The 10 Best Companies to Invest in Now

The stock market has seemed mostly impervious this year. Even as the Iran war continued and inflation and interest rates rose, the market focused on the potential in the AI buildout boom. However, concerns about the capital needed to continue funding the AI buildout led to some panic selling in tech stocks and a move from growth to value in recent weeks.

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 that make up 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 Oct. 28, 2026, were:

1. Campbell’s CPB
2. Clorox CLX
3. Yum China YUMC
4. Ferrovial FER
5. RELX RELX
6. Honeywell Aerospace HONA
7. Broadridge BR
8. McCormick & Company MKC
9. Hershey HSY
10. Charles Schwab SCHW

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 Oct. 28, 2026.

Campbell’s

• Morningstar
  Price/Fair Value
  : 0.50
• 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 50% below our fair value estimate of $41.50 per share.

Over the past 10 years, Campbell’s has orchestrated significant change. For one, its core soup lineup now accounts for just 25% of total sales (down from more than 40% in fiscal 2017), while snacks have grown to nearly 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, to solidify its competitive edge. But despite these efforts, sales growth has proved elusive, with organic sales down at a low-single-digit rate over the past three years. Further, margins have languished, with its 12% adjusted operating margin in fiscal 2026 about 500 basis points shy of the average level achieved in the five years preceding the pandemic.

But the firm isn’t sitting still. Management is taking judicious actions to adjust its workforce, enhance procurement practices, and optimize manufacturing and supply chain networks to eliminate inefficiencies, targeting $500 million in annual cost savings by fiscal 2030. This is in addition to nearly $1 billion realized over the past few years through technological improvements and reduced indirect spending. Importantly, we expect these efforts to fund investments in consumer-valued innovation and marketing. As such, we forecast that, on average, 5% of sales will be directed to research, development, and marketing annually (approximately $550 million).

By leveraging technology, data insights, and artificial intelligence, we believe Campbell’s can bring products to market that align with evolving consumer trends, across its legacy mix and recently acquired brands. We’ve seen this manifest in its Goldfish line, which has returned to growth on the heels of packaging and product innovation and improved marketing. Further, we surmise that Rao’s (which Campbell’s acquired in 2024) and its premium sauce lineup are benefiting from Campbell’s financial resources and entrenched retailer relationships; we think more growth is in store. From where we sit, these investments are key to helping ensure its brands keep pace with consumer preferences, underpinning the firm’s intangible assets-based moat.

Read more about The Campbell’s here.

Clorox

• Morningstar Price/Fair Value: 0.56
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Household and Personal Products

Since its inception more than 100 years ago, Clorox has expanded to operate in an array of consumer product categories, including cleaning supplies, laundry care, trash bags, cat litter, charcoal, food dressings, water filtration products, and natural personal care products. This cheap stock looks 44% undervalued and has a fair value estimate of $154 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, we believe Clorox remains committed to long-term investments to maintain its competitive edge.

The pandemic buoyed e-commerce adoption, illuminating the need for Clorox to enhance its digital capabilities. As part of this, management earmarked more than $500 million to accelerate productivity improvements, which we’ve viewed as prudent. With its ERP rollout finally in the rearview, we think Clorox should begin to benefit from improved decision-making, demand planning, and operational efficiencies. We anticipate that a portion of any savings from these efforts will go toward bringing consumer-valued innovation to market and touting its fare to consumers, which strikes us as particularly critical amid 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—nearly $1.2 billion—to research, development, and marketing.

Beyond operating investments, we believe Clorox is set to maintain the mid-40s gross margin that historically characterized the business (up from its low 30s trough in the second quarter of fiscal 2022, when cost inflation ate into profits). Despite the potential hit from tariffs and higher oil-based derivatives stemming from the conflict in the Middle East, we think Clorox will prudently use a combination of cost-saving endeavors, price pack architecture, and surgical price hikes to dull any lasting hit to the margins.

