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20 Undervalued High-Dividend Stocks With P/E Ratios As Low As 2.9


Updated on August 19th, 2024 by Bob Ciura

Stocks with low P/E ratios can offer attractive returns if their valuation multiples expand. And when a low P/E stock also has a high dividend yield, investors get ‘paid to wait’ for the valuation multiple to increase.

In this research report, we discuss the prospects of 20 undervalued high dividend stocks, which are currently trading at P/E ratios under 15 and are offering dividend yields above 5.0%.

We have ranked the stocks by P/E ratio, from lowest to highest. For REITs, we use P/FFO in place of the P/E ratio. And for MLPs, we use P/DCF (which is distributable cash flows). These are comparable metrics similar to earnings for common stocks.

Additionally, the free high dividend stocks list spreadsheet below has our full list of individual securities (stocks, REITs, MLPs, etc.) with with 5%+ dividend yields.

 

Click here to instantly download your free high dividend stocks spreadsheet now, along with important investing metrics.

Table of Contents

Keep reading to see analysis on these 20 undervalued high dividend stocks.

Undervalued High Dividend Stock #1: Uniti Group (UNIT) – P/E ratio of 2.9

Uniti Group focuses on acquiring, constructing, and leasing out communications infrastructure in the United States.

In particular, it owns millions of miles of fiber strand along with other communications real estate.

Source: Investor Presentation

Uniti Group reported solid results for the first quarter of 2024, with consolidated revenues reaching $286.4 million. Net income stood at $41.3 million, and adjusted EBITDA amounted to $228.6 million, achieving adjusted EBITDA margins of approximately 80%. The core recurring strategic fiber business grew by 4% compared to the same period in 2023.

Uniti Fiber contributed $68.8 million in revenues and $23.8 million in Adjusted EBITDA for the quarter, while Uniti Leasing contributed $217.6 million in revenues and $210.7 million in Adjusted EBITDA.

Click here to download our most recent Sure Analysis report on UNIT (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #2: Eastern Bancshares (EBC) – P/E ratio of 3.6

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts.

It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans.

On July 15th, 2024 Cambridge Bancorp (CATC) merged with Eastern Bankshares, Inc. (EBC).

Undervalued High Dividend Stock #3: Walgreens Boots Alliance (WBA) – P/E ratio of 3.8

Walgreens Boots Alliance is the largest retail pharmacy in both the United States and Europe. Through its flagship Walgreens business and other business ventures, the $13 billion market cap company has a presence in 9 countries, employs more than 330,000 people and has about 12,500 stores in the U.S., Europe, and Latin America.

On June 27th, 2024, Walgreens reported results for the third quarter of fiscal 2024. Sales grew 3% but earnings-per share decreased 36% over last year’s quarter, from $0.99 to $0.63, due to intense competition, which has eroded profit margin.

Source: Investor Presentation

Earnings-per-share missed the analysts’ consensus by $0.08. Walgreens has exceeded the analysts’ estimates in 13 of the last 16 quarters.

However, as the pandemic has subsided and competition has heated in the retail pharmaceutical industry, Walgreens is facing tough comparisons. It lowered its guidance for earnings-per-share in 2024 from $3.20-$3.35 to $2.80-$2.95. Accordingly, we have lowered our forecast from $3.28 to $2.87.

Click here to download our most recent Sure Analysis report on WBA (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #4: Medical Properties Trust (MPW) – P/E ratio of 4.1

Medical Properties Trust is the only pure-play hospital REIT today. It owns a portfolio of over 400 properties which are leased to over 30 different operators.

The majority of the assets are general acute care hospitals, but also include inpatient rehabilitation and long-term acute care.

The portfolio of assets is also diversified across different geographies with properties in 29 states, as well as Germany, the UK, Italy, and Australia.

Source: Investor Presentation

Medical Properties Trust, Inc. (MPW) announced its financial and operational results for the first quarter. The company executed total liquidity transactions of $1.6 billion year-to-date, reaching 80% of its initial FY 2024 target.

