Despite volatility earlier in early 2025, growth stocks have outperformed value ones this year, Margaret Giles, senior editor of content development at Morningstar, wrote in a blog post last week.
The Morningstar US Growth Index has outperformed Morningstar US Value Index by around 10 percentage points this year. Although value stocks have had more consistent returns so far in 2025, growth stocks had still managed to come out ahead through the first week of November.
Where do value stocks stand today?
“As the artificial intelligence arms race and buildout boom accelerated this year, Morningstar’s equity research team has incorporated these faster growth rates into its forecasts and increased valuations where warranted,” the firm’s chief U.S. economist David Sekera said in the post. “Nowhere have valuations increased as much as in those mega-cap growth stocks that are directly tied to AI.”
Sekera noted that at present, value stocks are undervalued and are attractive on a price-to-fair-value basis, while growth stocks remain at a modest premium over Morningstar’s valuations.
Morningstar analysts have compiled a list of the best value stocks to buy for the long term. These land in the value portion of the Morningstar style box.
The stocks are from companies Morningstar includes on its list of the best companies to own for 2025. These have wide economic moat ratings and predictable cash flows, and are run by management teams that make smart capital-allocation decisions.
And the best value stocks are cheap, which means they are trading below Morningstar’s fair value estimates.
See the gallery for the 10 best value stocks to buy for the long term, according to Morningstar. Year-to-date returns are as of Nov. 13.
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