Read more about Clorox here.

Yum China

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

Next on our list of the best stocks to buy is Yum China. 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 $77 per share.

The Chinese restaurant sector continues to face headwinds from the real estate downturn and a lack of economic stimulus, which is weighing on 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 compound annual growth rate 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.

Ferrovial

• Morningstar Price/Fair Value: 0.61
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Engineering and Construction

Ferrovial is a global transportation infrastructure investor, developer, and operator with a strong presence in North American toll roads. The stock is trading at a 39% discount to our fair value estimate of $89 per share.

Ferrovial makes the bulk of its earnings by investing in, designing, building, and operating transport infrastructure. Its primary asset is its stake in the 99-year lease to operate the 407 Express Toll Route that traverses the Greater Toronto area. In recent years, Ferrovial has shifted its portfolio toward North American assets, partly funded by exiting UK airports (Heathrow Airport and AGS), hoping to take advantage of superior asset economics and more lenient regulation than in Europe and a larger pipeline of public/private partnerships. We estimate roughly 87% of Ferrovial’s value is derived from its toll roads, 6% from airports, and the balance from construction businesses.

Rotating assets in its portfolio is key to ongoing shareholder value creation. Ferrovial seeks to sell mature assets, such as its stake in Heathrow Airport, to fund new projects such as New Terminal One at John F. Kennedy International Airport. Ferrovial focuses on greenfield and yellowfield high-complexity concessions in areas with good economic prospects, where it believes it can earn a “pioneer premium” and grow tariffs and traffic ahead of inflation. It prefers to source deals through bilateral negotiations rather than competitive bidding, and it underwrites projects with at least a double-digit post-tax equity internal rate of return. The characteristics it looks for include long-term, back-end-weighted cash flows and the flexibility to set toll rates as it pleases. It believes its operational experience in the space enables it to employ tools such as dynamic pricing to maximize the asset’s value once operational.

Ferrovial operates three construction businesses: Ferrovial Construction (formerly Ferrovial Agroman), Webber, and Budimex, a listed Polish engineering, procurement, and construction firm. They support the concessions business over the entire project lifecycle. Ferrovial Construction explicitly targets 25% of revenue to come from toll roads and airports. For instance, Ferrovial Construction is managing the project management office for JFK’s New Terminal One and providing construction oversight.

Read more about Ferrovial here.

RELX

• Morningstar Price/Fair Value: 0.68
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Specialty Business Services

RELX is a developer of information-based analytics and decision tools designed to support research, risk assessment, legal work, and business operations. This cheap stock looks 32% undervalued and has a 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% of 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 mid-single-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.

Honeywell Aerospace

• Morningstar Price/Fair Value: 0.69
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Aerospace and Defense

Honeywell Aerospace spun out of Honeywell Technologies in mid-2026 to focus on commercial aerospace and defense manufacturing and development. The stock is trading at a 31% discount to our fair value estimate of $256 per share.

Honeywell Aerospace is one of the largest aircraft component and systems suppliers. We think its substantial scale gives it negotiating leverage with aircraft manufacturers, as it provides many systems and can selectively bid on critical components. Given their long service life and the need for recurring overhauls, we see some of Honeywell Aerospace’s components as fitting the razor-and-blade business model, with original equipment sales (sometimes at low or no margins) as the razor and recurring service and parts revenue (often at high margins) as the blades.

Although Honeywell makes turbofan engines like GE, Safran, Pratt & Whitney, and Rolls-Royce, it serves only a small part of the business jet market. In defense, the franchise is concentrated in turboshaft engines for helicopters, which have different performance characteristics than high-thrust commercial engines on larger airframes.

