3 No-Brainer Value Stocks to Buy With $1,000 Right Now

Thanks to the market's recent rally, many stocks have become uncomfortably expensive. Specifically, the S&P 500 is now priced at more than 22 times its past-12-month profits and more than 22 times its 12-month earnings projections. Both are unusually high compared to long-term norms.

Not every ticker has followed suit, however. A handful of stocks are still more than reasonably priced. And, given the backdrop of persistent inflation and a lethargic economy, it might be time to swap out some of your high-flying growth names for a few more value picks.

Here's a look at three of your best value stock prospects to consider jumping into sooner rather than later.

1. PayPal

Payment-technology stock PayPal (PYPL 2.90%) typically isn't a value holding. Because it's a technology name, its business is in (digital payments), and its historic growth rate tended to be high, PayPal shares have been priced at a premium for most of their existence.

The COVID-19 pandemic, however, really rattled investors' way of thinking about -- and pricing -- this stock.

Oh, it didn't start that way. PayPal shares soared in 2020 and into 2021, with the bulk of the world's consumerism suddenly moving mostly online. It was a clear boon for the payment-tech business. But it was also a boon for all the other payment-technology companies fine-tuning their platforms and growing their reach even before the pandemic took hold. PayPal shares are down more than 80% from their 2021 high and still knocking on the door of multi-year lows as investors weigh the strength of this new competition.

But the sellers overshot their target.

That's not to suggest investors should simply dismiss alternative payment-tech names like Block or less direct competitors such as Adyen or even Amazon Pay. Those are threats, to be sure. However, since it's priced at less than 12 times its trailing and 12-month projected per-share earnings, the market's looking right past the fact that PayPal is still this industry's market leader while also ignoring that it's still growing its top and bottom lines. Indeed, the company handled 12% more payment volume in 2023 than it did in 2022, despite the world continuing to ease back into pre-pandemic, in-person consumerism mode.

Investors should recognize this reality in the foreseeable future.

2. Kraft Heinz

It's been a tough past few years for Kraft Heinz (KHC -0.55%), and by extension, for Kraft Heinz shareholders. The stock has lost over 60% of its value since 2017, when it became clear that the 2015 merger of Kraft Foods and H.J. Heinz wasn't working as well as hoped. The two organizations aren't more competitive when working as one, and cost-cutting linked to the pairing has arguably done more harm than good. Even Warren Buffett -- who largely orchestrated the deal -- concedes that the pairing of the two organizations was an expensive flop. What's done is done, though.

The thing is, time eventually heals almost all wounds. Kraft Heinz may finally be on the mend. Last year's sales were up, and perhaps more importantly, profits are up because the food giant is now spending money on the right things. Those things are marketing, technology, and research and development.

The market hasn't seemed to care yet, perhaps unimpressed by the company's lack of past and projected sales revenue growth. Take last quarter's revenue shortfall as an example. Analysts were calling for a top line of $7 billion, but the company only delivered $6.86 billion. Things are slightly more compelling on the earnings front, but only slightly. The company's fourth-quarter bottom line of $0.78 per share topped estimates of $0.77.

Look at the bigger picture, though. While things are slow-moving, CEO Miguel Patricio does seem to be steering this enormous boat in the right direction. The company is modeling a little more sales and profit-margin growth for this year despite the challenging environment, and analysts expect the same. Newcomers can not only jump into this revitalization while the stock's trading at a modest 12.5 times its trailing per-share profits, but also while the well-protected dividend yield stands at 4.4%.

This company isn't just cheese and ketchup, by the way. Kraft Heinz is also parent to familiar brands like Oscar Mayer, Ore-Ida, Philadelphia Cream Cheese, Capri Sun, Maxwell House, and Jell-O, just to name a few. It's got something to sell to everyone.

3. American Express

Last but not least, add credit card outfit American Express (AXP -0.62%) to your list of no-brainer value stocks to buy if you've got $1,000 you know you won't be needing anytime soon.

While it's categorized as a credit card company, the classification doesn't quite do it justice. American Express is better described as an operator of a rewards-based payment network ... a good one. It's so good, in fact, that cardholders are willing to pay up to $695 per year just for access to perks like cash-back on grocery purchases, additional points toward future hotel stays, ride-hailing credits, and discounts on select streaming services. Mastercard and Visa card issuers certainly offer rewards and perks programs of their own. None of them hold a candle, however, to the depth and breadth of American Express's offerings.

This of course changes the dynamic of the company's business model. Whereas Visa and Mastercard simply keep a small piece of every transaction they process, a big chunk of American Express's top line comes in the form of fees. Generally speaking (and perhaps more importantly), this model also means American Express cardholders tend to be more affluent than average and therefore pose less credit risk to the card company itself.

That's why its write-offs remain relatively low, despite plenty of people increasingly feeling the burden of more expensive debt since 2022. This is also why last year's top line improved to the tune of 10% year over year, pushing per-share profits up from 2022's $9.85 to $11.21 in 2023.

This stock rallied of late, reflecting this resiliency. In fact, shares are up nearly 50% from October's low, soaring with the broad market's bullish tide. Even with this big gain, though, American Express is still affordably priced at less than 19 times last year's bottom line and only 16.3 times this year's projected per-share profits.