The S&P 500 continues to push new highs, driven largely by a concentrated group of mega-cap technology names. Microsoft (MSFT), NVIDIA (NVDA), Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Broadcom (AVGO), and Alphabet (GOOGL) together account for more than a quarter of the index’s total weight. Their dominance has fueled strong index-level returns – but also led to stretched valuation multiples across the broader market.
As of June 2025, the S&P 500’s trailing price-to-earnings ratio is hovering around 24x-28x, depending on the source, well above its long-term average of roughly 16x to 18x. Other valuation metrics tell a similar story:
- Price-to-Sales and Price-to-Book ratios for the index are elevated.
- Earnings yields (the inverse of the P/E ratio) have compressed relative to bond yields, reducing the equity risk premium.
- Market concentration remains high, with the top 10 names accounting for over 30% of the index.
While these valuation levels don’t necessarily signal an imminent crash, they suggest the broader index may offer lower forward returns than historical norms. This is where value investors should take note: high valuations across the index don’t mean high valuations everywhere.
The Value Set Within the S&P 500
Yet beneath this tech-driven surface lies a different story.
Dig a little deeper into the index, and you’ll find a set of stocks that are anything but expensive. Using Validea’s investment strategy models – each inspired by the approaches of legendary investors like Warren Buffett, Peter Lynch, and Benjamin Graham – we’ve identified several S&P 500 constituents that score well across value-focused models and are objectively cheap based on multiple valuation ratios.
Here are eight S&P 500 stocks that pass multiple guru strategies and rank among the most attractively priced in the index:
| Ticker | Company | P/E | P/S | P/B | P/CF | LT EPS Growth | Yield | Value Percentile |
|---|---|---|---|---|---|---|---|---|
| PHM | PulteGroup | 7.1 | 1.1 | 1.6 | 6.6 | 25.2% | 0.8% | 5% |
| UAL | United Airlines | 7.7 | 0.5 | 2.2 | 4.2 | – | 0.0% | 3% |
| LEN | Lennar Corp | 7.9 | 0.8 | 1.3 | 7.3 | 10.8% | 1.8% | 4% |
| SYF | Synchrony Financial | 8.1 | 1.2 | 1.5 | 6.7 | 16.3% | 1.8% | 4% |
| GM | General Motors | 6.8 | 0.2 | 0.7 | 2.6 | 7.3% | 1.0% | 1% |
| CMCSA | Comcast | 8.5 | 1.1 | 1.5 | 4.3 | 12.3% | 3.6% | 5% |
| CNC | Centene Corp | 8.2 | 0.2 | 1.0 | 5.8 | 26.9% | 0.0% | 4% |
| F | Ford Motor Co | 8.2 | 0.2 | 1.0 | 3.3 | 39.8% | 5.9% | 4% |
These companies span sectors – consumer discretionary, industrials, financials, healthcare, and communication services – but they share a common thread: they’re cheap, most of them profitable, and they’re growing (or will likely see strong growth once the economy starts to expand).
A Closer Look at the Standouts
- Homebuilders PulteGroup (PHM) and Lennar (LEN): Despite rising interest rates, these companies continue to post strong earnings and revenue growth, supported by structural housing shortages across the U.S. (PHM Guru Analysis & Factor Report) (LEN Guru Analysis & Factor Report)
- Automakers General Motors (GM) and Ford (F): Both trade at less than 10x earnings and under 1x book value, despite ongoing investments in EVs and autonomous technology. (GM Guru Analysis & Factor Report) (F Guru Analysis & Factor Report)
- United Airlines (UAL): While not for the faint of heart, UAL represents a deep cyclical play on travel demand, with a valuation that suggests most of the risk is already priced in. (UAL Guru Analysis & Factor Report)
- Synchrony Financial (SYF): This consumer finance firm offers double-digit growth, a modest dividend, and valuation multiples near recessionary lows. (SYF Guru Analysis & Factor Report)
- Centene (CNC): In a highly regulated but growing sector, Centene’s valuation stands in sharp contrast to its long-term growth potential and market leadership in managed care. (CNC Guru Analysis & Factor Report)
- Comcast (CMCSA): Trading near multi-year lows, Comcast blends broadband stability with entertainment assets—at a valuation that suggests investor expectations are near rock bottom. (CMCSA Guru Analysis & Factor Report)
The Case for Selective Value
What ties these stocks together isn’t just low valuation – it’s also validation from fundamental models based on real-world investing success. At Validea, we use multiple quantitative models that simulate how the world’s best investors might analyze stocks. These models focus on earnings strength, free cash flow, balance sheet health, and price action relative to fundamentals.
In a market environment where the overall index may be expensive, owning cheap stocks that are profitable and growing could offer a margin of safety and upside that the index may lack at these extended valuation levels.
Final Thoughts
The S&P 500 may be expensive, but not every stock in the index deserves that label. Value remains – if you know where to look.
For investors willing to look beyond the index darlings, these names offer a compelling starting point. They’re cheap, fundamentally sound, and often overlooked. And in a market where the next decade’s returns may fall short of the last, owning businesses like these could make a difference.
Further Research
Looking to dive deeper into value investing opportunities and stock analysis? Explore these Validea tools and resources:
- Validea Guru Stock Screener – Find fundamentally attractive stocks across multiple valuation metrics.
- Validea Guru Analysis – In-depth analysis using strategies inspired by Buffett, Graham, Lynch, and other investing greats.
- Top S&P 500 Stocks Based on Guru Scores – See which S&P 500 names rank highest across our composite guru models.
- Model Stock Portfolios – View real-time portfolios based on individual guru strategies.
- Investment Education & Videos – Short videos explaining valuation metrics, investment philosophies, and how to use our tools.
