Finding Attractive Valuations: Three Underrated Companies Worth Your Attention in Today's Market

The investment landscape presents an interesting paradox. The S&P 500 has climbed 16.25% year to date, driven largely by enthusiasm around artificial intelligence and technology infrastructure buildouts. Yet beneath this bullish surface, market valuations have reached levels not seen since the dot-com era, with the cyclically adjusted price-to-earnings (CAPE) ratio signaling stretched prices across the board.

This environment makes it tempting to sit on the sidelines. However, patient investors who dig deeper can uncover opportunities—particularly among best stocks to buy now that trade at meaningful discounts to historical norms and their peers. The following three companies represent precisely this type of opportunity: businesses with fundamental strength, improving operations, and valuations that don’t reflect their potential.

Insurance Excellence Amid Industry Headwinds: Progressive

Progressive (NYSE: PGR) stands out as a three-decade success story, having delivered shareholders a 10,780% total return—equivalent to a 16.9% compound annual growth rate. What underpins this performance is the company’s dominant market positioning as the second-largest auto insurer, coupled with exceptional underwriting discipline measured by industry-leading combined ratios.

The insurer has built its reputation on data-driven decision-making, pioneering telematics adoption years before competitors recognized its value. This technological edge has translated into consistent profitability and pricing discipline.

The current environment presents temporary headwinds. Insurance cycles are cooling, with carriers moderating premium increases following inflationary pressures. Progressive’s recent announcement to return $1 billion to Florida policyholders—because profits exceeded statutory thresholds between 2023 and 2025—highlights the cyclical nature of the business.

This backdrop has pressured the stock down 17% over the past year. Trading at 11.5 times earnings, significantly lower than valuations from recent years, the company offers an attractive entry point for investors believing in mean reversion. Progressive’s pricing power and underwriting expertise position it well should inflation resurface.

Financial Services Transformation: Citigroup’s Value Proposition

Citigroup (NYSE: C), one of America’s largest banking institutions, has historically traded at a considerable discount relative to competitors. The institution grappled with operational complexity stemming from its sprawling global footprint, which contributed to regulatory challenges and multimillion-dollar compliance settlements ($400 million in 2020, $136 million in 2024).

These issues manifested in weak profitability metrics. Return on common tangible equity (ROTCE) languished in the mid-single digits—substantially below industry peers—dragged down by inflated operating expenses, sluggish consumer and international divisions, and underperforming non-core holdings.

CEO Jane Fraser’s tenure since 2021 has centered on operational streamlining and strategic refocus. The bank has systematically exited consumer operations in 14 countries, pruned workforce redundancies, and consolidated functions. Notably, Citigroup spun off Mexico’s Banamex consumer franchise, with IPO plans underway.

These initiatives are yielding tangible results. ROTCE improved to 8.9% this year from 7.4% previously as the organization sheds low-return assets. Priced at 1.06 times tangible book value—substantially below JPMorgan Chase (2.99 P/TBV) and Bank of America (1.88 P/TBV)—Citigroup represents a classic value opportunity. Its improving balance sheet and enhanced operational efficiency suggest the current valuation significantly underprices the stock’s turnaround progress.

Payments Platform at an Inflection Point: PayPal

PayPal (NASDAQ: PYPL) has endured a lengthy period of underperformance following its high-flying valuation days. The payments processor has oscillated between $50 and $100 per share for several years, with the stock recently valued at just 11.3 times projected earnings—a significant discount reflective of depressed growth expectations.

Leadership changes have catalyzed strategic shifts. CEO Alex Chriss, who joined in 2023 after holding executive positions at Intuit, has introduced fresh momentum through several initiatives. The company launched PayPal Complete Payments targeting small and mid-sized enterprises, strengthened e-commerce integrations, and expanded its buy-now-pay-later offerings.

More recent developments signal growth acceleration. PayPal rolled out an advertising platform leveraging its comprehensive payments dataset and partnered with OpenAI to develop an AI-native shopping experience featuring embedded payment functionality. These collaborations aim to transform commerce into a more personalized, automated ecosystem.

While recent performance has disappointed investors, PayPal continues expanding at a steady trajectory. The growth initiatives currently priced into the stock appear conservative relative to their potential impact. As these strategic bets mature, earnings upside could surprise to the benefit of shareholders who position themselves today.

The Case for Value in an Expensive Market

High market valuations need not paralyze investors seeking attractive best stocks to buy now. These three companies—Progressive, Citigroup, and PayPal—demonstrate that disciplined analysis reveals pockets of value. Each confronts specific headwinds; each trades at depressed multiples reflecting pessimism; and each possesses the operational competence and strategic clarity to revalue meaningfully.

Value investing demands patience, but the margin of safety these positions offer makes them worthy of serious consideration for diversified portfolios.