Honeywell Aerospace’s auxiliary power unit franchise, which spans these verticals without equal, does not have quite the same intensity of razor-and-blades aftermarket value as the GE/Pratt/Rolls oligopoly. Nevertheless, of 52,000 commercial, business, and military jets in service, 32,400 have Honeywell APUs. Of the total, 14,800 are GTCP131, and 6,550 are GTCP36. Of the 22,000 business jets in service (large and small), Honeywell Aerospace supplied half of them with its APU, while it supplied only 3,950 with engines—in either the HTF7000 or TFE731 family. All but one of these also runs a Honeywell GTCP36 or RE100 APU. Honeywell’s largest competitor in business jet engines and APUs is Pratt & Whitney Canada, which specializes in smaller turbines.

In defense, the company provides turboshaft engines, power systems, sensors, and specialized communications equipment almost exclusively to government agencies. We expect a flattening rather than a decline in the budgetary environment, as heightened geopolitical tensions are likely to buoy spending despite adding to the federal debt burden. For these reasons, and in addition to existing backlogs, we think Honeywell Aerospace’s businesses can continue to grow despite a potentially slower overall macro environment.

Read more about Honeywell Aerospace here.

Broadridge

• Morningstar Price/Fair Value: 0.71
• 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 29% discount to our fair value estimate of $250 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 here.

McCormick & Company

• Morningstar Price/Fair Value: 0.71
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Standard
• Industry: Packaged Foods

In its 135-plus-year history, McCormick has become the leading global manufacturer of spices, herbs, extracts, seasonings, and other flavorings. The stock is trading at a 29% discount to our fair value estimate of $65 per share.

While McCormick is the dominant player in the $17.5 billion global spices and herbs market—with about a 17% share, nearly 4 times the next-largest branded operator (per Euromonitor)—it hasn’t escaped macro and competitive challenges. We don’t think the combination with Unilever’s food brands (primarily Knorr cooking aids and Hellmann’s mayonnaise) negates these headwinds. Instead, we think the massive deal, which stands to more than double McCormick’s sales base to around $20 billion, brings significant integration risk. However, we’re encouraged that Unilever intends to own around 10% of shares outstanding while maintaining board and executive leadership representation, which we think could facilitate a more seamless combination.

Management aims to extract $600 million in efficiencies within three years after the mid-2027 deal close, which we find feasible at just 4% of the combined firm’s cost of goods sold and operating expenses. However, we think a portion of any savings realized will be reinvested in product innovation and marketing support. We expect McCormick to ultimately allocate 7% of sales toward research, development, and marketing in the long term. Even so, we foresee margin expansion, given that Unilever’s food arm generates mid- to high-40s gross margins and low-20s operating margins. We forecast low 20s operating margins for the company in aggregate.

Further, we don’t think the tie-up will diminish the benefits afforded by the interplay between McCormick’s consumer segment and flavor solutions segment (which serves restaurants and other packaged food and beverage manufacturers). We see opportunities to expand distribution for each across channels (including in front- and back-of-house foodservice) and geographies (with Unilever offering an enhanced emerging-market platform to complement McCormick’s North American reach). As such, we believe the company can drive profitable sales growth with consumer product manufacturers and restaurants by leveraging its strengths as an operator across both realms to combat sluggish consumer spending and traffic trends.

Read more about McCormick & Company here.

Hershey

• Morningstar Price/Fair Value: 0.71
• Morningstar Uncertainty Rating: Low
• Morningstar Capital Allocation Rating: Standard
• Industry: Confectioners

Hershey is a leading US confectionery manufacturer (in a $55 billion market, according to Euromonitor), controlling more than 35% of the domestic chocolate aisle. This cheap stock looks 29% undervalued and has a fair value estimate of $230 per share.

Under CEO Kirk Tanner (who took the helm in August 2025), Hershey has been intently focused on bringing consumer-valued innovation to the shelf to drive its next leg of growth. Beyond flavor enhancements, it is also revamping pack sizes (including shifting to stand-up bags and alternative sizes) to ensure its wares are stocked where consumers shop.

