The S&P 500 index encompasses over 500 companies across numerous industries—many operating profitable, sustainable businesses with strong underlying fundamentals that deserve investor attention. This market dynamic creates potential opportunities for investors willing to conduct thorough research beyond the most popular names.
Validea’s comprehensive screening system, which integrates 22 different investment methodologies, has identified ten S&P 500 companies with strong fundamental characteristics that appear particularly attractive at current valuations. This analytical framework incorporates time-tested principles from legendary investors:
- Warren Buffett’s focus on durable competitive advantages and robust capital returns
- Peter Lynch’s emphasis on reasonable valuations relative to growth
- Benjamin Graham’s insistence on maintaining a margin of safety
While these companies may not capture the same headlines as major tech players, they demonstrate excellence across critical metrics: consistent cash flow generation, strong balance sheets, defensible market positions, and attractive valuations relative to intrinsic worth. These attributes suggest they may deliver solid long-term performance for patient investors focused on fundamental value.
Here are the top 10 most fundamentally sound stocks within the index using our guru models as of April of 2025.
| Ticker | Company Name | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield | Long-Term EPS Growth |
|---|---|---|---|---|---|---|---|---|---|---|
| RJF | RAYMOND JAMES FINANCIAL INC | $145.54 | $29,363 | 14.0 | 1.9 | 74 | 2.4 | 12.4 | 1.3% | 19.1% |
| MRK | MERCK & CO INC | $77.65 | $194,982 | 11.3 | 3.1 | 30 | 4.0 | 8.8 | 4.1% | 30.2% |
| XOM | EXXON MOBIL CORP | $106.07 | $457,162 | 14.0 | 1.4 | 51 | 1.7 | 7.8 | 3.7% | 14.2% |
| NUE | NUCOR CORP | $115.49 | $26,625 | 9.6 | 0.7 | 34 | 1.3 | 6.8 | 10.5% | |
| TMUS | T-MOBILE US INC | $247.49 | $281,011 | 24.1 | 3.4 | 88 | 4.6 | 11.4 | 1.2% | 41.7% |
| LULU | LULULEMON ATHLETICA INC | $282.43 | $33,934 | 19.2 | 3.2 | 44 | 8.3 | 15.0 | 0.0% | 28.0% |
| WSM | WILLIAMS-SONOMA INC | $160.89 | $19,780 | 18.3 | 2.6 | 65 | 9.3 | 14.6 | 1.3% | 18.4% |
| NVR | NVR INC | $7,227.75 | $21,133 | 14.9 | 2.0 | 53 | 5.4 | 13.2 | 0.0% | 15.9% |
| QCOM | QUALCOMM INC | $145.10 | $159,320 | 14.8 | 3.8 | 43 | 5.8 | 12.5 | 2.3% | 18.7% |
| EIX | EDISON INTERNATIONAL | $56.13 | $21,597 | 8.0 | 1.3 | 39 | 1.4 | 3.8 | 5.6% | 17.3% |
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