive by Starbucks’ recent challenges in China. With the group’s in-house supply chain lowering food costs, we expect future Lavazza growth to be profitable; the brand already achieved a 6% restaurant margin in the third quarter of 2025.

Read more about Yum China here.

Clorox

• Morningstar Price/Fair Value: 0.59
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Household & Personal Products

Since its inception more than 100 years ago, Clorox has expanded to operate in a variety of consumer product categories, including cleaning supplies, laundry care, trash bags, cat litter, charcoal, food dressings, water filtration products, and natural personal care products. The stock is trading at a 41% discount to our fair value estimate of $163 per share.

With its entrenched retail standing and unrelenting focus on investing in its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in industrywide promotional spending, particularly in litter, bags, and wraps. Still, we don’t believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Instead, from our perspective, Clorox remains resolute in investing to support the long-term health of the business, ensuring its competitive edge remains intact.

The pandemic buoyed e-commerce adoption, and Clorox realized the need to invest to bolster its digital capabilities, earmarking more than $500 million to accelerate productivity improvements, which we view as prudent. We’re encouraged that Clorox’s strategy remains anchored in bringing consumer-valued innovation to market and touting its fare to consumers, which strikes us as particularly critical against the current backdrop of tepid consumer spending and intense competition. Clorox goes to bat against lower-priced private-label fare in most categories, but we believe investments in innovation and marketing should help its products stand out on the shelf and deter trade-down. This underpins our forecast that Clorox will allocate around 13% of sales annually—just over $1 billion—to research, development, and marketing.

Even with these investments, we believe Clorox is on a path to maintaining the mid-40s gross margin that has historically characterized the business (up from the low 30s trough in the second quarter of fiscal 2022, when cost inflation proved to be a sizable headwind). And despite the potential hit from tariffs (which management had pegged at $40 million on a 12-month basis, or just a low-single-digit percentage of cost of goods sold), we think Clorox will prudently use a combination of cost-savings endeavors, price pack architecture, and surgical price hikes to dull any lasting hit to the margins.

Read more about Clorox here.

Tractor Supply

• Morningstar Price/Fair Value: 0.62
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Specialty Retail

Tractor Supply is the largest operator of retail farm and ranch stores in the US. The stock is trading at a 38% discount to our fair value estimate of $48 per share.

Tractor Supply is the largest consumer farm specialty retailer in the US, surpassing $15.5 billion in sales in fiscal 2025. The firm has differentiated itself through its products and customer demographics, which provide underlying support to its brand’s intangible assets and wide economic moat. At the end of 2025, the store base had grown about 23% over the prior five-year period, to approximately 2,600 locations, including acquired locations from Orscheln and Petsense, but produced sales and EPS at average annual growth rates over the past three years of only 3% and 2%, respectively, with profitability constrained by investments. We forecast the firm will grow to over 3,500 stores by 2035 as it expands into big-box centers in underpenetrated exurbs, with Petsense accounting for roughly 300 units.

The firm competes with big-box retailers like PetSmart and Lowe’s, which also have solid pricing power because of scale and distribution advantages across numerous categories. Tractor Supply also has smaller regional peers that tend to lack its scale and expansive product mix. We believe Tractor Supply derives its success from its evolving customer-led store layout, which makes it a destination store for many of its customers. In addition, since the firm focuses on active do-it-yourself rural consumers, many of its products are higher-end than those found in retailers that focus on casual consumers.

We think Tractor Supply has reached critical mass in its consumer segment, with efficiency gains ahead from category expansions such as side-lot garden centers, pet prescriptions, and fusion-format store updates, which should drive sales and profit growth. Better customer attribution data, improved bargaining power with vendors, and more sophisticated logistics should also improve inventory levels and cash conversion. Additionally, stable gross margins thanks to strong private-label penetration and operating cost leverage from scale should help operating margins average 10.3% throughout our forecast. Despite the strides made, investments to reach the big barn customer and expand the final mile could limit near-term operating margin upside.

Read more about Tractor Supply here.

Danaher

• Morningstar Price/Fair Value: 0.64
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Diagnostics & Research

In 1984, Danaher’s founders transformed a real estate organization into an industrial-focused manufacturing company. The stock is trading at a 36% discount to our fair value estimate of $270 per share.