Despite recording a net loss of ($1.23) per share and Normalized Funds from Operations (NFFO) of $0.24 per share in the first quarter of 2024.

Click here to download our most recent Sure Analysis report on MPW (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #5:  Icahn Enterprises LP (IEP) – P/E ratio of 4.2

Icahn Enterprises L.P. operates in investment, energy, automotive, food packaging, metals, real estate, and home fashion businesses in the United States and Internationally.

The company’s Investment segment focuses on finding undervalued companies to allocate capital through its various private investment funds.

Significant positions include FirstEnergy Corporation (FE), Xerox Corporation (XRX), Herc Holdings, Inc. (HRI), Newell Brands, Inc. (NWL), and Southwest Gas Holdings, Inc. (SWX).

Carl Icahn owns 100% of Icahn Enterprises GP, the general partner of Icahn Enterprises and Icahn Enterprises Holdings, and approximately 95% of Icahn Enterprises’ outstanding shares.

On May 8th, 2024, the partnership reported its Q1 results for the period ending March 31st, 2024. For the quarter, revenues came in at $2.5 billion, 5.3% lower year-over-year, while the loss per unit was $0.09, versus a loss per unit of $0.75 in Q1-2023.

Click here to download our most recent Sure Analysis report on IEP (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #6: AGNC Investment Corporation (AGNC) – P/E ratio of 4.6

American Capital Agency Corp is a mortgage real estate investment trust that invests primarily in agency mortgage–backed securities (or MBS) on a leveraged basis.

The firm’s asset portfolio is comprised of residential mortgage pass–through securities, collateralized mortgage obligations (or CMO), and non–agency MBS. Many of these are guaranteed by government–sponsored enterprises.

AGNC Investment’s first-quarter non-GAAP earnings continued their downward trend amid the company’s operation in a higher interest rate environment.

Source: Investor Presentation

Q1 net spread and dollar roll income per share of $0.58, slightly surpassing expectations, declined from previous quarters.

The quarter’s earnings excluded an estimated “catch-up” premium amortization benefit. Tangible net book value per common share increased to $8.84, although the economic return on tangible common equity declined.

Click here to download our most recent Sure Analysis report on AGNC Investment Corp (AGNC) (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #7: Organon & Co. (OGN) – P/E ratio of 4.7

Organon & Co. is a global healthcare company dedicated to the improvement of women’s health and well-being. Established in 2021 as a spinoff from Merck & Co. (MRK), Organon focuses on providing a broad range of healthcare solutions through its diverse portfolio, which includes contraceptives, fertility treatments, and a range of established medicines.

The company operates in over 140 countries, leveraging its deep expertise and innovation in women’s health to address unmet medical needs and support long-term health outcomes.

Source: Investor Presentations

On August 6th, 2024, Organon announced second quarter results for the period ending June 30th, 2024. For the quarter, revenue of $1.61 billion was unchanged from the prior year, but was $10 million below expectations.

Adjusted earnings per-share of $1.12 compared unfavorably to $1.31 in the prior year, but was $0.04 ahead of estimates. Excluding the impact of currency exchange, revenue grew 2% for the year.

Click here to download our most recent Sure Analysis report on Organon (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #8: City Office REIT (CIO) – P/E ratio of 4.7

City Office REIT is an internally-managed real estate investment trust focused on owning, operating, and acquiring high quality office properties located in “18-hour cities” in the Southern and Western United States.

Its target markets possess a number of attractive demographic and employment characteristics, which the trust believes will lead to capital appreciation and growth in rental income at its properties.

At its most recent filing, City Office REIT owned 23 properties comprising of 56 office buildings with a total of approximately 5.6 million square feet of net rentable area that were approximately 84.5% leased.

