After two consecutive years of strong gains in the S&P 500, finding true value plays in the market feels like searching for a needle in a haystack.

Everyone’s chasing the next big growth story, but here’s the truth: real money is made by buying what’s been overlooked.

That’s where Merck (MRK) comes in. During our latest Catalyst Cashouts Live session, a question came up: What’s the best value stock to start the year?

My answer was simple-Merck.

And here’s why.

Using the Dogs of the Dow strategy, which has delivered an average annual return of 10% over the last 25 years, Merck stands out as the most undervalued blue-chip stock in the Dow Jones Industrial Average.

It’s a rare combination of high yield, low price, and strong fundamentals-a perfect setup for a rebound.

What Are the Dogs of the Dow Strategy?

If you’re not familiar with the Dogs of the Dow, let me break it down.

At the end of each year, you identify the highest-dividend-paying stocks in the Dow Jones Industrial Average that underperformed during the year. These stocks are often undervalued, beaten down, and ripe for a recovery.

Historically, this strategy has produced impressive returns.

It works because it targets blue-chip companies with strong fundamentals that are temporarily out of favor.

For 2025, Merck (MRK) takes the crown as the top “Dog.” It’s the highest-yielding Dow stock that underperformed last year, making it a textbook value play.

Why Merck Stands Out

Let’s get into the details. Merck isn’t just a beaten-down healthcare stock – it’s a blue-chip powerhouse with serious upside potential.

Here’s why Merck caught my attention:

1. Dividend Yield: Merck’s dividend yield is one of the highest in the Dow, making it a great pick for income investors.
2. Undervalued Sector: The healthcare sector has struggled for the last two years, but that’s exactly why it’s one of the few true value opportunities in today’s market.
3. Strong Fundamentals: Merck isn’t some speculative play-it’s a fundamentally sound company with a rock-solid balance sheet and a history of consistent growth.

Merck’s underperformance has created a rare buying opportunity. While most of the market has been chasing overpriced tech stocks, Merck has quietly positioned itself as an undervalued gem.

Maximizing Gains with LEAPS Options

When targeting undervalued opportunities like Merck (MRK), LEAPS options (Long-term Equity Anticipation Securities) are a powerful tool. These long-dated options allow you to profit from price movements over an extended period-while requiring far less upfront capital than buying shares outright.

Why LEAPS Are Smarter Than Buying Stock

1. Lower Cost, Higher Leverage: LEAPS let you control more upside for a fraction of the cost of owning shares, maximizing your profit potential.
2. Time to Let the Trade Play Out: With expirations a year or more away, LEAPS allow you to take advantage of a long-term recovery without worrying about short-term volatility.
3. Amplified Returns: A moderate move in the stock price can result in significantly higher percentage gains in LEAPS, thanks to leverage.

The Strategic Edge

For recovery plays like Merck, LEAPS are ideal. They reduce the capital required, amplify potential gains, and give you plenty of time for the rebound to materialize.

Instead of tying up cash in shares, LEAPS allow you to target Merck’s potential upside efficiently and with built-in risk management.

This is how you maximize value in the market-smart, disciplined, and strategic.

YOUR ACTION PLAN

Earlier this week, we entered a long position in Merck (MRK) using the powerful LEAPS options strategy we discussed above.

This approach gives us plenty of time to capture potential upside while putting less capital at risk and amplifying our returns.

To get the exact MRK trade, join Catalyst Cashouts Live now!

But that’s just one trade.

In Catalyst Cashouts Live, we go deeper—breaking down the markets, identifying undervalued opportunities, and positioning for profits with real-time trade alerts and actionable strategies.

If you’re not already a member, now’s the time to take action.

Click here to get started today!