Through its Danaher Business System, Danaher aims for continuous improvement of its scientific technology portfolio by seeking out attractive markets and then making acquisitions to enter or expand within those fields and also divesting assets that are no longer seen as core, such as the 2023 divestiture of Veralto, its environmental and applied solutions segment. After acquisitions, Danaher aims to accelerate core growth at acquired companies by making research and development and marketing-related investments. It also implements lean manufacturing principles and administrative cost controls to boost operating margins. Overall, we appreciate Danaher’s strategic moves, which have pushed it into attractive end markets with strong growth prospects and sticky, recurring revenue streams.

The company’s acquisition-focused strategy has contributed to its becoming a top-five player in the highly fragmented and relatively stable life sciences and diagnostic tool markets, approximately 20 years after its first acquisition in the space (Radiometer in 2004). Important life sciences and diagnostic acquisitions have included Beckman Coulter, Pall, and Cepheid. In early 2020, Danaher completed its largest acquisition, GE Biopharma, now known as Cytiva, which fills some gaps for Danaher within the biopharmaceutical development and manufacturing tool market. We find the drug manufacturing part of the life sciences market particularly attractive given its strong growth trajectory, high margins, and high switching costs associated with regulatory and reproducibility concerns of end users. Management is adding to its diagnostic tools, too, including the pending acquisition of Masimo and its industry-leading pulse oximetry tools, which is expected to close in late 2026.

Danaher also has a history of pruning its portfolio of businesses. The 2023 divestiture of its environmental and applied solutions group (now called Veralto) is just the latest for the company, which distributed shares in the now publicly traded Fortive Corp (industrials) to shareholders directly in 2016 and in Envista (dental) in 2019. Additional divestitures may be possible in the future as well.

Read more about Danaher here.

Zimmer Biomet

• Morningstar Price/Fair Value: 0.65
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Medical Devices

Medical devices company Zimmer Biomet rounds out our list of best stocks to buy. Zimmer Biomet designs, manufactures, and markets orthopedic reconstructive implants as well as supplies and surgical equipment for orthopedic surgery. The stock is 35% undervalued relative to our fair value estimate of $130 per share.

Zimmer Biomet is the market leader in large-joint reconstruction, and we expect aging baby boomers and improving technology suitable for younger patients to fuel solid demand for hip and knee replacement that should offset price declines. Zimmer stumbled into a series of pitfalls in 2016-17, including integration issues, supply and inventory challenges, and quality concerns. The firm’s efforts to turn itself around have been admirable, though the pandemic slowed progress. Despite all the improvement, the firm still hasn’t reached consistent growth and profitability gains.

Zimmer’s strategy is two-pronged. First, it is focused on cultivating close relationships with orthopedic surgeons who make the brand choice. High switching costs and high-touch service keep the surgeons closely tied to their primary vendor. This tight relationship and vendor loyalty also help explain why market share shifts in orthopedic implants are glacial, at best. As long as Zimmer can launch comparable technology within a few years of its rivals, it can remain in a strong competitive position. Nevertheless, we think surgeon influence will inevitably erode, as the practice of medicine changes in response to healthcare reform. Over the long term, it will be more difficult for surgeons to run private practices profitably, and more of them will be open to employment at hospitals.

Second, the firm aims to accelerate growth through innovative products and improved execution. The latter is critical, in our view, to realizing the firm’s potential. Despite a range of structural competitive advantages, Zimmer Biomet in 2016-18 failed to shine in operations, which dragged down returns. Former CEO Bryan Hanson delivered substantial signs of progress. Now, current CEO Ivan Tornos must continue the progress on robotic technology placements (especially in outpatient settings), related consumable product pull-through, and expansion of the firm’s digital portfolio. Additionally, we anticipate the firm will flex its advantage in key areas, including extremities, trauma, and collaborations that involve sensor and digital technologies to improve surgical workflow.

Read more about Zimmer Biomet here.

How to Find More of the Best Stocks to Buy

You can review all of the companies on our Best Companies to Own list and dig into our methodology, which includes definitions for the key Morningstar metrics included in this article. Those with specific interests can drill down with our Best International Companies to Own, Best Sustainable Companies to Own, and Best Innovative Companies to Own lists, too. And as we outline here, we suggest that you focus your research on the undervalued stocks of the companies on these lists.