Many investors have kicked value stocks to the curb in the new bull market. That's not surprising considering the jaw-dropping gains that several large-cap growth stocks have generated.
However, value stocks typically beat growth stocks over the long term. And some value stocks will be bigger winners than others. I predict that these could be the best-performing value stocks through 2030.
1. Alibaba Group
Most investors would probably view Alibaba Group (BABA +2.61%) as a growth stock. After all, the company is a technology giant focusing on exciting areas including e-commerce, cloud services, and artificial intelligence (AI). But there's a strong case that Alibaba is also a value stock.
NYSE: BABA
Key Data Points
Alibaba's shares have plunged almost 60% below the highs set in late 2020. The beaten-down stock now trades at only 8.3 times forward earnings. That's indisputably value territory, in my book.
What's the main reason for Alibaba's dismal performance and dirt cheap valuation? The sluggish Chinese economy. The once fast-growing company saw revenue rise by only 5% year over year in the fourth quarter of 2023 with adjusted earnings declining by 2%.
Don't count Alibaba out, though. The company is investing in initiatives to boost growth. AI should serve as a major tailwind for its cloud platform.
I'm not the only one bullish about Alibaba. Of the 48 analysts surveyed by LSEG in March who cover the stock, all but one recommended it as a buy or a strong buy.
2. Enterprise Products Partners
Enterprise Products Partners' (EPD 0.45%) forward earnings multiple is below 10.6x. That's a bargain compared to the valuations for the S&P 500 and the energy sector as a whole.
NYSE: EPD
Key Data Points
I think Enterprise Products Partners has a key advantage that could help make it a big winner over the next six years. The midstream energy provider's distribution yield tops 7.1%. Enterprise won't need huge unit price appreciation (limited partnerships like Enterprise have units instead of shares) to deliver exceptional total returns.
Solid price appreciation could be in store for Enterprise, though. The demand for the company's pipelines and other midstream assets is likely to increase in the coming years, especially if an oil supply shortage arrives in late 2025 as Occidental CEO Vicki Hollub predicts.
Even if the oil and gas industry hits a rough patch, Enterprise Products Partners should be in good shape. The company has a long history of generating strong returns on invested capital regardless of the swings in commodity prices.
3. Pfizer
Pfizer (PFE 0.77%) is in the same boat as Enterprise Products Partners in one sense. The drugmaker doesn't need to deliver big share price gains to generate market-beating total returns thanks to its dividend yield of more than 5.9%.
NYSE: PFE
Key Data Points
This big pharma stock isn't as cheap as Alibaba and Enterprise based on forward earnings multiples. However, Pfizer is a steal compared to several of its peers. I also think the current negative sentiment for the stock is way overdone.
Sure, Pfizer faces some challenges. Its COVID-19 sales continue to plummet. Several of the company's top-selling products will lose patent exclusivity in the next few years, including blood thinner Eliquis, breast cancer drug Ibrance, and rare-disease drug Vyndaqel.
That doesn't tell the full story, though. Pfizer has multiple new drugs and new indications for existing drugs that it expects to generate enough annual revenue by 2030 to more than offset any losses from patent expirations. The company also projects an additional $25 billion in new annual revenue by 2030 from business development deals.
