7 Most Undervalued Dividend Stocks to Buy According to Hedge Funds

1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 123

Forward P/E Ratio as of March 20: 13.00

JPMorgan Chase & Co. (NYSE:JPM) is an American banking and financial services company. It posted strong financial results in the fourth quarter of 2024, with net income soaring 50% to $14 billion and net revenue rising 10% to $43.7 billion. While net interest income declined 3% to $23.5 billion, noninterest revenue saw a significant 29% increase, reaching $20.3 billion. Operating expenses fell 7% to $22.8 billion, but after adjusting for the previous year’s $2.9 billion FDIC special assessment, they actually grew by 5%, driven by higher compensation, brokerage fees, and technology investments. The bank also allocated $2.6 billion for credit losses, with net charge-offs climbing to $2.4 billion, primarily from its Card Services division.

JPMorgan Chase & Co. (NYSE:JPM) has built up a substantial excess capital reserve, equivalent to around 10% of its market capitalization while maintaining a disciplined approach to capital deployment. Although stock buybacks have not been a top priority, the company still repurchased $6.36 billion worth of shares in Q3 2024. As economic conditions stabilize, it is expected to gradually reduce its cash reserves and increase capital returns to shareholders.

As a consistent dividend payer since 1972, JPMorgan Chase & Co. (NYSE:JPM) remains a preferred choice of income investors In the most recent quarter, the company reaffirmed its commitment to shareholder returns by distributing $3.5 billion in dividends. On March 18, it announced a 12% hike in its quarterly dividend to $1.40 per share. As of March 20, the stock has a dividend yield of 2.34%.

Overall, JPMorgan Chase & Co. (NYSE:JPM) ranks first on our list of the most undervalued stocks according to hedge funds. While we acknowledge the potential of JPM as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than JPM but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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