While the market has entered the fourth year of its current bull market run, not every stock has gotten a lift. In fact, there are still some dirt cheap stocks out there. If you've got $1,000 that you are looking to put to work in the market in the new year, let's look at two bargain-basement stocks you can buy right now.
Energy Transfer
At its current valuation, oil and gas pipeline operator Energy Transfer (ET +0.19%) looks dirt cheap. Consider that the stock trades at an enterprise value (EV)-to-EBITDA multiple (the most common way to value pipeline companies) of just 7.5, based on analysts' 2026 estimates. The stock also offers an 8.1% yield. The midstream master limited partnership (MLP) space as a whole traded at an average multiple of 13.7 between 2011 and 2016, making Energy Transfer one of the cheapest stocks in the sector today.
Despite its valuation, Energy Transfer is actually one of the best-positioned companies in the midstream space. The midstream operator has a strong position in the Permian Basin, which is not only the most prolific oil field in the U.S., but also the source of some of the cheapest natural gas. The company has multiple projects to take natural gas away from the Permian and feed it to markets that are seeing high demand for energy stemming from artificial intelligence (AI).
NYSE: ET
Key Data Points
Its biggest projects are the Hugh Brinson Pipeline, which will transport natural gas to markets in Texas, and the Desert Southwest Pipeline, which will bring natural gas to the Arizona and New Mexico markets. Demand is so strong that the company recently announced it will increase capacity on the Desert Southwest Pipeline. It has also signed deals both with utilities as well as directly with data center operators and builders to supply them with natural gas through its pipelines, including Oracle, Cloud Burst, and Fermi.
Energy Transfer's balance sheet is in solid shape, and the company plans to increase its distribution by between 3% and 5% a year moving forward. As such, this bargain stock gives investors both some nice income as well as stock price appreciation upside.
Image source: Getty Images.
Verizon Communications
Another stock in the bargain bin right now is Verizon Communications (VZ +0.31%), which trades at a forward price-to-earnings (P/E) ratio of just 8.5 and has a 6.8% yield. That's a nice discount to rival AT&T, which has a forward P/E above 11 and is growing its revenue at a similar rate.
Besides being cheap, Verizon also has a nice catalyst in front of it in 2026. The company is scheduled to close its acquisition of Frontier Communications (FYBR +0.00%) in the first quarter after a long regulatory process, which will give it a huge opportunity to bundle wireless and broadband services. Verizon has said that its market share in areas served by Frontier is below its company average, which will allow it to cross-sell its wireless services to Frontier customers and be more aggressive with price through bundling once the deal is completed.
NYSE: VZ
Key Data Points
At the same time, new CEO Daniel Schulman has signaled a major strategy shift at the company. After focusing on being the technology leader and raising prices, the company has lost some wireless subscribers, which is one of the main reasons why AT&T's stock has outperformed. Moving forward, Schulman has said the company will be more customer-focused, looking to give customers the best value proposition and customer experience. A major part of this will be bundling, which is why the Frontier deal is so important.
In addition, Verizon is also looking to cut costs as it restructures its operations. The company recently announced more than 13,000 layoffs, reducing its non-union workforce by 20%. It will also convert about 200 company-owned stores to franchises. Verizon is also trying to cash in on the AI infrastructure boom, recently agreeing to build a high-capacity, low-latency fiber network connecting Amazon's AWS data centers with each other.
With a cheap stock, cost cuts, and a big bundling opportunity ahead, Verizon is a solid bargain buy at current levels.
