On most metrics that Wall Street looks at, especially forward price-to-earnings (P/E) and price-to-book numbers, most S&P 500 sectors are trading at average relative valuation. What that translates to is, without significant earnings increases to expand multiples, many top-performing sector stocks may be expensive and overweighted by portfolio managers. A new report from Savita Subramanian, the top-notch strategist at Merrill Lynch, and her team scanned the S&P 500 universe looking for inexpensive and neglected stocks that could be winners when they return to vogue.

While most people don’t need an equity strategist to tell them that energy is underperforming by double digits, many may be surprised to know that utility stocks are trading at a 20% premium to average relative forward P/E. We cross referenced the inexpensive and neglected stocks sectors, with stocks within those sectors rated Buy at Merrill Lynch. What we found may be some tremendous opportunities for patient investors.

We picked one stock rated Buy from each inexpensive and neglected sector.

Cisco Systems Inc. (NASDAQ: CSCO) gave the market a very pleasant surprise when it reported solid earnings on Wednesday after two lackluster quarters. While some on Wall Street were distressed with the forward guidance, which came in below expectations, more than one firm we cover, and Merrill Lynch is included, feel that the hyper-conservative forward view may very well be beaten. The analysts noted the strong execution on multiple fronts, backed up Cisco’s solid strategy. Switching grew 3% year-over-year, wireless grew 12%, security 25% and data centers 15%.

Cisco investors are paid a respectable 3% dividend. The Merrill Lynch price target for the stock is $28. The Thomson/First Call consensus estimate is $26.50. Cisco closed Thursday at $25.68. Here is how Cisco is rated now by analysts after its earnings report.

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Exxon Mobil Corp. (NYSE: XOM) is an energy sector behemoth that the Merrill Lynch analysts are very positive on. Wall Street as a whole acknowledges the strength of the integrated giant, which played a significant part in the company’s very solid third-quarter earnings report. Merrill Lynch conceded that while the bar had been set low due to very disappointing second-quarter numbers, the firm believes that continued steady operating and financial results likely will lead to multiple expansion. Also pointed out in the report was that the company’s global downstream chemical segment plays a huge part for Exxon. It may be a part that many on Wall Street do not fully appreciate.

Exxon investors are paid a solid 2.9% dividend. The Merrill Lynch price target is $110. The consensus price objective is lower at $101.42. Shares closed trading on Thursday at $94.66.

Ford Motor Co. (NYSE: F) is a top brand name recognized by customers, and the iconic company remains America’s best-selling vehicle brand. The company’s F-150 truck remains the top-selling truck and has almost gained mythical status in some parts of the country, avoiding some of the negative headlines that have plagued the competition. The aging of the American consumer’s vehicles should help to keep sales strong for the foreseeable future. The change at the CEO position has unnerved some investors, and the time to buy the stock may be at hand, especially with sales at near record levels.

Ford investors are paid an outstanding 3.5% dividend. The Merrill Lynch price target for the iconic carmaker is $20. The consensus price target is $17.21. The stock closed Thursday $14.93.

Freeport-McMoran Copper & Gold Inc. (NYSE: FCX) was battered last year and this as investors fled mining companies, and it is a top mining and material stocks to buy. The company is a premier U.S.-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. It is also the world’s largest publicly traded copper producer.

Investors are paid a substantial 4.4% dividend. Merrill Lynch has a $39 price target, and the consensus is posted at $38.60. Shares closed Thursday a $27.90.

Intel Corp. (NASDAQ: INTC) new commitment to smartphone and mobile applications, combined with the resurgence of PC growth this year, has made Intel one of the best large cap technology stocks to buy. Intel trades at just over 15 times forward earnings, more than in recent years, but still a reasonable multiple for investors looking for growth. The Merrill Lynch analysts think the company could continue to beat earnings estimates and raise forward guidance. They agree that the PC cycle and cloud data center growth are key factors for optimism.

Intel shareholders are paid a solid 2.8% dividend. Merrill Lynch has a huge $43 target, while the consensus target is $34.31. Intel closed Tuesday at $33.68.

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Each and every one of these stocks to buy is a blue chip company with an excellent pedigree and paying solid dividends. Unlike some of the more speculative sectors, most investors will not really be going out on a limb investing money in one or all of these stocks.

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