The Dow Jones Industrial Average is an index including 30 of the most prominent publicly-listed American businesses. It is considered broadly representative of the U.S. economy and its overall strength. The firms listed in the Dow 30 are among the very best within their respective sectors. In short, Dow Jones stocks are among the best of the best.

That said, they aren’t infallible and don’t benefit from strong demand all the time. That is the case with the three Dow stocks discussed below. Each is undervalued presently meaning the markets aren’t showing their love. That relative lack of demand creates an opportunity for investors who would be wise to act on lower prices.

Let’s take a look at what makes those three undervalued Dow stocks so interesting at the moment.

McDonald’s (MCD) 

McDonald’s (NYSE:MCD) is one of many stocks currently suffering through a long anticipated pullback in consumer spending. That pullback is part of the broader reason that many consumer-oriented retailers are currently offering discounts, including McDonald’s. Still, despite the pushback regarding pricing, McDonald’s is doing fine.

The company’s first quarter performance was pretty much in line with what was expected by Wall Street. Earnings per share clocked in at $2.70 whereas Wall Street had expected $2.72. The company reported $6.17 billion in revenues, in line with the $6.16 billion expected. Yes, boycotts in the Middle East are hurting the company and yes, consumers are demanding affordability. But there was no surprise from McDonald’s in terms of revenue or earnings.

McDonald’s is working swiftly to address affordability concerns. The company will launch a $5 value meal for a month beginning Jun. 25. It’s also facing pushback from franchisee owners who are not willing to absorb the discount prices. Something tells me McDonald’s is going to win that battle. Something also tells me that the claims regarding pricing were overstated as well. Thus, I expect McDonald’s to rebound creating real returns for investors.

Cisco Systems (CSCO)

Cisco Systems (NASDAQ:CSCO) is usually one of my favorite Dow stock picks for a number of reasons. I like the firm’s secular exposure to networking growth opportunities, especially in light of the emergence of artificial intelligence (AI). I also like it for its stability and relatively high dividend yield of 3.4%. The company hasn’t reduced that dividend since 2011 and it benefits from a very healthy payout ratio of 0.45. There aren’t many other Silicon Valley tech firms that offer such a combination of broad exposure and stability.

Cisco Systems is also a stock that offers deep value as measured by P/E ratio. The company’s current 15.5 P/E ratio is not only lower than its median value over the last decade but also lower than 75% of its competitors. 

Equally importantly, Cisco Systems is undertaking something of a transition as it relates to revenue generation. The company recently closed its Splunk acquisition and that should rapidly shift its revenue mix toward recurring software sales as opposed to one-off hardware sales that have traditionally dominated its business. 

American Express (AXP)

American Express (NYSE:AXP) is one of the three dominant credit card companies. I’d argue that it is the best stock of those three, although each is strong.

The most important reason for that assertion is that American Express has outperformed both Mastercard (NYSE:MA) and Visa (NYSE:V) this year and over the past five years. There are strong reasons to invest in any of them but if forced to pick one, make it American Express.

The company’s earnings report released in mid-April shows just how strong the company is. Earnings increased by 39% during the first quarter on revenues that jumped by 11%.

There’s some irony in American Express’ outperformance over its rivals given that credit card stock has the lowest P/E ratio of the three at 19.5. P/E ratios of the other two are above 30. It’s a strong indication of just how undervalued American Express continues to be relative to its main competition. That’s all the more notable given the company’s target demographic of affluent consumers who are more creditworthy than those of its competitors. 

On the date of publication, Alex Sirois did not have (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.