In this article, we will take a look at some of the best dividend stocks that are incredibly cheap.
Value investing has long been a preferred strategy among investors, largely influenced by Warren Buffett, who continues to seek out stocks he believes are trading below their intrinsic value. While growth stocks have recently captured more market attention, value stocks have demonstrated strong long-term performance.
Investment experts such as Josef Lakonishok and David Dreman have emphasized the importance of patience and a disciplined approach, arguing that steady, well-researched investments often yield better results than chasing rapid growth. Their research suggests that value investing outperforms growth strategies about 70% of the time, regardless of a company’s size. Examining businesses across different market capitalizations, they found that, over extended periods, value stocks consistently delivered average annual returns exceeding 7%, outperforming their growth counterparts.
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Lowell Miller’s book, Single Best Investment, explored the principles of value investing, drawing on the research of Fama and French published in the Journal of Finance. The book explained that when a growth stock fails to meet investors’ high expectations, its price often experiences a steep drop as the market reassesses its true worth. On the other hand, value stocks, which typically start with lower expectations, have the potential to surpass forecasts, leading to upward price adjustments. However, the book also underscored the importance of diversification, cautioning against concentrating too much capital on a single investment. Historically, a well-diversified portfolio has proven to be a safer strategy for investors.
A report by BlackRock highlighted that value stocks can provide stability in volatile market conditions. This was evident during the 2022 market downturn when growth stocks suffered heavy losses, while value stocks experienced comparatively smaller declines. By nature, value stocks tend to trade at lower price levels than growth stocks, though the size of this discount has fluctuated over time.
Market analysis suggests that value stock valuations would need to rise by over 40% to return to their historical median, signaling potential upside if they regain investor favor. With growth stocks trading at high valuations, investors may increasingly shift their focus toward value stocks, particularly as the market broadens beyond mega-cap companies. While past performance does not guarantee future outcomes, history provides some perspective. BlackRock noted that the last time the valuation gap between the Russell Growth and Russell Value indexes was as wide as it is today—back in December 2000—value stocks went on to outperform growth stocks over the subsequent one-, three-, and five-year periods.
Dividend-paying value stocks can appeal to investors looking for a combination of steady income and growth potential. These stocks are often associated with well-established companies that, despite being undervalued by the market, continue to demonstrate solid financial strength. In this article, we will take a look at some of the best dividend stocks that are incredibly cheap.
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Our Methodology
For this list, we used a Finviz screener and identified dividend companies with forward P/E ratios below 11, as of March 14. The low price-to-earnings ratio shows that they are traded below their intrinsic value. From the resultant dataset, we selected 12 companies with strong dividend histories and solid balance sheets. The stocks are ranked according to their forward P/E ratios.
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12. Bank of America Corporation (NYSE:BAC)
Forward P/E Ratio as of March 14: 10.72
Bank of America Corporation (NYSE:BAC) is an American financial services company. It operates across multiple industry segments, including consumer and commercial banking, capital markets and investment banking, and wealth management. With a history spanning over a century, it has demonstrated long-term resilience. One of its key advantages is its scale—bringing in $102 billion in revenue in 2024 and closing the year with an impressive $3.3 trillion in assets. This sheer size gives the company an edge over smaller competitors by allowing it to manage operating costs more efficiently. In addition, its investments in marketing and digital initiatives tend to have a broader reach and greater impact.
Bank of America Corporation (NYSE:BAC) has consistently remained profitable, a quality that shouldn’t be overlooked. Over the past five years, its net profit margin has averaged an impressive 27.9%. The ability to generate positive net income in nearly any economic environment is a strong advantage for any company. In the fourth quarter of 2024, the bank’s net income more than doubled to $6.7 billion, up from $3.1 billion a year earlier. It also grew its customer base, adding 213,000 new consumer checking accounts—continuing a six-year streak of quarterly growth. On top of that, the bank returned $2 billion to shareholders through dividend payments.
Bank of America Corporation (NYSE:BAC), one of the best dividend stocks, has been growing its dividends for 11 consecutive years. The company has also been paying uninterrupted dividends to shareholders for the past 27 years. It currently offers a quarterly dividend of $0.26 per share and has a dividend yield of 2.54%, as of March 14.
