While the broader indexes have rallied to new heights this year, propelled largely by the momentum in tech stocks, many companies have seen their valuations plummet as macroeconomic conditions have deteriorated. It’s been a tale of two markets, with the haves soaring and the have-nots languishing in the doldrums.

However, I believe we’re on the cusp of a new chapter in the market’s story. As the economic cycle shifts gears, certain undervalued stocks that have been beaten down are starting to show signs of life. The outlook for these rebounding plays is beginning to brighten, and I think it’s wise to start digging through the bargain bin before these undervalued stocks potentially soar. Let’s take a look!

Verizon Communications (VZ)

Verizon Communications (NYSE:VZ) is a leading telecommunications company providing wireless and broadband services to millions of customers across the U.S. I’ll admit, Verizon stock has been a pretty lousy holding for the past few years, and most players in the telecom sector have been struggling due to their massive debt loads and sluggish growth. However, I don’t think this situation will persist forever, especially as interest rates start coming down.

Verizon’s net interest losses hit a staggering $1.6 billion in Q2 alone.

Despite this headwind, the company still managed to post profits and dish out hefty dividends. With a juicy 6.5% dividend yield and the stock up 21.5% over the past year, I believe Verizon has bottomed out for now and has plenty of room to run as rates are cut.

As interest expenses ease, I expect to see some serious margin expansion that could fuel a significant recovery in the stock price. Plus, falling treasury yields will make Verizon’s dividend look even more attractive to income-hungry investors.

While the road ahead isn’t without challenges, Verizon is making moves to stay competitive. The company has launched personalized offerings like myPlan and myHome, which have seen incredible adoption rates. And for businesses, their end-to-end Verizon Business Complete package is an industry first.

So, despite the recent struggles, I think Verizon is positioning itself for a comeback.

Barrick Gold (GOLD)

Barrick Gold (NYSE:GOLD) is a leading gold and copper mining company based in Canada. Gold prices have been soaring in recent months, and I believe gold-related businesses like Barrick are poised to shine in the coming quarters. Despite being down nearly 30% from its 2020 peak, Barrick’s stock looks attractive at current levels.

With gold prices much higher now, I expect Barrick to deliver strong results going forward. The company is already showing signs of a rebound, with its stock up nearly 15% over the past year. Barrick’s recent Q2 earnings beat surprised investors, driven by higher gold and copper prices.

Barrick reported Q2 revenue of $3.16 billion, up 12% year-over-year and beating estimates. Adjusted EPS surged 68% to 32 cents, also exceeding expectations. The company generated an impressive free cash flow of $340 million, a significant jump from $63 million a year earlier.

While gold production dipped slightly to 948,000 ounces, gold prices climbed to $2,344 per ounce. Barrick maintains its 2024 gold production guidance of 3.90-4.30 million ounces. The company also has ambitious copper expansion plans underway.

Analysts are bullish on Barrick, with all nine analysts rating this stock a buy. With gold prices likely to keep rising, I believe GOLD stock is poised to rebound further as one of the top gold miners globally.

Dollar General (DG)

Dollar General (NYSE:DG) is a discount retailer that operates over 20,000 stores across the United States and Mexico. The stock has taken a beating lately with shares down 13.5% year-to-date. However, I still think Dollar General remains a solid long-term bet.

Yes, the company is facing some near-term pressures. Shrink was worse than expected last quarter, and analysts at Cleveland Research just downgraded the stock to neutral. Loop Capital also cut its price target, citing growing concerns about Dollar General’s low-income core customers.

Regardless, let’s not forget Dollar General beat earnings estimates in Q1. Sales rose 6.1% to $9.91 billion. The company is still hugely profitable, generating $363 million in net income last quarter.

I expect profits to rebound strongly in the second half of the year as Dollar General’s “back to basics” initiatives gain traction.

Indeed, I think DG stock should rebound in the quarters ahead as the company’s profitability improves.

Dollar General simply has tremendous staying power. Goldman Sachs agrees, recently adding Dollar General to its Conviction Buy list with a $169 price target.

The stock has already bounced over 12% from its October 2023 low of around $100. As profits recover and interest rates eventually come down, I believe DG stock has a lot more upside ahead.

On the date of publication, Omor Ibne Ehsan 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.