On August 1st, 2024, City Office REIT reported its Q2 results for the period ending June 30th, 2024. For the quarter, rental and other revenues were $42.3 million, down 5.1% year-over-year. Renewal cash rents increased 4.3% as compared to expiring cash rents, but rental revenues fell due to recent property disposals.

Same-Store Cash NOI (Net Operating Income) fell by 2.0% as compared to Q2-2023. Further, due to higher interest expenses, FFO fell by 21% to $10.4 million. On a per-share basis, FFO came in at $0.25 compared to $0.32 last year. At the end of the quarter, occupancy stood at 83% at the end of the quarter, stable sequentially.

Click here to download our most recent Sure Analysis report on CIO (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #9: ARMOUR Residential REIT (ARR) – P/E ratio of 4.8

ARMOUR Residential invests in residential mortgage-backed securities that include U.S. Government-sponsored entities (GSE) such as Fannie Mae and Freddie Mac.

It also includes Ginnie Mae, the Government National Mortgage Administration’s issued or guaranteed securities backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans.

Unsecured notes and bonds issued by the GSE and the US Treasury, money market instruments, and non-GSE or government agency-backed securities are examples of other types of investments.

ARMOUR’s first-quarter 2024 results showed GAAP net income available to common stockholders of $11.5 million or $0.24 per common share, with net interest income amounting to $5.3 million.

Distributable Earnings available to common stockholders stood at $40.4 million, representing $0.82 per common share. The company paid common stock dividends of $0.24 per share per month or $0.72 per share for the first quarter.

Click here to download our most recent Sure Analysis report on ARMOUR Residential REIT Inc (ARR) (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #10: Energy Transfer LP (ET) – P/E ratio of 5.3

Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the United States.

Operations include natural gas transportation and storage along with crude oil, natural gas liquids, refined product transportation, and storage totaling 83,000 miles of pipelines.

Energy Transfer operates with a primarily fee-based model, which somewhat mitigates the sensitivity of the MLP to commodity prices.

Source: Investor Presentation

In early May, Energy Transfer reported (5/8/24) financial results for the first quarter of fiscal 2024. It grew its volumes in all the segments and achieved record crude oil transportation volumes.

As a result, distributable cash flow grew 17% over the prior year’s quarter. Energy Transfer posted a healthy distribution coverage ratio of 2.2x for the quarter.

Click here to download our most recent Sure Analysis report on ET (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #11: TriplePoint Venture Growth BDC (TPVG) – P/E ratio of 5.3

TriplePoint Venture Growth BDC Corp specializes in providing capital and guiding companies during their private growth stage, before they eventually IPO to the public markets.

Source: Investor Presentation

On May 1st, 2024, the company posted its Q1 results. For the quarter, total investment income of $29.3 million compared to $33.6 million in Q1-2023.

The decrease in total investment was primarily due to a lower weighted average principal amount outstanding on the BDC’s income-bearing debt investment portfolio. The number of portfolio companies fell from 59 last year to 49.

The company’s weighted average annualized portfolio yield came in at 15.4% for the quarter, up from 14.7% in the prior-year period.

Also during Q1, the company funded $13.5 million in debt investments to three portfolio companies with a 14.3% weighted average annualized yield at origination.

Click here to download our most recent Sure Analysis report on TPVG (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #12: Brandywine Realty Trust (BDN) – P/E ratio of 5.4

Brandywine Realty owns, develops, leases and manages an urban town center and transit-oriented portfolio which includes 163 properties in Philadelphia, Austin, and other cities.

The REIT generates most of its operating income in Pennsylvania, with the remainder in Austin, TX and various other markets.

Source: Investor Presentation

On 4/17/24, Brandywine Realty Trust reported results for the first quarter of fiscal 2024. Occupancy fell sequentially from 88.0% to 87.7% and funds from operations (FFO) per share fell -11%, from $0.27 to $0.24.

It was the sixth quarter in a row in which the impact of high interest rates on interest expense was evident. Interest expense grew 11% year-over-year. As the REIT faces debt maturities, it has to issue new debt at high interest rates.

