The Dow Jones Industrial Average is an index comprised of 30 blue-chip stocks that are meant to serve as a cross-section of the U.S. economy. Owing to its composition of established blue-chip names, the Dow tends to grow at a slower pace than either the benchmark S&P 500 index or the technology-laden Nasdaq index. Thanks to its slower growth, there are currently some pretty attractive undervalued Dow stocks available.

So far in 2024, the Dow is up only 3% compared to a 9% increase in the S&P 500 and an 8% rise in the Nasdaq. The underperformance in the Dow has led to many of its components trading at cheap valuations, making the index prized by value investors who look to buy stocks at low prices in hopes of earning big gains over the long-term. As we progress through the year’s second quarter, let’s take a look at the three most undervalued Dow stocks to buy in May 2024.

Chevron (CVX)

Trading at 14 times future earnings estimates and offering a quarterly dividend yield of 4%, shares of oil major and Dow component Chevron (NYSE:CVX) look undervalued at current levels. CVX stock has only risen 2% in the last year, badly trailing the 25% gain in the benchmark S&P 500 index over the same period. Investors shouldn’t worry that it’s too late to take a position in Chevron stock. There’s still plenty of room for this security to run.

Chevron recently posted mixed first-quarter financial results as its profits declined due to lower margins at its refineries. The company has also been struggling with natural gas prices that have declined 37% this year due to a supply glut caused by warm winter weather around the world. Chevron’s refining business in the U.S. saw earnings plummet by more than 50% to $453 million during Q1. Profits in international refining fell nearly 60%. These challenges are likely to pass in coming months. And CVX stock looks cheap.

Goldman Sachs (GS)

Shares of investment bank Goldman Sachs (NYSE:GS) are experiencing a rebirth after struggling mightily over the last few years. During the past 12 months, GS stock has increased 36%, including a 14% gain so far in 2024. Despite the growth, Goldman Sachs’ stock trades at an affordable price-to-earnings (P/E) ratio of 17. The stock also offers an attractive quarterly dividend payment of $2.75 a share, giving it a healthy yield of 2.5%. This gives GS stock one of the best valuations in the Dow 30 index.

The turnaround in Goldman Sachs’ stock is due to a rebound in trading and deals on Wall Street, as well as the end of its costly but ultimately doomed foray into retail banking. Goldman most recently issued strong Q1 financial results which were lifted by growth in capital markets activities. The bank’s profits increased 28% from a year earlier due to work on initial public offerings (IPOs) and mergers and acquisitions (M&A). Goldman Sachs said it is also benefitting from growth in its wealth management business.

McDonald’s (MCD)

Battered and bruised, shares of McDonald’s (NYSE:MCD) look quite cheap right now. Since the year’s start, MCD stock has fallen nearly 10%. This has the shares trading at 22 times future earnings estimates, which is about average among stocks listed in the S&P 500. A quarterly dividend of $1.67 per share, for a yield of 2.4%, also makes McDonald’s attractive right now. Like a lot of quick service restaurant chains, the Golden Arches has been struggling as consumers pullback on discretionary spending.

As far as undervalued Dow stocks go, the current dip in MCD stock should be viewed as a buying opportunity as it is likely only a matter of time before the company and stock bounce back. The restaurant chain has announced an aggressive growth strategy that’s aimed at reviving its fortunes. Specifically, McDonald’s plans to open 10,000 new restaurant locations and add 100 million members to its loyalty rewards program by 2027. It has also entered into a deal that will see it sell Krispy Kreme doughnuts at its restaurants nationwide in the U.S.

On the date of publication, Joel Baglole 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.