The S&P 500 encompasses more than 500 companies across various industries, many of which operate profitable, established businesses with strong underlying fundamentals that deserve investor attention. This diversity creates attractive opportunities for those willing to conduct thorough research beyond the most popular stocks.
Through Validea’s comprehensive analytical framework, which incorporates 22 different investment methodologies, we’ve identified ten S&P 500 companies with robust fundamental characteristics that appear particularly attractive at current valuations. Our analysis integrates time-tested strategies from legendary investors such as Warren Buffett’s focus on durable competitive advantages and strong capital returns, Peter Lynch’s approach to reasonable valuations relative to growth prospects, and Benjamin Graham’s emphasis on sufficient margin of safety.
While these companies may not capture headlines like major technology firms, they demonstrate excellence in the fundamental factors that drive long-term wealth creation. They generate consistent cash flows, maintain strong balance sheets, possess defensible market positions, and are priced attractively relative to their intrinsic business worth. These characteristics make them well-suited to deliver consistent returns for investors who value fundamental quality and adopt a disciplined, value-focused investment philosophy.
Here are the top 10 most fundamentally sound stocks within the index using our guru models as of July of 2025.
| Ticker | Company Name | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield |
|---|---|---|---|---|---|---|---|---|---|
| PHM | PULTEGROUP INC | $114.27 | $22,903 | 8.1 | 1.3 | 56 | 1.9 | 7.5 | 0.7% |
| RJF | RAYMOND JAMES FINANCIAL INC | $158.40 | $31,958 | 15.3 | 2.0 | 79 | 2.7 | 13.5 | 1.2% |
| MRK | MERCK & CO INC | $83.36 | $209,320 | 12.1 | 3.3 | 28 | 4.3 | 9.5 | 3.8% |
| CVX | CHEVRON CORP | $155.31 | $271,232 | 17.8 | 1.4 | 56 | 1.8 | 8.2 | 4.3% |
| LULU | LULULEMON ATHLETICA INC | $236.51 | $28,345 | 16.0 | 2.6 | 38 | 6.9 | 12.5 | 0.0% |
| XOM | EXXON MOBIL CORP | $115.43 | $497,503 | 15.3 | 1.5 | 57 | 1.9 | 8.5 | 3.4% |
| NVR | NVR INC | $7,632.24 | $22,315 | 15.7 | 2.1 | 48 | 5.7 | 13.9 | 0.0% |
| QCOM | QUALCOMM INC | $157.46 | $170,533 | 16.1 | 4.0 | 36 | 6.3 | 13.4 | 2.2% |
| EIX | EDISON INTERNATIONAL | $51.06 | $19,646 | 7.2 | 1.1 | 30 | 1.3 | 3.4 | 6.2% |
| WFC | WELLS FARGO & CO | $82.55 | $268,633 | 14.8 | 3.3 | 82 | 1.7 | 10.1 | 1.9% |
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