Investors have suffered through a painful market downturn, with the S&P 500 index down 19.3% year to date. But as with every previous sell-off, this too shall pass. While some growth stocks still trade at fair valuations, there are genuine bargains available if you know where to look.

Two value stocks that offer nice growth potential over the long term are Ally Financial (ALLY -0.07%) and Paramount Global (PARA 2.91%) (PARA.A 2.35%). These stocks trade at single-digit price-to-earnings ratios and could deliver amazing returns over the next three years.

1. Ally Financial

Ally Financial is a popular digital-only bank that has posted impressive operating performance. Over the last six years through fiscal 2021, it grew earnings per share four-fold to $8.22, while reaching a high return on equity (ROE) of 20.2% last year. That is nearly double the average ROE of all U.S. banks.  

With Ally's "Do It Right" approach, it has increased its customer base to over 10 million from 6.9 million in 2014. Ally's banking app regularly receives high marks from customers for its customer service, easy-to-use interface, and competitive interest rates.  

Equally important is that Ally Financial has a leadership team that looks out for shareholders, too. Ally has increased the dividend payment to shareholders for seven straight years. The stock offers an above-average yield of 3.3% while paying out only 15% of its earnings per share as dividends.

The high dividend yield and low payout signal a deeply undervalued stock. If the company doubled its payout, the dividend yield would be 6.6%. Management might be gradually moving in that direction, which would allow investors to realize how cheap this stock is trading right now. In January, the company announced a 20% increase in its dividend. 

Given Ally's above-average growth and profitability for a bank stock, it should trade at a higher valuation. The stock currently trades at a price-to-earnings ratio of 4.3 based on this year's consensus earnings estimate. This stock is begging to be bought.

2. Paramount Global

ViacomCBS changed its name to Paramount Global earlier this year, which signifies where the media company sees growth opportunities. While other streaming services have disappointed investors with subscriber growth lately, Paramount+ is doing fantastic. In the first quarter, it added 6.8 million subscribers. Strong growth in subscribers across Paramount+ and Pluto TV drove direct-to-consumer revenue up 82% over the year-ago quarter. 

Management credits this performance to its diversified media approach. It's able to efficiently monetize and market new entertainment releases at the box office, which then fuels subscriber growth as those releases are exclusively made available on Paramount+.

The company's theatrical releases are having a great year so far. Paramount Pictures has seen all five of its major films this year open at No. 1 at the box office, including Top Gun: Maverick, which broke Titanic's (1997) original release as the studio's highest-grossing domestic film in the company's century-long history. 

Management plans to invest over $6 billion on streaming content by 2024, with streaming revenue expected to triple to $9 billion. That would put its global streaming subscribers at over 100 million. 

Paramount is not messing around. Management sees substantial upside for the streaming business over the long term, and they have demonstrated recent box office success and subscriber growth to back it up.

What's more, Paramount Global doesn't have to beat Walt Disney or Netflix in streaming to deliver great returns to shareholders. The stock currently trades at just 9.3 times expected earnings this year. That is a steal for the iconic Hollywood powerhouse. It's no wonder Warren Buffett's Berkshire Hathaway recently bought shares.