While investors often overlook the Dow Jones Industrial Average in favor of the S&P 500 and the Nasdaq 100, the Dow comprises some of the highest-quality businesses in the world. The top Dow stocks to buy represent a broad spectrum of industries and are known for their stability, resilience, and potential for steady growth.

Unlike the more volatile tech-heavy indices, the Dow’s components tend to be established firms with strong track records. This makes Dow stocks to buy as an excellent starting point for investors to generate stock ideas, especially those new to the market and looking to put their first few thousand dollars to work.

Given that I already regard most Dow components as high-quality businesses, my criteria for selecting Dow stocks to buy focused on identifying the most attractively priced Dow stocks relative to their growth prospects. With broad indices, including the Dow, having already recorded substantial gains lately, it’s essential to seek out reasonably priced stocks to ensure a decent margin of safety. The following three names offer an excellent blend of value, quality, and growth potential.

McDonald’s (MCD)

In my view, the most compelling investment opportunity amongst the Dow Jones components today is McDonald’s (NYSE:MCD). The most prominent player in the quick-service restaurant space, boasting over 41,000 locations worldwide, has seen its shares decline by about 12.5% in 2024, underperforming the Dow Jones and the overall market. The stock’s decline can be attributed to the market pricing in an affordability crisis, as even fast food seems rather expensive these days, with the cost of food ingredients and labor having surged lately.

While these concerns are valid, McDonald’s operating results remain largely resilient. Despite a modest slowdown, with same-store sales rising by just 1.9% in the company’s most recent Q1 report, this period marked the 13th consecutive quarter of positive same-store sales growth. A short-term halt from McDonald’s usual mid-single-digit growth rates is understandable. If anything, the fact that same-store sales haven’t dipped and continue to grow from already high levels is impressive.

In the meantime, following its recent dip, McDonald’s stock trades at just 21x this year’s expected earnings per share, below its historical average. I think this multiple presents a notable margin of safety and potential for meaningful upside, especially considering Wall Street expects McDonald’s EPS growth to accelerate in the high single digits to low double digits over the medium term.

Johnson & Johnson (JNJ)

Another compelling investment opportunity within the Dow to consider buying following its drop in the past year is Johnson & Johnson (NYSE: JNJ). As one of the largest and most diversified healthcare giants globally, Johnson & Johnson stock rarely trades at a discount. Investors have historically been willing to pay a premium for a stake in the company due to its numerous qualities, including its 49-year dividend growth track record.

Given the legendary reputation Johnson & Johnson has earned among investors, it stands out as an excellent choice, whether you are making your first $1,000 investment or adding another $1,000 to your portfolio. The stock has consistently performed well for decades, and I don’t see this trend changing anytime soon.

Whenever you can buy shares at a discount, as is currently the case with the company trading at a forward price to earnings (P/E) ratio of just 14x, notably below its historical average of around 17x to 18x, it is wise to take advantage of the discount.

In the meantime, Johnson & Johnson’s overall growth remains quite strong. The company increased its adjusted EPS by 12.4% in Q1, while consensus estimates see sustained EPS growth in the mid-single digits over the medium term. Given the company’s tendency to beat analyst estimates, these numbers further expose why the stock’s current valuation is rather attractive.

UnitedHealth Group (UNH)

I will wrap this list with UnitedHealth Group (NYSE:UNH), another laggard within the Dow worth considering. Shares are down roughly 11% in 2024, with UNH stock falling considerably behind its index peers. Still, UNH stock is also a name that rarely trades at a discounted valuation, so any such share price lags are potential opportunities worth examining.

This seems to be the case, with UNH stock now trading at a highly compelling valuation despite its robust growth prospects. In its Q1 results, UNH grew revenues by nearly 9% to $99.8 billion. Its adjusted EPS also grew by a notable 10.4% to $6.91, with the company recording an adjusted operating margin expansion and share repurchases, further aiding the growth of this figure. This top and bottom line growth matches UNH’s historical trends, suggesting sustained growth with no signs of a slowdown.

With UNH’s growth remaining robust against a lagging share price, the stock has compressed its valuation to rather attractive levels. At 17.4x this year’s expected adjusted EPS, I believe that UNH stock provides a potent mix of safety and upside, particularly with double-digit earnings growth persisting. With the possibility of a P/E expansion adding to future return prospects, UNH is certainly a stock worth your next $1000.

On the date of publication, Nikolaos Sismanis 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.