By historical standards, the stock market has gotten incredibly expensive. The Shiller price-to-earnings ratio, also known as the cyclically adjusted price-to-earnings ratio (CAPE), shows that we’re in one of the priciest markets in history.
This steep valuation could make investors nervous, but there are still deals to be found. If you’re on the hunt for solid value in this historically expensive market and have $2,000 to invest, here are two stocks that deserve a spot in your portfolio today.
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Chevron (NYSE: CVX) operates in the historically volatile oil and gas industry, which is always vulnerable to declining oil and gas prices. However, it operates an integrated oil and gas business model that helps smooth out its earnings. Its upstream business, which explores and produces oil, benefits from rising oil and gas prices. Meanwhile, its downstream operations focused on refining crude oil into fuels, lubricants, and petrochemicals.
Chevron has done a really good job of focusing on efficient operations and creating a mix of short-cycle and long-cycle assets. The company’s acquisition of the Stabroek Block in Guyana (as part of its 2025 Hess acquisition) provides it with huge, low-cost, multidecade production capabilities and has a low break-even price of $30 per barrel. Meanwhile, the company’s presence in the Permian Basin allows it to quickly ramp up production if oil prices rise.
Chevron is trading at about 25 times this year’s projected earnings. This appears expensive, but analysts see strong growth ahead, with earnings per share projected to reach $9.09 in 2027 and $11.01 in 2028. Chevron’s stake in Stabroek gives it a low break-even cost, which should help it generate strong free cash flow, while its other assets provide upside potential should oil and gas prices rise from here.
Progressive (NYSE: PGR) is a rock-solid automotive insurance company that consistently outperforms its peers in underwriting profitability. The company has long been committed to generating a consistent underwriting profit of at least 4% of its total premiums written, and its approach has helped it stay ahead of the competition for decades.
In the past year, Progressive stock has struggled and is now down 30% from its all-time high. The main concern among investors is that the broader insurance market is seeing heightened competition. After years of inflation, the insurance market is softening, and premiums are rising more slowly as competition heats up.
