A $5,000 investment may not seem like a large amount of money to invest in the stock market. But you can make the most of it by investing for the long haul, and picking modestly valued growth stocks. Doing so can help maximize your returns, and turn that $5,000 into something much larger in the future.
Valuation matters, and so does a company's growth prospects. Three stocks that I believe can give you a good mix of growth and value right now are AbbVie (ABBV +0.06%), Lockheed Martin (LMT 2.25%), and PayPal (PYPL 0.06%). By investing in these underrated growth stocks, you could position yourself for some terrific gains down the road. Here's a closer look at each one of them.
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1. AbbVie
Healthcare company AbbVie makes for a phenomenal investment option as it's not only cheap, but it has some fantastic growth opportunities ahead. The stock may seem expensive at first glance, as it's trading at well over 100 times its trailing earnings. However, its forward price-to-earnings (P/E) multiple, which is based on analyst projections for how strong its earnings will be in the year ahead, is just under 17. Such a disparity can happen when a company has one bad quarter that's weighed down by nonrecurring items.
AbbVie is a cheap stock to own, and with its diverse operations, it's a slam-dunk buy for the long haul. Through the first nine months of the year, the company's top line has risen by 8%, to $44.5 billion. Immunology drugs have accounted for roughly half of that at just under $22 billion, and they have grown at a rate of more than 12%. In addition, the company has neuroscience, oncology, aesthetics, eye care, and other segments, which together give investors a fairly diverse healthcare business to invest in, with many avenues to grow.
NYSE: ABBV
Key Data Points
The stock's 3.3%-yielding dividend sweetens the deal and can help make your $5,000 investment even more valuable by also generating recurring income on it. AbbVie's stock is up 19% this year, and there could be even more gains ahead for long-term investors.
2. Lockheed Martin
Another cheap-looking stock to buy is Lockheed Martin, which trades at a similar forward P/E of 17. That's an attractive valuation for a business that is set to benefit from an increase in government spending on defense and aerospace. Lockheed is known for making fighter jets, including the F-16 Fighting Falcon.
The U.S. government has been taking a stake in multiple companies this year, and one that may be an option is Lockheed Martin. Commerce Secretary Howard Lutnick said the company was "basically an arm of the U.S. government" due to how closely it works with the government.
NYSE: LMT
Key Data Points
Even if the U.S. government doesn't invest in Lockheed Martin, the stock could still be poised for more growth given the valuable role it plays in defense. President Donald Trump may ramp up spending and is in support of a U.S. defense budget that could top $1 trillion for the first time ever.
Through the first nine months of 2025, Lockheed has generated $54.7 billion in sales, which is a modest increase of 4% year over year. There hasn't been much growth thus far, but this is a stock that could benefit significantly from an increase in government spending on defense.
Like AbbVie, Lockheed also offers an attractive dividend that yields 2.8% -- more than double the S&P 500 average of just 1.1%.
3. PayPal
The third cheap stock to consider adding to your portfolio today is PayPal. Despite a recent bump up in value, it's still trading at a forward P/E of only 12, making it the cheapest stock on this list. Its price-to-earnings-growth (PEG) multiple is also less than 1, which indicates that when looking at an even longer period of five years, the stock is an even bigger bargain.
Investors may be skeptical about the company's role in the payments world, as there are a growing number of options to choose from these days. But PayPal still has a name and brand that is highly recognizable around the world. Recently, the stock got a boost on news that it would be the first payment option to be available in OpenAI's ChatGPT. This can allow PayPal users to make purchases right within the artificial intelligence chatbot, which could open up an exciting new growth opportunity for the company.
NASDAQ: PYPL
Key Data Points
PayPal is still generating solid growth, proving that it remains a top option for both customers and merchants when making payments. During the first nine months of the year, PayPal's net revenue rose by nearly 5% year over year to $24.5 billion. And its net income increased at a faster rate of 25%, coming in at $3.8 billion.
The company also recently began paying a dividend. Although it's light and yields just 0.8%, it could help pad your overall returns from hanging onto the stock.