Click here to download our most recent Sure Analysis report on BDN (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #13: Lincoln National Corp. (LNC) – P/E ratio of 5.4

Lincoln National Corporation offers life insurance, annuities, retirement plan services and group protection. The corporation was founded in 1905.

Lincoln National reported second quarter 2024 results on August 1st, 2024, for the period ending June 30th, 2024. The company generated net income of $5.11 per share in the quarter, which compared favorably to $2.94 in the second quarter of 2023. Adjusted income from operations equaled $1.84 per share compared to $2.02 in the same prior year period.

Additionally, annuities average account balances rose by 6.8% to $158 billion and group protection insurance premiums grew 2.8% to $1.3 billion.

Click here to download our most recent Sure Analysis report on LNC (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #14: Ford Motor Co. (F) – P/E ratio of 5.5

Ford Motor Company was first incorporated in 1903 and in the past 120 years, it has become one of the world’s largest automakers. It operates a large financing business as well as its core manufacturing division, which produces a popular assortment of cars, trucks, and SUVs. Ford could produce $170+ billion in revenue this year and it trades with a $40 billion market capitalization.

Ford posted second quarter earnings on July 24th, 2024, and results were significantly weaker than expected. Adjusted earnings-per-share came to 47 cents, which was 21 cents worse than expected. Automotive revenue was $44.81 billion, which was up 5.6% year-on-year, but $70 million lower than expected.

The company’s margins eroded in the second quarter as increased warranty costs and losses associated with its unsuccessful EV division. Management noted the company is working to improve quality and reduce complexity, which should help over time to rebuild margins.

Commercial sales were up 2.9%, but adjusted EBIT plummeted from $2.8 billion to $1 billion year-over-year. Adjusted free cash flow was up $300 million to $3.2 billion. Sales of hybrid vehicles rose 34% year-over-year, or 9% of total volume globally.

Click here to download our most recent Sure Analysis report on Ford Motor (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #15: Great Elm Capital (GECC) – P/E ratio of 5.8

Great Elm Capital Corporation is a business development company that specializes in loan and mezzanine, middle market investments.

It seeks to create long-term shareholder value by building its business across three verticals: Operating Companies, Investment Management, and Real Estate.

The company favors investing in media, healthcare, telecommunication services, communications equipment, commercial services and supplies.

Source: Investor Presentation

In the 2024 first quarter, Great Elm Capital reported total investment income of $1.03 per share. However, GECC also reported net realized and unrealized losses of approximately $3.7 million, or $0.42 per share, during this period.

GECC deployed approximately $64.2 million into 29 investments at a weighted average current yield of 12.5% during the quarter.

Click here to download our most recent Sure Analysis report on GECC (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #16: Piedmont Office Realty Trust (PDM) – P/E ratio of 5.9

Piedmont Office Realty Trust, Inc. owns, manages, develops, redevelops, and operates high-quality office properties located primarily in sub-markets within seven major Eastern U.S. office markets.

The company derives most of its revenues from U.S. government entities, business services companies, and financial institutions in the Sunbelt region. PDM is fully integrated and self-managed. The company has local management offices in each of their markets.

On July 26th, 2023, Piedmont Office Realty slashed its quarterly dividend by 41% to $0.125, as increased interest expense weighed heavily on its results.

On July 31st, 2024, Piedmont reported second quarter 2024 results. The company reported core funds from operations (FFO) of $0.37 per share for the quarter, an 18% decrease compared to last year’s results in the second quarter, mostly due to an increase in interest expense.

PDM saw a 3.7% increase in same store net operating income on an accrual basis during Q2. The company leased 1.04M square feet in the quarter, including 404K square feet of new tenant leasing. As of June 30th, 2024, roughly 1.6 million square feet of executed leases were yet to commence or under rental abatement.

