2 S&P 500 Stocks to Buy on Sale Right Now

It's not fun to see the value of your investments suddenly dive, but the truth is the stock market was due for a correction after two strong years of returns. At its recent peak, the S&P 500 (SNPINDEX: ^GSPC) traded at a price-to-earnings (P/E) multiple of 30, which is well above its 16 average historically.

A great strategy to approach the current market environment is to focus on stocks of quality businesses that trade at discounts to the market average P/E. Here are two outstanding businesses you can buy on sale right now.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Constellation Brands

The recent dip in the stock of Constellation Brands (NYSE: STZ) is a rare opportunity to buy one of the leading beverage giants at a discount. Constellation is the top brewer of imported beer in the U.S., and it also owns seven of the top 100 premium wine brands. The stock looks undervalued at a forward P/E of 12.5, with an above-average dividend yield to sweeten the deal.

The company reported low-single-digit sales growth for its beer portfolio last quarter, but management noted more competitive pricing causing some uncertainty to near-term demand across its brands, including Corona and Modelo. Moreover, tariffs on imports from Mexico may add to near-term uncertainty.

Still, management guided for beer sales to increase between 4% and 7% in fiscal 2025, which would help offset declining sales in wine. Constellation's beer business is outpacing the rest of the industry, as it is leading competitors in winning over younger customers in the 21- to 24-year-old demographic.

This isn't a high-growth business. Its revenue grew at a compound annual rate of 7% over the last decade. But its leading brands can generate consistent returns for shareholders, as noted by the company's generous dividend. Its current quarterly payout of $1.01 translates to a forward yield of 2.27%, making Constellation a solid stock to hold if the stock market continues to weaken.

Importantly, with the S&P 500 trading recently at a historically high valuation, investors could potentially beat the market over the next few years with this value stock. On the basis of its cash from operations (CFO) per share, Constellation shares trade at a price-to-CFO multiple of 11. If the stock returns to its 10-year median CFO multiple of 17.8, investors could see a 61% return excluding any further growth or dividends from the business.

2. Lululemon Athletica

After rising 400% over the last 10 years, Lululemon Athletica (NASDAQ: LULU) stock has been flat over the last few years. But the business is on pace to nearly triple its 2021 revenue by 2026, and that has brought its price-to-sales multiple down to its lowest level in five years.

Lululemon is a yoga-inspired brand with a highly loyal customer following. The company's stores generate above-average sales per square foot over $1,600, while e-commerce sales made up 39% of its business in the fiscal third quarter of last year.

The stock's recent stagnation won't last long as the company continues to deliver strong financial results. Through the first three quarters last year, revenue increased by 9% year over year. That is below its 20% annualized growth over the last 10 years, but it stands out against the industry leader, Nike, which is struggling to report any revenue growth in this challenging retail environment.

Lululemon is well on track to expand globally; revenue outside of the Americas made up 26% of the business last quarter. It has continued to profitably grow sales while expanding to new categories including tennis apparel, everyday wear, and footwear. This indicates outstanding growth prospects.

There's enough opportunity globally for Lululemon to return to double-digit revenue and earnings growth in a stronger economy. Against those expectations, the stock's forward P/E of 21 looks attractive and sets the stage for market-beating returns over the next decade.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $305,226!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,382!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $517,876!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of March 18, 2025

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica and Nike. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.