Three Quality Stocks to Buy Now Before They Rally Further

The market has been surging with the S&P 500 climbing 16.25% year-to-date, yet a growing concern hovers over investors: Are stocks getting too expensive? The Shiller CAPE ratio suggests we’re approaching dot-com bubble valuations. But here’s the silver lining—even in pricey markets, disciplined investors can still unearth solid opportunities. Let me walk you through three stocks to buy now that offer real value despite the frothy market backdrop.

PayPal: Undervalued Growth Story Overlooked by the Market

PayPal (NASDAQ: PYPL) has fallen out of favor after years of disappointing performance. The stock has ranged between $50-$100, a far cry from its former glory. Yet at 11.3x projected earnings, it trades like a bank—cheap and unpopular.

What’s changed? CEO Alex Chriss brought fresh energy and a small-business mindset from his Intuit background. The company rolled out Complete Payments, expanded buy-now-pay-later offerings, and recently launched an AI-powered advertising platform. Most intriguingly, PayPal partnered with OpenAI to build an agentic shopping experience—payments becoming more automated and personalized.

The market hasn’t priced this potential in. PayPal continues steady growth with multiple expansion catalysts brewing beneath the surface. At current prices, this represents a smart entry point for contrarian investors.

Citigroup: A Turnaround Candidate Trading at Deep Discounts

Citigroup (NYSE: C) remains one of America’s largest banks, yet it trades at a steep discount to peers. Why? Years of operational bloat and regulatory fines ($400M in 2020, $136M later) dragged returns down—ROTCE limped along in single digits while competitors thrived.

CEO Jane Fraser took charge in 2021 with a mission to rebuild. She’s wound down consumer franchises across 14 countries, shed low-return assets, consolidated bloated operations, and even separated Banamex in Mexico for eventual IPO. The results are tangible: ROTCE improved from 7.4% to 8.9% year-over-year.

Here’s the valuation reality: Citigroup trades at 1.06x tangible book value compared to 2.99x for JPMorgan Chase and 1.88x for Bank of America. With a cleaner balance sheet and streamlined operations, the gap between Citi and its peers looks unjustifiable. This creates a compelling opening for value-conscious investors to buy the discount.

Progressive: An Insurance Bargain With Proven Pricing Power

Progressive (NYSE: PGR) tells a different story. Over 30 years, it delivered a stunning 10,780% total return—16.9% annualized. The auto insurer built dominance through superior underwriting and data-driven telematics adoption, consistently outperforming the industry on combined ratios.

Recently, the environment turned choppy. Rising inflation pressured insurers, forcing Premium hikes to slow. Progressive even announced a $1 billion refund to Florida policyholders after profits exceeded statutory limits. The stock dropped 17% over the past year.

Yet this creates opportunity. At 11.5x earnings—the lowest valuation in recent years—Progressive trades at cyclical lows despite maintaining industry-leading underwriting prowess. The company retains clear pricing power should inflation resurge. This is precisely when disciplined investors should load up on quality assets trading at depressed multiples.

The Bottom Line on These Three Stocks to Buy Now

In today’s elevated market, finding value requires patience and selectivity. Citigroup’s turnaround story, PayPal’s growth reinvention, and Progressive’s undervalued quality offer three compelling stocks to buy now for investors building diversified portfolios. Each operates from a position of strength but trades below intrinsic value—the hallmark of genuine value stocks offering margin of safety in uncertain times.