Click here to download our most recent Sure Analysis report on Piedmont Office (PDM) (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #17: Sachem Capital (SACH) – P/E ratio of 5.9

Sachem Capital Corp is a Connecticut-based real estate finance company that specializes in originating, underwriting, funding, servicing, and managing a portfolio of short-term (i.e., three years or less) loans secured by first mortgage liens on real property located primarily in Connecticut.

Each of Sachem’s loans is personally guaranteed by the principal(s) of the borrower, which is typically collaterally secured by a pledge of the guarantor’s interest in the borrower. Sachem generates around $65 million in total revenues.

Source: Investor Presentation

On April 1st, 2024, Sachem Capital Corp. announced its full-year results for the period ending December 31st, 2023. Total revenues for the year came in at $65.6 million, up 25.5% compared to FY-2022.

Revenue growth was driven by growth in size of the company’s mortgage portfolio and increases in rates charged to borrowers.

Click here to download our most recent Sure Analysis report on SACH (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #18: Alliance Resource Partners LP (ARLP) – P/E ratio of 6.0

Alliance Resource Partners is the second–largest coal producer in the eastern United States. Its primary operations are producing and marketing coal to major domestic and international utility users.

However, the company also owns mineral and royalty interests in premier oil & gas regions, like the Permian, Anadarko, and Williston Basins.

Finally, the company provides terminal services, including transporting and loading coal and technology products and services.

Source: Investor Presentation

On April 27th, 2024, Alliance Resource Partners reported its Q1 and full year results. For the quarter, revenues declined by 1.7% year-over-year to $651.7 million.

Lower revenues were primarily the result of lower average coal sales prices, partially offset by higher oil & gas royalties and other revenues. Net income came in at $158.1 million, or $1.21 per unit, compared to $191.2 million, or $1.45 per unit last year.

Click here to download our most recent Sure Analysis report on ARLP (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #19: Xerox Holding (XRX) – P/E ratio of 6.0

Xerox is a technology company that designs, develops, and sells a wide range of business solutions in the United States and around the world.

Its offerings include color and multi-function printers, digital printing presses, digital services for workflow automation, content management solutions, and more.

From a relatively hardware-focused company, Xerox has developed into a more diversified enterprise over time, adding software and services segments via organic expansion and acquisitions.

As a result, non-equipment revenue contributes most of Xerox’s sales today:

Source: Investor Presentation

In the most recent quarter, Xerox reported revenues of $1.5 billion, which was a 12.4% decrease year-over-year and lower by 13.2% in constant currency. Foreign exchange translations helped the top-line by 80 basis points on a reported basis.

Click here to download our most recent Sure Analysis report on XRX (preview of page 1 of 3 shown below):

Undervalued High Dividend Stock #20: Clipper Realty (CLPR) – P/E ratio of 6.2

Clipper Properties owns commercial (primarily multifamily and office with a small sliver of retail) real estate across New York City.

For the first quarter ending March 31, 2024, CLPR reported record quarterly revenue of $35.8 million and income from operations reaching $9.1 million, alongside record net operating income (NOI) of $20.2 million.

Despite this, the company reported a quarterly net loss of $2.7 million, though adjusted funds from operations (AFFO) stood strong at $5.9 million.

Revenue increased by $2.1 million, driven by higher rental rates across residential properties. However, commercial income slightly decreased due to expiring leases.

The net loss for the quarter improved compared to the previous year, primarily due to factors like increased rental revenue and lower real estate taxes.

Click here to download our most recent Sure Analysis report on CLPR (preview of page 1 of 3 shown below):

Final Thoughts

All the above stocks are trading at remarkably cheap valuation levels due to some business headwinds. Some of them have been hurt by high inflation or the latest economic slowdown whereas others are facing their own specific issues.

Moreover, all the above stocks are offering dividend yields above 5%. Thus, they make it much easier for investors to wait patiently for the business headwinds to subside.

If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:

High-Yield Individual Security Research

Other Sure Dividend Resources

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