11. Merck & Co., Inc. (NYSE:MRK)
Forward P/E Ratio as of March 14: 10.52
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based multinational pharmaceutical corporation. The company has a strong portfolio, headlined by Keytruda, the world’s top-selling drug for cancer treatment. It is also a major player in the animal health sector. Its history of success speaks for itself—developing new medicines is both costly and uncertain, yet Merck has consistently brought innovative treatments to market. This steady performance has supported reliable revenue and earnings growth, enabling the company to increase its payouts over time.
Merck & Co., Inc. (NYSE:MRK) delivered solid financial results, with revenue climbing 7% year-over-year to $15.6 billion. The company has expanded its footprint in specialty pharmaceuticals and oncology, with Keytruda remaining a crucial player in cancer treatment and a major driver of revenue growth. Merck’s strong market position has allowed it to generate steady cash flow, reinforcing its commitment to shareholder returns. For the full year, Keytruda sales surged 18% from the previous year, reaching $29.5 billion.
Merck & Co., Inc. (NYSE:MRK)’s quarterly dividend currently comes in at $0.81 per share for a dividend yield of 3.43%, as of March 14. It is one of the best dividend stocks on our list as the company has increased its dividends for 14 consecutive years.
10. U.S. Bancorp (NYSE:USB)
Forward P/E Ratio as of March 14: 9.32
U.S. Bancorp (NYSE:USB) is an American bank holding company, headquartered in Minnesota. The company offers a broad spectrum of financial services, including commercial and consumer banking, payment solutions, wealth management, and investment services. The bank prioritizes operational efficiency and effective balance sheet management, both of which play a crucial role in maintaining long-term profitability.
In the fourth quarter of 2024, U.S. Bancorp (NYSE:USB) delivered slightly better-than-expected results, surpassing Wall Street forecasts. Earnings per share (EPS) came in at $1.07, edging past analysts’ estimates of $1.05, while revenue reached $7.01 billion, just above the projected $7 billion. Despite an uncertain economic landscape and regulatory shifts, the company saw solid net income growth. The results underscore its ability to navigate challenges effectively, demonstrating improved efficiency and financial resilience. Its net interest income saw a modest rise to $4.18 billion, driven by effective repricing strategies, though its net interest margin dipped slightly to 2.71%. The company also continued to invest in financial technology, showcasing this commitment with the rollout of Elavon’s cloud-based payment gateway.
On March 11, U.S. Bancorp (NYSE:USB) declared a quarterly dividend of $0.50 per share, which fell in line with its previous dividend. Overall, the bank has raised its payouts for 14 years in a row, which makes USB one of the best dividend stocks. As of March 14, the stock has a dividend yield of 4.76%.
9. Franklin Resources, Inc. (NYSE:BEN)
Forward P/E Ratio as of March 14: 9.15
Franklin Resources, Inc. (NYSE:BEN) ranks ninth on our list of the best dividend stocks that are incredibly cheap. In fiscal Q1 2025, the company saw a 34% year-over-year rise in long-term inflows, excluding reinvested distributions. The company reported $17 billion in net inflows across equity, multi-asset, and alternative investments during the quarter. However, long-term net outflows reached $50 billion, excluding Western Asset Management. Despite this, the firm still achieved $18 billion in long-term net inflows across all asset classes.
In the past 12 months, Franklin Resources, Inc. (NYSE:BEN) has declined by nearly 28%, which reflects its historically volatile performance. Despite these challenges, the company has undergone notable transformations, including strategic acquisitions designed to enhance its services. A key move was last year’s purchase of volScout, an options-trading technology firm, which has bolstered its capabilities to better support both retail and institutional investors.
Franklin Resources, Inc. (NYSE:BEN) holds a very strong dividend history, having raised its payouts for 49 consecutive years. This means that BEN is just one year away from becoming a Dividend King. Currently, it offers a quarterly dividend of $0.32 per share and has a dividend yield of 6.56%, as of March 14.
8. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio as of March 14: 8.92
Bristol-Myers Squibb Company (NYSE:BMY) is an American pharmaceutical industry company that offers a wide range of related services and products to its consumers. The company is a major player in the pharmaceutical industry, boasting a broad portfolio of medications, with more than six generating over $1 billion in annual sales. While it has a strong presence in the oncology market, its product lineup also includes treatments for immunology and rare diseases.
