⭐ 10 High-Quality Stocks Wall Street Says Are “On Sale” for 2026
Big Picture
As the U.S. stock market cools and valuations become more reasonable, high-quality companies with strong fundamentals are starting to look undervalued. Morningstar has identified 10 best-in-class companies—firms with durable competitive advantages, predictable cash flows, and disciplined management—that are now trading well below their estimated fair values.
The key idea here is simple:
Even great companies only become great investments at the right price.
How These Companies Were Selected
Morningstar focused on companies that:
• Have strong economic moats (competitive advantages)
• Generate reliable and predictable cash flows
• Are run by experienced management teams
• Are currently undervalued relative to fair value
This list highlights quality + value, not hype.
The 10 Best Stocks to Buy Now (February 2026)
1. Campbell’s (CPB) – Packaged Foods
• Trading ~55% below fair value
• Shifted from soups to higher-margin snacks
• Strong cost discipline + heavy brand investment
• Defensive, cash-generating business in uncertain times
Lesson: Even “boring” consumer staples can be powerful long-term investments when priced cheaply.
️ 2. Tyler Technologies (TYL) – Government Software
• Trading at a 42% discount
• Dominant provider of software to cities, courts, and schools
• Governments are replacing 20-year-old legacy systems
• Recurring SaaS and transaction revenue growing steadily
Lesson: Quiet monopoly-like businesses often compound wealth silently.
☁️ 3. SAP (SAP) – Enterprise Software
• Trading 37% below fair value
• Global leader in ERP software
• Cloud transformation (RISE & GROW with SAP) gaining traction
• Strong long-term margin and revenue growth outlook
Lesson: Late adopters can still win if they pivot correctly.
4. Zimmer Biomet (ZBH) – Medical Devices
• Trading 34% below fair value
• Global leader in joint replacement surgeries
• Aging populations + robotic surgery = long runway
• High switching costs keep surgeons loyal
Lesson: Demographics matter in long-term investing.
5. Thomson Reuters (TRI) – Business Information & AI
• Trading 34% below fair value
• Strong brands in legal, tax, and compliance services
• Heavy investment in AI tools like CoCounsel
• Clean balance sheet and steady cash flows
Lesson: Data + trust + technology is a powerful combination.
6. Yum China (YUMC) – Restaurants
• Trading 34% below fair value
• Operates KFC, Pizza Hut, and other brands across China
• Massive expansion runway in lower-tier cities
• Strong free cash flow and shareholder returns
Lesson: Market slowdowns often create the best entry points.
7. Clorox (CLX) – Household Products
• Trading 33% below fair value
• Strong brands across cleaning and household essentials
• Investing heavily in innovation and digital capabilities
• Pricing power helps protect margins
Lesson: Brand power is a real economic moat.
8. Broadridge Financial Solutions (BR) – Financial Infrastructure
• Trading 32% below fair value
• Backbone of proxy voting and investor communications
• Highly recurring, regulated revenue streams
• Steady growth with low business risk
Lesson: Infrastructure businesses often fly under the radar—but pay well.
9. Experian (EXPGY) – Credit & Data Services
• Trading 32% below fair value
• One of the global “Big Three” credit bureaus
• Expanding in emerging markets and fintech tools
• Strong long-term demand for credit data
Lesson: Data is the new oil—especially in finance.
10. Sony Group (SONY) – Entertainment & Technology
• Trading 31% below fair value
• Transformed from volatile electronics to content powerhouse
• Strong positions in gaming, music, movies, and image sensors
• Diversified revenue streams reduce risk
Lesson: Reinvention keeps companies relevant—and profitable.
Key Takeaways for Investors
• Quality matters, but price matters just as much
• Many world-class companies are currently undervalued
• Defensive, cash-generating, and infrastructure businesses are standing out
• This is a reminder that patience and fundamentals win over hype
Big Picture
As the U.S. stock market cools and valuations become more reasonable, high-quality companies with strong fundamentals are starting to look undervalued. Morningstar has identified 10 best-in-class companies—firms with durable competitive advantages, predictable cash flows, and disciplined management—that are now trading well below their estimated fair values.
The key idea here is simple:
Even great companies only become great investments at the right price.
How These Companies Were Selected
Morningstar focused on companies that:
• Have strong economic moats (competitive advantages)
• Generate reliable and predictable cash flows
• Are run by experienced management teams
• Are currently undervalued relative to fair value
This list highlights quality + value, not hype.
The 10 Best Stocks to Buy Now (February 2026)
1. Campbell’s (CPB) – Packaged Foods
• Trading ~55% below fair value
• Shifted from soups to higher-margin snacks
• Strong cost discipline + heavy brand investment
• Defensive, cash-generating business in uncertain times
Lesson: Even “boring” consumer staples can be powerful long-term investments when priced cheaply.
️ 2. Tyler Technologies (TYL) – Government Software
• Trading at a 42% discount
• Dominant provider of software to cities, courts, and schools
• Governments are replacing 20-year-old legacy systems
• Recurring SaaS and transaction revenue growing steadily
Lesson: Quiet monopoly-like businesses often compound wealth silently.
☁️ 3. SAP (SAP) – Enterprise Software
• Trading 37% below fair value
• Global leader in ERP software
• Cloud transformation (RISE & GROW with SAP) gaining traction
• Strong long-term margin and revenue growth outlook
Lesson: Late adopters can still win if they pivot correctly.
4. Zimmer Biomet (ZBH) – Medical Devices
• Trading 34% below fair value
• Global leader in joint replacement surgeries
• Aging populations + robotic surgery = long runway
• High switching costs keep surgeons loyal
Lesson: Demographics matter in long-term investing.
5. Thomson Reuters (TRI) – Business Information & AI
• Trading 34% below fair value
• Strong brands in legal, tax, and compliance services
• Heavy investment in AI tools like CoCounsel
• Clean balance sheet and steady cash flows
Lesson: Data + trust + technology is a powerful combination.
6. Yum China (YUMC) – Restaurants
• Trading 34% below fair value
• Operates KFC, Pizza Hut, and other brands across China
• Massive expansion runway in lower-tier cities
• Strong free cash flow and shareholder returns
Lesson: Market slowdowns often create the best entry points.
7. Clorox (CLX) – Household Products
• Trading 33% below fair value
• Strong brands across cleaning and household essentials
• Investing heavily in innovation and digital capabilities
• Pricing power helps protect margins
Lesson: Brand power is a real economic moat.
8. Broadridge Financial Solutions (BR) – Financial Infrastructure
• Trading 32% below fair value
• Backbone of proxy voting and investor communications
• Highly recurring, regulated revenue streams
• Steady growth with low business risk
Lesson: Infrastructure businesses often fly under the radar—but pay well.
9. Experian (EXPGY) – Credit & Data Services
• Trading 32% below fair value
• One of the global “Big Three” credit bureaus
• Expanding in emerging markets and fintech tools
• Strong long-term demand for credit data
Lesson: Data is the new oil—especially in finance.
10. Sony Group (SONY) – Entertainment & Technology
• Trading 31% below fair value
• Transformed from volatile electronics to content powerhouse
• Strong positions in gaming, music, movies, and image sensors
• Diversified revenue streams reduce risk
Lesson: Reinvention keeps companies relevant—and profitable.
Key Takeaways for Investors
• Quality matters, but price matters just as much
• Many world-class companies are currently undervalued
• Defensive, cash-generating, and infrastructure businesses are standing out
• This is a reminder that patience and fundamentals win over hype