Hershey continues to face volatile cocoa costs amid mounting constraints on consumer spending—but we don’t surmise seismic change is necessary to steady its ship. For one, even as sugar and cocoa inflation dampened gross margins by more than 600 basis points in fiscal 2025, cost pressures have begun to abate (which should benefit Hershey more in fiscal 2027, as it has already locked in supply for fiscal 2026). Moreover, we’ve held that Hershey has been prudently raising prices, altering packaging, and extracting inefficiencies to blunt the hit. We acknowledge that value-conscious consumers’ near-term hankering for confections may sour (given the product’s more discretionary bent). However, we don’t think Hershey’s leading position (with more than one-third share of the US chocolate aisle versus just low-single-digit share for lower-priced private-label offerings) is poised to be tarnished, particularly as 75% of its everyday portfolio is priced under $4.

To maintain its edge, Hershey has been expanding its capacity, enhancing its digital capabilities, and refining its supply chain, with capital expenditures averaging nearly 6% of sales between fiscal 2020 and 2024, 160 basis points above the average level we forecast (as the heavy lifting is in the rearview). Further, we don’t expect it to siphon brand spending. Although its innovation pipeline was a bit scant in fiscal 2023, we surmise that Hershey has more recently been bringing new products to market aligned with evolving consumer trends (such as Reese’s Caramel, Shaq-a-licious gummies, and Reese’s Oreo) to entrench its standing with retailers and consumers. We expect this investment will persist, as we forecast that Hershey will direct around 6.5% of sales ($960 million) to research, development, and marketing each year over our explicit forecast period.

Read more about Hershey here.

Charles Schwab

• Morningstar Price/Fair Value: 0.72
• Morningstar Uncertainty Rating: Medium
• Morningstar Capital Allocation Rating: Exemplary
• Industry: Capital Markets

Capital markets company Charles Schwab rounds out our list of best stocks to buy. Charles Schwab is one of the largest retail-oriented financial-services companies in the US, with $11.9 trillion in client assets across its brokerage, banking, asset management, custody, financial advisory, and wealth management businesses at the end of 2025. The stock is 28% undervalued relative to our fair value estimate of $123 per share.

Charles Schwab’s strategy rests on three pillars: deepening client relationships, leveraging scale to drive efficiency, and delivering on what the company calls the brilliant basics. We view this as an appropriate approach.

Schwab has done an excellent job over the years in deepening its customer relationships by building a robust, intuitive trading and advisory platform with an ever-expanding menu of services. From its roots as a retail brokerage, Schwab has expanded into mutual fund distribution, proprietary and low-cost asset management products, lending, retirement accounts, and most recently, wealth management. As a result, it has emerged as a premier asset gatherer in the industry, with 5%-6% annual organic net asset growth over the past decade (adjusted for TD Ameritrade), driving its total client assets to $11.9 trillion at the end of 2025.

With Schwab servicing just 40%-45% of customer assets, by our estimates, we see plenty of runway for future growth as it adds in-demand products such as alternative-investment products, cryptocurrency trading, and continues to expand its still-small loan book, encouraging clients to consolidate their financial lives with Schwab. Its attention to the “brilliant basics” affords Schwab the ability to credibly introduce new products and organically increase its scale.

As we see it, increasing scale and reducing cost to serve is critical in a financial-services industry that continues to see fee compression as transparency and the availability of low-cost alternatives increase. Schwab drove its expense/client assets ratio down to just 0.12% during the most recent fiscal year, head and shoulders above the 0.47% and 0.37% average among its online brokerage and wirehouse competitors, respectively (by our calculations). Maintaining its position as a low-cost operator will be essential. The addition of new products allows Schwab to spread investments across a broader base of assets in a way that higher-cost peers simply cannot, entrenching its competitive edge.

Overall, Schwab’s best-in-class efficiency and attractive product suite position the firm well to continue to gain market share in a competitive financial-services industry.

Read more about Charles Schwab 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.