The 3 Most Undervalued Dow Stocks to Buy in April 2024

Though signs suggest the current state of the stock market is both overbought and overvalued, not all stocks move equally. With April acting as a gradual correction of the market, it may seem like a dicey time to buy. 

However, it’s important to remember that the market is defined by several indices, such as the S&P 500 and the Dow Jones Industrial Average (DJIA). The latter of which consists of 30 exceptionally impactful U.S. companies, which perform and achieve valuation independently of each other. For the index, the most undervalued Dow stocks to buy in April may be surprising compared to the general market trend.

To determine the three most undervalued stocks on the DJIA, investors should look for healthy price-to-earnings ratios (P/E) and increasing revenues. As such, here are the Dow stocks to keep an eye on for an undervalued entry price.

American Express (AXP)

Source: First Class Photography / Shutterstock.com

With genuine success in 2023, American Express (NYSE:AXP) currently sits towards the top of the Dow 30. Currently trading around $226 per share, the credit card giant might seem close to its limit, but consistent performance suggests it still has room to grow.

AXP exceeded expectations last year with $61 billion in annual revenue. This jump represented a 15% increase year-over-year and contributed to a net income of over $8 billion. With EPS of $2.62 and a P/E ratio well below the recommended 25, AXP continues to impress. Moreover, in the past two years, the company has brought on over 25 million new cardholders. 

Best of all, AXP intends to raise dividend yield by $0.70 per share, which represents an increase of 17%. Investors should not pass up AXP, as it will likely continue to expand customers as the economy squeezes consumers.

Walt Disney (DIS)

Source: chrisdorney / Shutterstock

During the last few years, Walt Disney (NYSE:DIS) has seen its share of ups and downs. From flopping superhero movies to heavy political polarization, the company’s reputation as America’s beacon of entertainment has faltered. However, with a little Disney magic, this stock has been on a revival trend since late 2023.

Currently, Disney intends to achieve streaming profitability by Q4 of fiscal 2024 with its direct-to-consumer platforms of Disney+ and ESPN+. For Disney, ESPN has proven especially lucrative thanks to ad sales growth and a corner on the sports streaming market. Moreover, the company’s famous parks have recovered from pandemic-era uncertainty and earned an extra 10% in operating income. Yet, Disney has not been complacent with this growth and will invest $30 billion over the next 10 years in its parks. 

Though the P/E ratio currently remains high, around 75, DIS’s share price of $119 sits significantly below 2021 levels. For investors with the nerve for a long-term hold, Disney could deliver generous returns.

3M (MMM)

Source: JPstock / Shutterstock.com

With a massive healthcare spinoff landing this month, and strict financial management, 3M (NYSE:MMM) is poised for a comeback. With revenue reaching $8 billion for Q4, 2023, the company beat guidance, despite decreasing demand in China for disposable respirators. 

Moreover, after struggling with significant debt, the company upped free cash flow to $6.3 billion for the year, exceeding expectations. This allowed 3M to cut its debts by $2 billion and increase both its margins and earnings per share. Alongside its financial recovery plan, 3M is making new investments in hydrogen electrolysis technology and anti-counterfeiting applications.

With a budding hydrogen industry increasing demand for electrolyzer production, 3M’s moves may support further value growth. In the realm of anti-counterfeiting, 3M could increase its product reputation and sales by intercepting fakes of its proprietary adhesives. These factors make 3M one of the most undervalued Dow stocks to buy in April.

On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.

msn.com