The Dow Jones Industrial Average has long been a barometer of blue-chip stability and market performance. Thirty quality businesses are representative of the overall health of the stock market due to their size, reputation and influence.

However, it has a softer orientation toward technology when compared to the S&P 500 and NASDAQ 100. These have seen significant recent gains driven primarily by tech stocks. However, Dow Jones has underperformed the broader market lately. Specifically, the Dow Jones index has recorded a 16.7% gain over the past year, trailing the S&P 500’s 26.1% and the NASDAQ 100’s 31.9% gains.

While these major indices have surged to new heights, some Dow Jones constituents have struggled to keep pace, seeing their share price decline notably during this period. Yet, this means that the Dow Jones may have become a fertile ground for investors to buy quality businesses at attractive prices.

Let’s explore three Dow Jones stocks that have contributed to the index’s underperformance, as their share prices having lagged recently. I have ensured that these three names feature strong fundamentals and are also trading at historically low valuation levels. Occurrences like these are rare and thus worth seizing, so it’s wise to capitalize on them to avoid future regrets.

Cisco Systems (CSCO)

Cisco Systems (NASDAQ:CSCO) has dominated the infrastructure solutions and networking hardware space for decades. Known for its routers, switches and cybersecurity offerings, Cisco Systems has built a formidable moat. A wide product portfolio and trusted brand precede CSCO.

Yet, the company has faced increased competition lately from smaller-scale firms like Arista Networks (NASDAQ:ANET). The latter has captured some of CSCO’s market share in some areas. Still, the company has managed to sustain exceptional growth, too. Notably, Cisco Systems posted record revenues and earnings per share (EPS) of $57.0 billion and $3.08 last year, respectively. Consensus estimates project a modest decline in both figures this year due to the company’s somewhat cyclical nature. Nevertheless, Cisco Systems remains a cash cow.

With its share down roughly 5% against the overall market rally, CSCO’s valuation is quite compelling at current levels. With its forward P/E of 13.8 standing towards the lower end of its historical range, the stock presents an attractive opportunity. Further, with a dividend yield of 3.4% even after the recent decline, Cisco Systems is poised to attract dividend growth investors. Its impressive track record includes 13 consecutive years of dividend increases, which should also strengthen its appeal as a strong dividend growth pick.

Nike (NKE)

The second beaten-down Dow Jones stock on my list is Nike (NYSE:NKE). The sportswear and athletic footwear powerhouse has seen its shares decline by about 13% over the past year. Interestingly, the stock is now trading at the same levels as it did back in 2019, effectively recording no share price gains for about five years.

One reason that could partially justify the stock’s ongoing underperformance is growing competition. Brands like ON Holdings (NYSE:ONON) and Lululemon Athletica (NASDAQ:LULU) are growing at much stronger rates across various categories. Thus, they are likely capturing some of Nike’s market share.

However, Nike has consistently grown its revenues and earnings during its five-year underperformance. In fact, the company is poised to post record top and bottom line figures this year, too. Wall Street projects fairly flat, yet record sales of $51.7 billion for 2024, along with a 14.7% increase in EPS to $3.70, also a record.

For valuation, Nike stock is now trading at a forward price-to-earnings (P/E) ratio of 26. This is one of the lowest multiples in which shares have traded over the past five years. And, it’s much lower than the mid-30X and mid-40X multiples the stock saw during this period. Today, the stock may still seem somewhat overvalued, given the lag in sales growth. Still, EPS is growing in the double-digits, and Nike still holds massive brand value in the space. Therefore, Nike is amongst the best Dow stocks to buy these days.

Salesforce (CRM)

Salesforce (NYSE:CRM) is one of the newer companies to enter the Dow Jones index. The cloud-based customer relationship management (CRM) giant has been a Dow Jones constituent since August 2020. During this period, its share price performance has been fairly rocky. While the company has managed to grow across the board, investor concerns over a notable slowdown in growth have led to some steep sell-offs.

Admittedly, these concerns are fairly justified. In its most recent Q1 results for fiscal 2025, Salesforce missed revenue estimates. Notably, this marks only the second instance in 20 years where Salesforce fell short of the Street’s expectations. The previous miss occurred in Q4 of 2006, making it just two revenue misses in 80 quarters. Also, the 10.7% revenue increase in the quarter was indeed the weakest in the company’s history. Further, management’s guidance for Q2 signals a further slowdown, with revenue growth estimates ranging between 7% and 8%.

Nevertheless, Salesforce has progressed by expanding its margins and scaling its profitability—a trend that Wall Street seems to ignore. CRM achieved an adjusted operating margin of 32.1% in Q1, a 450 basis points increase from the previous year. Therefore, while revenue growth did decelerate, Salesforce still grew its operating cash flow by a tremendous 39% to $6.25 billion. Recent months have seen Salesforce’s share price lag behind despite such strong improvements in profitability, which likely forms a buying opportunity.

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.