Several of Bristol-Myers Squibb Company (NYSE:BMY)’s older drugs continue to perform well, including the anticoagulant Eliquis, which saw an 11% year-over-year sales increase, reaching $3 billion for the period. At the same time, the company’s newer treatments are gradually making a bigger impact on its financial performance. One of the most promising is Reblozyl, a treatment for anemia in patients with beta-thalassemia. Originally approved in the US in 2019, the drug is expected to be a key driver of revenue growth for years to come.
In the fourth quarter of 2024, Bristol-Myers Squibb Company (NYSE:BMY) reported $12.34 billion in revenue, marking a 7.5% increase from the previous year. The company’s Growth Portfolio was a standout, with revenue rising 21% to $6.4 billion, fueled by strong demand for key treatments. Sales of Reblozyl, Breyanzi, and Camzyos saw impressive growth, jumping 71%, 125%, and 101%, respectively.
Bristol-Myers Squibb Company (NYSE:BMY) offers a quarterly dividend of $0.62 per share for a dividend yield of 4.20%, as of March 14. The company has a strong track record as a dividend-paying company, having increased its payouts for 16 consecutive years. In addition, it has consistently paid dividends to shareholders for an impressive 93 years, which makes it one of the best dividend stocks on our list. This steady dividend growth is supported by the company’s solid financial position, with more than $10.3 billion in cash and cash equivalents at the end of the year.
7. British American Tobacco p.l.c. (NYSE:BTI)
Forward P/E Ratio as of March 14: 8.90
British American Tobacco p.l.c. (NYSE:BTI) is a London-based manufacturing company that specializes in cigarettes, tobacco, and various other nicotine products. The company viewed 2024 as a year of investment, with its performance meeting expectations. Throughout the year, the company continued its transformation efforts, adding 3.6 million adult consumers to its smokeless product segment, bringing the total to 29.1 million. These products now contribute 17.5% of total revenue, up by one percentage point from 2023.
For FY24, British American Tobacco p.l.c. (NYSE:BTI)’s revenue came in at £25.8 billion, reflecting a 5.2% decline from the previous year. This drop was largely attributed to the sale of its operations in Russia and Belarus in September 2023, as well as unfavorable currency exchange effects. However, growth accelerated in the second half of the year, driven by innovations in its New Categories segment, strategic investments in U.S. commercial initiatives, and a reversal of earlier wholesaler inventory movements.
Looking ahead to 2025, regulatory and fiscal challenges in Bangladesh and Australia are expected to weigh on the company’s combustibles segment. Still, British American Tobacco p.l.c. (NYSE:BTI) remains optimistic about building on its progress as it transitions from an investment phase to full-scale execution. It remains committed to its mid-term goals of 3-5% revenue growth and 4-6% adjusted profit from operations growth on a constant currency basis by 2026.
British American Tobacco p.l.c. (NYSE:BTI) has also maintained strong cash flow generation, consistently achieving 100% operating cash conversion over the past five years, with a 101% conversion rate in 2024—exceeding its 90% target. Last year, it generated £7.9 billion in free cash flow before dividends, while operating cash flow surpassed £10 billion. Over the past five years, the company has returned £28 billion to shareholders through a combination of steady dividend growth and a sustainable share repurchase program. In 2024, it initiated £0.7 billion in share buybacks, with plans for an additional £0.9 billion in 2025. It currently pays a quarterly dividend of $0.7431 per share and has a dividend yield of 7.24%, as recorded on March 14.
6. Citigroup Inc. (NYSE:C)
Forward P/E Ratio as of March 14: 8.87
Citigroup Inc. (NYSE:C) is a New York-based multinational investment bank and financial services company. It operates across three main divisions: Global Consumer Banking, Institutional Clients Group, and Treasury and Trade Solutions. With its vast customer network and strong international footprint, the company focuses on enhancing its market competitiveness.
Citigroup Inc. (NYSE:C) recently dropped sharply after reports of major transfer errors, including an $81 trillion mistaken deposit. These issues add to ongoing regulatory challenges, following a 2020 consent order and hefty fines for past control failures, including a $900 million accidental transfer. Since the start of 2025, the stock has declined by nearly 2%, as of the close of March 13.
