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20 Affordable S&P 500 Stocks That Can Help Soften Market Slumps

Let’s be honest—investing right now feels a bit like walking a tightrope. After a strong rally in the S&P 500 this past year, a lot of folks are asking: what if the market stumbles? With valuations stretched in many sectors, interest rate moves unclear, and geopolitical jitters still around, it’s easy to get nervous. I’ve seen investors sprinting to cash or gold like they’re the only lifesavers—but often, those moves miss the bigger picture.

There’s a smarter way to prepare your portfolio: lean into undervalued S&P 500 stocks that have historically handled downturns better than their flashier peers. These “cheap” stocks—meaning those with low price-to-earnings (P/E) ratios and solid business fundamentals—aren’t invincible, but they usually fall less and come back faster when markets shake.

Why Cheap Stocks Can Be Your Portfolio’s Safety Net

When the market’s frothy, expensive growth stocks tend to take the hardest hits. We’ve seen this pattern over and over—in the dot-com bust, the 2008 crisis, and the tech selloff in 2022. Stocks priced at 30, 40, or even 100 times earnings leave almost no room for error; any hiccup sends prices tumbling.

Cheap stocks, on the other hand, usually reflect a dose of skepticism baked right in. Their low P/E ratios often mean investors expect slower growth or see some risks. But many of these companies are steady earners—industrials, financials, healthcare—that act like a shock absorber during market corrections. They might not dazzle in a roaring bull market, but when panic hits, they tend to hold up better.

How This List Came Together

“Cheap” doesn’t mean “bad.” I filtered for S&P 500 companies with a forward P/E under 15, positive earnings growth, and solid balance sheets. I also steered clear of companies facing serious existential threats—no value traps or turnaround gambles here. Picking value stocks isn’t just about the price tag; it’s about avoiding the ones that are cheap for a real reason.

20 Cheap S&P 500 Stocks Worth Watching

1. Citigroup (C)
   Forward P/E: ~8
   A global banking giant that’s taken a hit but still profitable. Big banks like Citi have diverse income streams compared to regional rivals.
2. Pfizer (PFE)
   Forward P/E: ~11
   Pharma powerhouse. Sure, COVID vaccine demand has cooled, but the drug pipeline remains promising.
3. General Motors (GM)
   Forward P/E: ~5
   Auto stocks swing with the economy, but GM’s valuation is tough to beat.
4. Ford Motor (F)
   Forward P/E: ~7
   Similar to GM. EV risks exist, but the low price offers some cushion.
5. Verizon Communications (VZ)
   Forward P/E: ~8
   Reliable dividend payer with a business that keeps humming.
6. Walgreens Boots Alliance (WBA)
   Forward P/E: ~6
   Pharmacy retail is a tough gig, but the stock looks harshly undervalued even for modest growth.
7. 3M Company (MMM)
   Forward P/E: ~10
   Litigation clouds the story, but the core business churns out strong cash flow.
8. Intel (INTC)
   Forward P/E: ~14
   Semiconductors face challenges, but Intel’s market share and government support are real positives.
9. Kroger (KR)
   Forward P/E: ~11
   The grocery biz isn’t flashy, but “boring” can be a blessing in market downturns.
10. Bristol-Myers Squibb (BMY)
    Forward P/E: ~8
    Reliable biopharma with steady earnings, despite some pipeline worries.
11. AT&T (T)
    Forward P/E: ~7
    Debt is a concern, but telecom infrastructure remains essential.
12. CVS Health (CVS)
    Forward P/E: ~8
    Combines pharmacy and insurance, undervalued compared to peers.
13. Huntington Bancshares (HBAN)
    Forward P/E: ~9
    A solid regional bank with less exposure than the bigger guys.
14. MetLife (MET)
    Forward P/E: ~8
    Insurance profits tend to be less cyclical, offering stability.
15. Aflac (AFL)
    Forward P/E: ~10
    Supplemental insurance provider with steady, slow growth.
16. Kraft Heinz (KHC)
    Forward P/E: ~11
    Packaged foods tend to hold up well when times get tough.
17. Cardinal Health (CAH)
    Forward P/E: ~11
    Medical supplies company with consistent cash flow.
18. HP Inc. (HPQ)
    Forward P/E: ~9
    Not flashy, but keeps the cash coming even during slow PC cycles.
19. Nucor (NUE)
    Forward P/E: ~12
    Steel is cyclical, but Nucor’s disciplined approach makes it stand out.
20. Pinnacle West Capital (PNW)
    Forward P/E: ~13
    Utility stock with steady, defensive characteristics.

When This Strategy Shines—and When It Doesn’t

From what I’ve seen, holding a basket of these cheaper, solid S&P 500 stocks helps soften losses during bumpy markets. They won’t make you rich overnight, but they cushion the blow and often pay dividends while you wait for a rebound.

That said, there are two big things to remember. First, these stocks usually lag during roaring bull markets when investors are chasing the latest growth story. Think 2021 tech rallies—cheap stocks just didn’t keep up. If you want max returns during euphoria, this isn’t your tool.

Second, “cheap” can sometimes become cheaper for a reason. Value traps are real. When an entire industry faces permanent disruption—like malls in the age of ecommerce—even low valuations don’t help. It’s easy to buy “cheap” and then watch your money sink as the business deteriorates.

What To Keep An Eye On

Before diving in, always ask: why is this stock cheap? Is it a temporary, fixable issue or something more serious? Check debt levels, cash flow, and management’s moves. If dividends get cut or buybacks stop abruptly, it’s a red flag worth digging into.

Also, watch out for sector concentration. Many cheap stocks sit in financials, healthcare, or materials. While they tend to be solid, a sector-specific crisis—like regional banks in early 2023—can still hit your portfolio hard.

Wrapping It Up

Cheap S&P 500 stocks might not grab headlines, but they’ve proven to be great ballast when the markets get rocky. They won’t wipe out losses entirely, but they can make downturns easier to stomach. Just remember: no strategy is foolproof. Keep your portfolio diversified, stay curious about what you own, and don’t chase yield at the expense of quality.

If you want to weather the next market storm with less stress, this list is a good place to start. It’s not a magic bullet, but a practical toolkit. Sometimes, boring really is beautiful.

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