The Motley Fool presents a portfolio of five undervalued stocks with potential for long-term shareholder wealth growth. The article highlights stocks suitable for buy-and-hold investment strategies, with stock prices referenced from May 25, 2026.

The article identifies three dividend stocks that Warren Buffett would likely purchase during a market downturn: Johnson & Johnson, McDonald's, and Procter & Gamble. All three are high-quality, recession-resistant companies with strong dividend growth histories. The article suggests these stocks would become attractive buying opportunities at lower valuations during a market crash, aligning with Buffett's investment philosophy of being greedy when others are fearful.

The article examines whether McDonald's represents an undervalued dividend stock opportunity. However, the analysis suggests headwinds for the company, as consumers are dining out less frequently, which poses challenges to McDonald's business performance and dividend sustainability.

McDonald's stock has fallen 20% from February highs due to concerns about slowing consumer spending and weak restaurant traffic, particularly among lower-income families. However, the company continues to deliver record revenue and earnings per share with strong fundamentals, industry-leading margins, and a powerful franchise model. Trading at a P/E ratio of 23 (lowest in nearly two years) with an oversold RSI of 25, analysts see 35% upside potential, with JPMorgan, Evercore, and BTIG maintaining bullish ratings and price targets ranging from $305-$370.

Wendy's is struggling in the U.S. with global sales down 5.5% and U.S. sales down 7.8% in Q1 2026, prompting the company to sign an agreement to open up to 1,000 locations in China over the next decade. While international sales remain a bright spot, investors must remain patient as this multiyear expansion effort unfolds. The stock is trading at a low valuation with a P/E ratio of 9.5.

Beyond Meat continues to struggle with declining sales across all categories and negative operating margins. Despite launching new products like plant-based protein drinks and expanding retail partnerships, the company faces significant headwinds. While CEO Ethan Brown remains optimistic about long-term value, the analyst suggests it's still too early to buy into a potential recovery.

Rising gas prices are straining lower-income consumers' budgets, forcing them to cut spending. McDonald's, despite value positioning, shows cracks as CEO warns of deteriorating economic conditions. Dollar General lacks a trade-down option for its rural customer base, causing spending to halt entirely during economic stress. JetBlue Airways faces widening losses due to high fuel costs and lack of hedging protection, similar to Spirit Airlines which recently folded.

McDonald's and Clorox are on track to become Dividend Kings (50+ consecutive years of dividend increases) next year. McDonald's is recommended as the safer choice for risk-averse investors due to its reliable business model, strong margins, and sustainable dividend. Clorox offers higher yield (5.38%) and lower valuation but faces turnaround challenges from pandemic missteps, cyberattacks, and competitive pressures. The article suggests a 50/50 split between both stocks for balanced investors.

Capital One's Q1 earnings miss and surging loan-loss provisions signal growing financial strain among average consumers. While tech companies and affluent-focused firms like American Express remain strong, rising credit card delinquencies, missed earnings at Papa John's and McDonald's, and record consumer debt levels suggest the broader economy may be weakening as the 'K'-shaped economy widens.

US stocks hit record highs as oil prices fall below $100 on hopes of a US-Iran peace deal that could normalize crude supplies and reopen the Strait of Hormuz. The S&P 500 reached 7,384 with RSI in overbought territory, suggesting potential consolidation ahead. Labor market remains resilient with jobless claims at 200,000, though hiring is expected to slow. Mixed corporate earnings: McDonald's beat expectations while Snap and Shake Shack disappointed.

The S&P 500 rallied to an all-time high on May 7, 2026, climbing 1.46% to 7,365.12 as investors responded positively to reports of potential U.S.-Iran peace negotiations. Oil prices fell sharply on de-escalation hopes, boosting equities. Polymarket traders are leaning bullish for Thursday's opening, with strong corporate earnings and AI momentum supporting the rally. President Trump cautioned that no agreement has been finalized.

May marks Shareholder Meeting Month with major corporations holding Annual General Meetings across sectors including Consumer Staples, Industrials, Financials, Tech, and Energy. Key topics include consumer spending resilience, AI strategy, energy production amid geopolitical tensions, and economic health. Notable meetings include PepsiCo, Southwest Airlines, AMD, Intel, JPMorgan, Citigroup, Amazon, McDonald's, Exxon Mobil, Chevron, and Salesforce, offering investors forward-looking insights beyond quarterly earnings.