Investors look at blue-chip stocks for dividends and capital preservation. However, dividend stocks do not always trend higher. There are years or phases of price or time correction due to temporary industry or company-specific headwinds.

For value investors, I see a correction in quality blue-chip stocks as a golden opportunity to accumulate. I am reminded of Charlie Munger’s idea of delayed gratification. It’s difficult to predict the time for a reversal rally. However, when it comes to total returns from these oversold stocks, they can be robust. My focus in this column is on three blue-chip stocks that are likely to make a strong comeback next year.

I must add here that macroeconomic headwinds are likely to be sustained next year. By adding these top blue-chip stocks to the portfolio, investors can reduce the overall portfolio beta. Further, since these stocks already trade at a deep valuation gap, the downside is capped even if the market trends lower.

Let’s talk about the reasons to be positive about these blue-chip ideas.

AT&T (T)

The worst for AT&T (NYSE:T) stock seems to be over with an upside of 6% in the last six months. Of course, the rally has been sluggish but it is an early indication of a potential reversal in stock trend. This was entirely likely with T stock trading at a forward price-earnings ratio of 7. Further, the stock offers an attractive dividend yield of 6.55%.

Besides the valuation, business and financial developments have been positive. The recent collaboration with Ericson will help AT&T open more radio access networks for a better connection through 5G and fiber networks in North America. By 2026, the collaboration is expected to cover 70% of the company’s wireless traffic in the U.S.

From a financial perspective, AT&T reported an operating cash flow of $26.9 billion for the first nine months of 2023. The annualized OCF potential is approximately $36 billion and provides scope for aggressive investments and deleveraging. At the same time, dividends are secure. I must add that with continued growth in 5G and fiber subscribers, the revenue outlook is positive.

Lockheed Martin (LMT)

In a year where global geopolitical tensions escalated, I am surprised that Lockheed Martin (NYSE:LMT) stock has marginally trended lower. This looks like a good opportunity to accumulate and a forward price-to-earnings ratio of 16.4 underscores my view.

As of Q3 2023, Lockheed reported an order backlog of $156 billion. This provides clear revenue and cash flow visibility. The company has guided for a free cash flow of $6.2 billion for the year. As growth potentially accelerates in 2024 and beyond, FCF is likely to swell.

I also like the fact that Lockheed is aggressively investing in next-generation defense technology. This month, the company successfully conducted a JAGM-MR guided flight test which can help missiles to discriminate between multiple targets. Lockheed is also investing in next-generation interceptors to protect against long-range ballistic missile attacks. Investment in technological advancement will ensure that the order backlog remains robust.

Pfizer (PFE)

During the COVID-19 pandemic, the bio-pharmaceutical sector was in the limelight. However, in a post-pandemic world, investors have focused on other sectors where growth seems relatively attractive. As a result, some of the best pharmaceutical stocks are trading at a considerable valuation gap. Pfizer (NYSE:PFE) is one stock that deserves a place in many portfolios and looks poised for a comeback.

An important reason to like Pfizer is a strong pipeline of new products. Through the first half of 2024, the company expects to launch up to 18 new products. Additionally, the long-term pipeline is attractive and Pfizer expects to generate $20 billion in incremental revenue from new molecular entities by 2030.

Further, new business deals are also expected to add an additional revenue of $25 billion by 2030. One such deal is the acquisition of cancer drug maker Seagen (NASDAQ:SGEN) for $43 billion. It’s likely that growth will accelerate in the coming years coupled with strong cash flows. Once the sector is back in focus, PFE stock is likely to surge higher from oversold levels.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.