Volatility is once again roiling the market as we enter 2023's final quarter, and investors now get an opportunity to capitalize by pouncing on high-quality companies that got hit with valuation pressures.

With that in mind, two Motley Fool contributors identified discounted stocks that could deliver big wins over the long term. Here's why they think taking a buy-and-hold approach to these two companies at today's prices will be a path to scoring stellar long-term returns.

Realty Income is down but hardly out

Marc Rapport: Realty Income (O 0.17%) has seen its share price plummet by more than 20% this year as high interest rates and recession jitters hammered valuations in commercial real estate. The stock now trades down 37% from its high.

As one of the largest owners of retail property in the country, this real estate investment trust (REIT) is hardly immune to these headwinds, but it may also have been overly punished by the ongoing sell-off in this sector. Marketed as "The Monthly Dividend Company," Realty Income has made 639 such payments without fail since its founding, and it has increased the payout 122 times since going public in 1994. Meanwhile, it's steadily grown its portfolio to more than 13,000 net-lease properties, the bulk of which are leased to investment-grade and blue chip tenants.

Realty Income's managers have also maintained an investment-grade balance sheet themselves, with the liquidity and heft to maneuver the rising cost of capital while continuing to grow their holdings and their payouts. A battered share price of about $49 has pushed the yield to around 6.3%. For income and growth, this might be a propitious time to take a stake in this accomplished dividend machine.

Little-known fintech StoneCo could post stellar returns

Keith Noonan: While the broader market saw some rebound this year, many fintech stocks continue to trade at dramatic discounts compared to highs reached in recent years. For example, U.S.-based payment services leader PayPal's share price is down 81% from its peak, despite the company posting encouraging business performance in recent quarters. While PayPal presents attractive value at current prices, I believe there's another play in the fintech space with the potential to deliver even better returns.

StoneCo (STNE 0.95%) is a leading provider of payment processing services in Brazil, and it looks poised to benefit from the growing adoption of fintech technologies and e-commerce in Latin America's most populous country.

Despite strong business performance and a resurgent bullish momentum for the stock market this year, StoneCo stock is trading up just 7% so far in 2023. Even with the gains, the company's share price is down 89% from the lifetime high that it hit early in 2021.

For investors with above-average risk tolerance, I think the fintech player presents an attractive risk-reward profile at current valuation levels:

STNE PE Ratio (Forward) Chart

STNE PE Ratio (Forward) data by YCharts.

StoneCo is currently trading at just 13 times this year's expected earnings and 1.4 times expected sales. While economic volatility in Brazil means there are extra risk factors to consider, the company's current valuation looks quite cheap when viewed in conjunction with its recent business performance.

Revenue climbed roughly 28% year over year in the second quarter to reach 2.95 billion Brazilian reals -- or roughly $570.1 million based on today's exchange rate. Meanwhile, non-GAAP (adjusted) net income skyrocketed roughly 477% annually to hit 322 million reals -- working out to $62.3 million based on current exchange rates. The company's adjusted net income margin also expanded to 10.9% in the quarter -- up from 8.7% in the prior-year period.

With StoneCo still growing sales at a robust clip and improving its margins, shares look attractively valued right now. Macroeconomic fluctuations could spur volatility for the stock, but shares present an attractive risk-reward profile at today's prices.

Realty Income and StoneCo look like long-term winners

Realty Income and StoneCo are two very different companies with two very different investment profiles. Depending on your portfolio goals or personal assessment of each company, one may stand out as a better fit for you.

On the other hand, both companies have compelling strengths and present worthwhile investment opportunities at current prices. If you're seeking attractively valued stocks that can play balanced roles in a diversified portfolio, putting money behind both companies could be a smart move right now.