7 Most Undervalued Dividend Stocks to Buy According to Hedge Funds

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 113

Forward P/E Ratio as of March 20: 11.40

An American financial services company, Bank of America Corporation (NYSE:BAC) ranks second on our list of the most undervalued stocks according to hedge funds. The company provides financial services to individuals, businesses, and government entities through four main divisions. Its Consumer Banking segment handles checking and savings accounts, credit cards, loans, and mortgages. Global Wealth & Investment Management offers investment, brokerage, and retirement planning solutions. The Global Banking division focuses on commercial lending, treasury services, and advisory support, while Global Markets specializes in trading and risk management.

Bank of America Corporation (NYSE:BAC) has consistently delivered strong financial results, maintaining profitability over time. Over the past five years, it has achieved an average net profit margin of 27.9%, demonstrating resilience across various economic conditions. In the fourth quarter of 2024, net income more than doubled to $6.7 billion, up from $3.1 billion in the prior year. Moreover, the bank continued to expand its customer base, adding 213,000 new consumer checking accounts, extending its six-year streak of quarterly growth.

Bank of America Corporation (NYSE:BAC) remains committed to rewarding shareholders, returning $2 billion through dividends in the most recent quarter. With 11 consecutive years of dividend growth and an uninterrupted dividend payment record spanning 27 years, it is a reliable dividend payer for income investors. The company’s quarterly dividend comes in at $0.26 per share for a dividend yield of 2.45%, as of March 20.