The stock market is off to one of its worst Januarys ever. That’s bad news for those of us with significant exposure to stocks. But in a sense, it’s good news for those of us looking to buy great companies at attractive valuations. This winter blizzard has buried many excellent stocks without regard for their individual fundamentals — creating bargains for investors with the fortitude to buy in the face of the storm. I’ve looked into the best stocks to own in a market downturn. 

Some experts are pointing to the current selloff as a harbinger of a bear market. They say the U.S. economy is in its seventh year of recovery and overdue for a recession. China is imploding and the Federal Reserve blundered by raising short-term interest rates at the exact wrong time, they argue. So any seeming bargains in the stock market now are nothing but fool’s gold.

#-ad_banner-#Or so they say.

From my perspective, certain stocks are buy-and-hold candidates whenever they’re relatively cheap: large, financially strong companies with established brands and commanding shares in growing markets. Under normal circumstances, you can’t buy them at reasonable valuations because of their sterling qualities. But pessimism creates opportunity for buyers — and I see a few such opportunities today.

One cautionary note: gobbling up shares of every well-known company that’s lost a few bucks in the past week isn’t a smart investment strategy. Some blue chips have temporary troubles that account for their lower-than-usual valuation. Others are in sectors that face headwinds in the near future. Regardless of a stock’s quality, smart investors need to examine each company’s individual fundamentals and outlook before buying.

On that note, a quick update: McKesson (NYSE: MCK), which I recommended last week as a way to diversify away from China exposure, took a hit on Monday after the company lowered its revenue and earnings guidance for 2016, citing lower profit margins on generic drugs. While unfortunate, this news doesn’t change my opinion that McKesson is a strong candidate for continued growth in the coming years. The stock is even more attractive at this lower valuation.  

And here are three cheaper-than-expected blue chips to consider as buy and hold candidates in the wake of this month’s market selloff:

3M (NYSE: MMM) is one of the world’s largest conglomerates, with more than 55,000 products aimed at consumers as well as commercial customers in the office, industrial and healthcare sectors. Its iconic brands include Post-it, Scotch, Scotch-Brite, O-Cel-O and Nexcare. In addition to its famous adhesive products, 3M specializes in abrasives, laminates, fire protection, dental and orthodontic, electronic, medical, optical film and car-care products. Its technologies make it a player in fields you may not have pegged for 3M, including renewable energy and nanotechnology.

3M has disappointed analysts and investors with lower-than-expected sales growth twice over the past year — and certainly China and other emerging markets could pose problems going forward. But as a long-term holding, the stock is very affordable now. Financially, 3M is one of the strongest companies out there, with prodigious cash flow and little debt. It has paid a quarterly dividend without fail since 1916, and the stock now yields 2.9%. At recent levels, it trades at only 17 times analysts’ consensus per-share earnings estimate.

Pfizer (NYSE: PFE), the world’s largest pharmaceutical company, generates $50 billion in annual revenue from a long list of blockbuster drugs. And Pfizer is about to become even bigger, thanks to its planned acquisition of Allergan (NYSE: AGN), the maker of Botox and Alzheimer’s drug Namenda. The deal, expected to close this year, will make Pfizer the sixth-largest company in the world.

As the market leader in pharmaceuticals, Pfizer enjoys built-in growth prospects as the population of the world’s western countries continues to age. The company generates prodigious cash flow, helping fund the industry’s largest research & development unit and, potentially, future acquisitions. 

Due to the selloff, Pfizer is trading at its lowest price in well over a year. It trades at only 13 times analysts’ consensus estimate for 2016 earnings per share and yields 3.7%.

Verizon Communications (NYSE: VZ) is the #1 wireless company in the United States and one of the largest cable and internet service providers. It generates strong free cash flow and invests heavily in new technologies and emerging platforms. As such, it’s perfectly positioned to benefit from growing demand for data, video and mobile services in the coming years.  

Verizon’s market strength, recurring revenue, strong cash flow and respected management make it as solid a bet as any to buy and hold. That’s especially true at current levels. The stock has dropped about 2.5% this year due solely to the overall market selloff; indeed, if investors are nervous about China, this company is one to buy, not sell. It now yields near 5.0% and trades at only 11.2 times analysts’ consensus estimate for 2016 earnings per share. Buy this top-quality telecom leader and stash it away.

Risks To Consider: Pfizer is subject to adverse regulatory actions regarding drugs in its approval pipeline and/or its merger with Allergan. Verizon and 3M are also vulnerable to negative regulatory news.
    
Action To Take: Buy 3M below $150, Pfizer below $35 and Verizon Communications below $48. 

Editor’s Note: My colleague Dave Forest would call blue chips like these “Forever” stocks. The idea of Forever stocks is simple: as an investor, you want to buy great businesses that can be held for months, years, even decades, without worry. And that’s the foundation of his premium advisory, Top 10 Stocks. To learn more about Top 10 Stocks, and get Dave Forest’s list of Top 10 Stocks for 2016, click here.

Disclosure: Nick Lanyi owns shares of VZ and PFE.