Contrarian Opportunities in the Dow: 5 Undervalued Blue-Chip Stocks for 2026

In the ever-shifting landscape of the stock market, contrarian investing thrives on identifying out-of-favor giants whose fundamentals remain robust despite short-term volatility. As 2026 approaches, several Dow components in the industrial and consumer staples sectors present compelling value opportunities. These stocks-Home Depot, Procter & Gamble, Nike, Salesforce, and UnitedHealth-have faced recent headwinds, but their strong balance sheets, resilient revenue streams, and discounted valuations make them prime candidates for long-term investors willing to bet against the crowd.

1. Home Depot: A Retail Giant at a Discount

Home Depot (HD) has seen its stock price fluctuate in December 2025, closing at $346.35 on December 30, down from a 52-week high of $426.75. While the company's Q4 2024 revenue rose 14.1% year-over-year to $39.7 billion, it has guided for a 3% decline in diluted EPS for fiscal 2025. This bearish EPS outlook has pushed the stock's P/E ratio slightly above its 5-year average of 22.42, creating a valuation gap for investors who recognize the company's durable demand in home improvement and its strong U.S. comparable sales growth of 1.3% in Q4 2024. With a market cap of over $200 billion and a history of navigating economic cycles, Home Depot's current discount offers a compelling entry point for those betting on a rebound in consumer spending.

2. Procter & Gamble: A Consumer Staples Staple at a Historical Bargain

Procter & Gamble (PG) has long been a bellwether for the consumer staples sector, and its December 2025 stock price of $144.74 reflects a P/E ratio of 21.01, 26% below its 10-year average. For fiscal 2025, P&G reported $84.3 billion in net sales, with organic growth of 2% and diluted EPS rising 8% to $6.51. The company's consistent performance, coupled with its low valuation, suggests the market is underappreciating its brand strength and global diversification. With a dividend yield of 2.5% and a fortress-like balance sheet, Procter & Gamble's undervaluation-despite its $250 billion market cap-makes it a standout for income-focused value investors.

3. Nike: A Fashionable Comeback Story

Nike (NKE) has faced a rough patch, with Q4 2025 revenue declining 12% to $11.1 billion and annual EPS dropping from $3.76 in 2024 to $2.17 in 2025. However, the stock's P/E ratio of 32.91 appears inflated relative to its earnings, suggesting the market is pricing in a recovery rather than current performance. Nike's December 2025 closing price of $63.77 trades at a discount to its 52-week high of $90.50, offering a margin of safety for investors who believe in the company's ability to regain market share through product innovation and digital transformation. With a $180 billion market cap and a history of reinvention, Nike's current undervaluation could be a contrarian gem.

4. Salesforce: Cloud Growth at a Discounted Price

Salesforce (CRM) has demonstrated resilience in a competitive SaaS landscape, reporting Q4 FY2025 revenue of $10.0 billion-a 9% increase in constant currency. For fiscal 2025, the company closed with total revenue of $37.9 billion, up 9% year-over-year, while generating operating cash flow of $13.1 billion-a 28% jump. Despite these strong fundamentals, Salesforce's stock has underperformed due to macroeconomic concerns, creating a valuation gap. With a P/E ratio of 25x (as of December 2025) and a projected 7–8% revenue growth for 2026, the company's focus on AI-driven tools like Agentforce and Data Cloud positions it as a high-conviction value play in the tech sector.

5. UnitedHealth: A Healthcare Behemoth at a Fire Sale

UnitedHealth Group (UNH) has been the Dow's worst-performing stock in 2025, with its stock price dropping 35.9% over the past year. As of December 2025, the company trades at a P/E ratio of 17.24, significantly below its 10-year average and the healthcare sector's 20x peer average. Despite a projected 70% decline in Q4 2025 EPS, UnitedHealth's trailing twelve-month revenue of $435.16 billion and $300 billion market cap underscore its dominance in healthcare. With a dividend yield of 0.8% and a strategic pivot toward AI-driven healthcare solutions, the stock's current discount-trading at a 20% discount to its estimated fair value of $657.11-presents a bold contrarian opportunity.

Conclusion: The Power of Contrarian Thinking

The five stocks highlighted above represent a mix of industrial and consumer staples giants that have fallen out of favor with the market. Yet, their strong fundamentals-ranging from Home Depot's durable retail demand to UnitedHealth's healthcare dominance-suggest these companies are poised for a rebound. For value investors, the key lies in identifying the dislocation between short-term sentiment and long-term potential. As the market resets in 2026, these undervalued blue chips could deliver outsized returns for those willing to think contrarian.