Analysts see these errors as short-term challenges rather than long-term threats to Citigroup Inc. (NYSE:C)’s overall performance. In fiscal 2024, the bank’s net income jumped nearly 40% to $12.7 billion, exceeding its revenue target. This growth was fueled by strong performances in its Services, Wealth, and US Personal Banking divisions, along with improved efficiency from cost management and a major restructuring. Annual revenue rose 3% year-over-year to $81.1 billion.
Citigroup Inc. (NYSE:C) remains a reliable dividend payer, returning $6.7 billion to shareholders through dividends and stock buybacks in FY24. With a 34-year history of uninterrupted dividends, it is one of the best dividend stocks on our list. The company currently offers a quarterly dividend of $0.56 per share and has a dividend yield of 3.26%, as of March 14.
5. Barings BDC, Inc. (NYSE:BBDC)
Forward P/E Ratio as of March 14: 8.43
Barings BDC, Inc. (NYSE:BBDC) is an American business development company, headquartered in North Carolina. The company specializes in debt investments in middle-market companies. It has established itself as a leading business development company by capitalizing on growth opportunities and delivering strong returns for shareholders. Over the past year, its stock has gained nearly 3%, a notable achievement given its relatively low-risk nature. Unlike high-volatility stocks that offer higher return potential but come with greater risk, Barings BDC provides a more stable investment option. Its steady market presence, attractive dividend payouts, and rising net asset value contribute to its reputation as a lower-risk choice for investors.
In the fourth quarter of 2024, Barings BDC, Inc. (NYSE:BBDC) reported a total investment income of $70.6 million, which fell by 6.9% from the same period last year. The company reported net investment income of $29.5 million, or $0.28 per share, while net assets grew by $24.8 million, or $0.24 per share. It expanded its portfolio with 15 new investments totaling $137.9 million and allocated an additional $156.5 million to existing portfolio companies. Additionally, the company made a $3.5 million equity co-investment alongside certain affiliates in a portfolio firm that provides financing to plaintiff law firms involved in mass tort and other civil litigation cases.
Barings BDC, Inc. (NYSE:BBDC) offers a quarterly dividend of $0.26 per share and has a dividend yield of 11.10%, as of March 14. Given the company’s strong performance, confidence in its portfolio, and positive momentum in early 2025, it has also declared a special dividend totaling $0.15 per share, which will be distributed in three equal quarterly installments beginning in March. It is one of the best dividend stocks on our list as the company has been making regular dividend payments since 2007.
4. Comcast Corporation (NASDAQ:CMCSA)
Forward P/E Ratio as of March 14: 8.18
Comcast Corporation (NASDAQ:CMCSA) is an American telecommunications company that offers a wide range of mobile phone and cable TV services. The company operates through several divisions, including Residential Connectivity & Platforms, Business Services Connectivity, Media, Studios, and Theme Parks. On March 11, Comcast announced a free internet speed upgrade for more than 20 million Xfinity customers. This update will boost upload speeds by 50% to 100%, improving file sharing, remote work, and video uploads on social media.
In the fourth quarter of 2024, Comcast Corporation (NASDAQ:CMCSA) reported nearly $32 billion in revenue, marking a 2.1% year-over-year increase. This growth was driven by strong performance across its six core business segments. Despite intense competition, connectivity revenue climbed 5%, while mobile services grew with 1.2 million new lines added. Business Services also saw a 5% revenue increase.
Comcast Corporation (NASDAQ:CMCSA)’s quarterly dividend comes in at $0.33 per share and has a dividend yield of 3.73%, as of March 14. The company maintained a strong cash position, with operating cash flow exceeding $8 billion, up from $6 billion a year ago. Free cash flow more than doubled to $3.26 billion from $1.7 billion in the prior year. Additionally, Comcast returned $1.2 billion to shareholders through dividends. With 17 consecutive years of dividend growth, it remains one of the best dividend stocks on our list.
