Unless you're a short-seller or were heavily invested in energy stocks, 2022 probably wasn't a banner year. All three major U.S. stock indexes plummeted into a bear market and produced their worst single-year returns in 14 years.

But amid this carnage, the Dow Jones Industrial Average (^DJI 0.56%) stood tall. While its 9% decline did represent its worst performance since 2008, it was markedly better than the Nasdaq Composite, which lost a whopping 33% last year. Because the Dow's 30 components have a rich history of profitability, they're just the type of businesses investors turn to when stock market volatility and uncertainty pick up.

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While most Dow components are well off their all-time highs, some are truly screaming values. The following three Dow stocks are, by one valuation standard or another, trading at their cheapest valuation in more than a decade.

Intel

There are multiple ways to measure how inexpensive a company is relative to the broad-market indexes, its peers, and even itself. For semiconductor stock Intel (INTC -2.40%), the valuation metric that really stands out is its price-to-book (P/B) ratio. Intel is currently trading at roughly 8% above its book value. This represents its cheapest valuation, relative to book, since at least the mid-1980s (i.e., as far back as the P/B data I have access to goes).

Of course, there's a very good reason Intel's stock has been clobbered over the past couple of years. To start with, the growing likelihood of a U.S. recession, coupled with ongoing supply chain issues, is hurting most of the company's highly cyclical operating divisions. The company's core segments, which include client computing and data center/artificial intelligence (AI), saw revenue drop 36% and 33%, respectively, during the fourth quarter from the prior-year period.

Additionally, chief rival Advanced Micro Devices has slowly but steadily been chipping away at Intel's market share in personal computers (PCs) and data centers. These are Intel's bread-and-butter cash-flow segments, which allow the company to reinvest in faster-growing initiatives.

Despite these concerns, Intel has laid out a roadmap to improve its operating efficiency and focus more of its attention on the operating segments that matter most. A perfect example is the $20 billion being spent on two manufacturing facilities in Ohio. These chip-production facilities are expected to come online next year and will be a boon to the company's foundry services segment.

Various cost-cutting initiatives laid out by Intel's management team are finding the mark as well. The company anticipates up to $3 billion in cost savings this year, with between $8 billion and $10 billion in annual cost reductions recognized by the end of 2025.

Lastly, Intel's market share losses to AMD aren't as severe as Wall Street would lead you to believe. While AMD certainly has more growth momentum than Intel, the latter retains the lion's share of central processing unit market share in PCs, mobile, and data centers. In other words, Intel's cash cow isn't going away.

Walgreens Boots Alliance

A second Dow Jones Industrial Average stock that's cheaper now than at any point over the past decade is pharmacy chain Walgreens Boots Alliance (WBA 3.69%). While it's very close to its historic low in terms of P/B value, it's the company's forward-year price-to-earnings (P/E) ratio that's jaw-droppingly low. At no point in the previous decade has Walgreens had a forward P/E ratio of less than 8. It's currently below 7, based on Wall Street's fiscal 2024 consensus earnings forecast.

The prevailing reason for Walgreens' low valuation is its lack of growth. Whereas its competition has entered new verticals (e.g., CVS Health acquiring Aetna and entering the insurance industry), Walgreens has predominantly grown horizontally by adding new physical locations.

The other issue for Walgreens Boots Alliance was the COVID-19 pandemic. While most healthcare stocks are naturally defensive, Walgreens proved the exception to this rule. Since most of its sales are derived inside its stores, the lockdowns associated with the pandemic hurt foot traffic and had an adverse impact on the company's sales and profits.

However, Walgreens is years into an operating transformation focused on increasing its organic growth rate, boosting repeat visits, and improving its operating margin. One change being made is an emphasis on digitization. Updates made to the company's supply chain should optimize its inventory levels. Meanwhile, hefty investments in direct-to-consumer sales can emphasize convenience and provide the company with a steady source of double-digit organic sales growth.

Another exciting growth initiative is Walgreens' steady shift to healthcare services. Following a majority investment in VillageMD, the duo is set to open 1,000 full-service, physician-staffed clinics co-located in Walgreens' stores by the end of 2027. As of Nov. 30, 2022, 200 of these clinics were open and enticing repeat visits at the grassroots level.

Walgreens has also been successfully trimming costs. It divested its wholesale drug business to AmerisourceBergen for $6.5 billion and reduced annual operating expenses by north of $2 billion.

At less than 7 times forward-year earnings and with a 5.8% yield, Walgreens offers a very favorable risk-versus-reward.

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Image source: Getty Images.

Johnson & Johnson

The third Dow stock that's cheaper now than at any point for at least a decade is healthcare conglomerate Johnson & Johnson (JNJ 1.49%). Though J&J, as the company is more commonly known, isn't inexpensive on the basis of P/B, its forward P/E ratio of 13.9 is a low-water mark dating back more than a decade, based on year-end P/E values.

Perhaps the biggest headwind facing J&J is the overhang from talc-based baby powder lawsuits. Johnson & Johnson had attempted to create a subsidiary to absorb the liabilities associated with these lawsuits. The plan was then to have this subsidiary seek bankruptcy protection. However, a U.S. appeals court rejected that proposal in late January.

The other "problem," if you want to call it that, is that J&J is a mature (i.e., relatively slow-growing) company and has been passed over by investors wanting outsized returns. With the Nasdaq Composite rocketing out of the gate for the first five weeks of 2023, J&J became a victim of sector rotation.

But among the three historically cheap Dow stocks on this list, J&J arguably has the most rock-solid bounce thesis.

To begin with, it is a structurally sound company. It's one of only two publicly traded companies with the highest possible credit rating (AAA) from Standard & Poor's, a division of S&P Global, and is on track to increase its dividend for a 61st consecutive year next month. On a nominal-dollar basis, J&J's payout is one of the largest in the world.

J&J's operating model is also a well-oiled machine. For more than a decade, the percentage of net sales derived from pharmaceuticals has been climbing. Brand-name drugs offer high margins and faster sales growth rates when compared to medical devices and consumer health products.

But there's balance here. Because brand-name therapeutics have a finite period of sales exclusivity, J&J is constantly reinvesting in its drug development platform and can rely on its medical technologies segment to pick up the slack as the U.S. and global populations age.

In other words, Johnson & Johnson is about as safe of an investment as you'll find in the Dow -- and it's cheaper now than at any point in over a decade.