2 Great Stocks With Powerful Brands Trading at Attractive Prices
The stocks of these iconic companies look undervalued today.
Susan Dziubinski: Hi. I’m Susan Dziubinski, co-host of The Morning Filter podcast. On a recent episode, Morningstar’s chief US market strategist, Dave Sekera, talked about several undervalued stocks he liked of companies with winning brands. You can find a link to the episode below this video.
Today we’re adding two more stocks to the list. The stocks of both of these companies with popular brands are trading below what Morningstar thinks they’re worth.
2 Great Stocks With Powerful Brands Trading at Attractive Prices
Our first great stock with powerful brands trading at an attractive price is Kimberly-Clark KMB. With a portfolio that includes Huggies, Pull-Ups, Kotex, Depend, Kleenex, and Cottonelle, we think the company has carved out a narrow economic moat. Kimberly-Clark is taking some bold actions to position itself for long-term growth, which includes spinning off its international tissue business into a joint venture and acquiring Kenvue. These moves should pivot the portfolio more toward the faster-growing and higher margin personal care aisle, but there could be integration and potential litigation risks ahead. Kimberly-Clark’s stock trades well below our $133 fair value estimate.
Read Morningstar’s full report on Kimberly-Clark.
Our second great stock with a powerful brand is Domino’s Pizza DPZ. Interestingly, Berkshire Hathaway BRK.A BRK.B has been building a position in the stock since the third quarter of 2024 and owns about 9% of the company. Domino’s continues to stand out among its pizza peers, thanks largely to its unrelenting focus on value and strong menu innovation. As the world’s largest pizza operator, we think the company has carved out a wide economic moat, and we think the company has ample room to grow over the next decade. We assign the stock a fair value estimate of $436.
Read Morningstar’s full report on Domino’s Pizza.
For more stock ideas, be sure to tune into The Morning Filter each week, wherever you get your podcasts. And visit Morningstar.com, too.
Morningstar director Erin Lash and analyst Ari Felhandler provided the research behind this segment.
Watch 3 Core Stocks to Scale Back On for more from Susan Dziubinski.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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