3. Ford Motor Company (NYSE:F)
Forward P/E Ratio as of March 14: 7.01
Ford Motor Company (NYSE:F) ranks among the largest global automakers, producing a wide range of vehicles, including traditional gasoline-powered models, hybrids, and electric vehicles (EVs), under both its Ford and luxury Lincoln brands. The company is undergoing a significant transformation, focusing heavily on EVs, autonomous technology, and software-based services. Through its ‘Ford+’ strategy, it is rapidly expanding EV production, with high-demand models such as the F-150 Lightning and Mustang Mach-E playing a key role in its growth.
As part of its restructuring efforts, Ford Motor Company (NYSE:F) has streamlined its global operations by exiting underperforming markets such as Brazil and India while scaling back its presence in Europe. This strategic realignment has allowed the company to concentrate more on expanding its electric vehicle initiatives. The stock has surged modestly by nearly 1% since the start of 2025.
In the fourth quarter of 2024, Ford Motor Company (NYSE:F) reported $48.2 billion in revenue, reflecting a 5% year-over-year increase. Throughout the year, the automaker maintained strong cash flow, generating $15.4 billion in operating cash flow and $6.7 billion in free cash flow. Looking ahead to 2025, the company expects adjusted EBIT to be between $7.0 billion and $8.5 billion, with adjusted free cash flow projected in the range of $3.5 billion to $4.5 billion. Capital expenditures for the year are estimated between $8 billion and $9 billion. Currently, it offers a quarterly dividend of $0.15 per share and has a dividend yield of 6.17%, as of March 14.
2. Jack in the Box Inc. (NASDAQ:JACK)
Forward P/E Ratio as of March 14: 6.08
Jack in the Box Inc. (NASDAQ:JACK) is a California-based fast food restaurant chain. The company operates under a franchise business model and is known for offering a diverse menu. While inflation and rising wages in California—where nearly 45% of its locations are based—have posed challenges, the company remains focused on a strong recovery. Since acquiring Del Taco in March 2022, it has prioritized expanding its footprint, modernizing kitchen operations, and enhancing digital ordering and delivery services. Its plans to open new locations, including an expansion into Chicago in 2025, underscore its confidence in long-term growth.
In fiscal Q1 2025, Jack in the Box Inc. (NASDAQ:JACK)’s total revenue declined by 3.7% year-over-year to $469.4 million, primarily due to Del Taco’s refranchising efforts. Net income for the quarter stood at $33.7 million. Same-store sales posted a slight increase of 0.4%, with franchise locations growing by 0.5%, while company-owned stores experienced a minor dip of 0.4%.
Jack in the Box Inc. (NASDAQ:JACK) offers a quarterly dividend of $0.44 per share and has a dividend yield of 5.62%, as of March 14. Despite mixed financial results, the company reported a strong cash position in the quarter, generating over $105.6 million in operating cash flow— a significant turnaround from a negative operating cash flow of $22,675 in the prior-year period. The company has maintained consistent dividend payments since 2014, reinforcing its appeal as one of the best dividend stocks.
1. General Motors Company (NYSE:GM)
Forward P/E Ratio as of March 14: 4.10
General Motors Company (NYSE:GM) is an American multinational automotive company that sells trucks, cars, auto parts, and offers software-based services and subscriptions. In the fourth quarter of 2024, the company generated $47.7 billion in revenue, an 11% increase from the prior year. However, net income declined by more than $5 billion due to one-time charges, including $4 billion in non-cash restructuring costs and write-downs tied to certain joint ventures in China. Additionally, the company incurred $0.5 billion in expenses after opting to discontinue funding for its Cruise robotaxi business.
Rather than investing further in robotaxi development—a costly and time-intensive venture—General Motors Company (NYSE:GM) has shifted its focus to driver-assist technologies, which offer a faster path to revenue. This strategic pivot has shown promising results, with CEO Mary Barra noting that approximately 20% of the nearly 18,000 Super Cruise users opted to continue their subscription after their three-year trial period ended in 2024.
On February 26, General Motors Company (NYSE:GM) announced a 25% hike in its quarterly dividend, raising it to $0.15 per share. GM has consistently paid dividends since 2014, supported by its strong cash flow. In FY24, both its operating cash flow and free cash flow stood at $24 billion. As of March 14, the stock carried a dividend yield of 0.99%.
Overall, General Motors Company (NYSE:GM) ranks first on our list of the best dividend stocks. While we acknowledge the potential for GM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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