10 Top-Performing Undervalued Dividend Stocks for 2025
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Investors looking for consistent income and long-term growth often focus on dividend-paying stocks. Undervalued dividend stocks, in particular, combine attractive payouts with the potential for capital appreciation.
To help you find the best dividend stocks for 2025, we applied key criteria:
- Dividend Yield: Stocks offering competitive yields above 3% to maximize income potential.
- Dividend Cash Payout Ratio: Businesses with sustainable and positive payout ratios.
- DPS 3-Year CAGR: Companies with positive dividend growth over the past 3 years.
- Intrinsic Value: Using a Discounted Cash Flow (DCF) analysis, we estimate future free cash flow to calculate Intrinsic Enterprise Value. By subtracting cash, investments, and debt, then dividing by outstanding shares, we identify stocks trading below their DCF Value, signaling potential upside.
The following 10 stocks offering dividends meet all these criteria. While past performance isn’t a guarantee of future results, these stocks that pay dividends are great options for income-focused and value-conscious investors.
10 Top-Performing Undervalued Dividend Stocks:
TotalEnergies SE
TotalEnergies SE (TTE) shines with its 5.99% dividend yield, backed by a prudent payout ratio of 46.87%. This energy giant not only offers a substantial dividend of $3.32 per share but also signals strong financial health and a commitment to rewarding shareholders. It has a Value Sense quality rating of 4.7.
EOG Resources
EOG Resources, Inc. (EOG), a leader in the energy sector, offers a solid 3.08% dividend yield, with an impressively conservative payout ratio of 31.46%. EOG’s dividend of $3.90 per share reflects its robust operational efficiency and shareholder-friendly policies. It boasts a Value Sense quality rating of 6.4.
Dollar General Corporation
Dollar General Corporation (DG) is noted for its consistent performance and strong growth prospects, boasting a dividend yield of 3.11% and a three-year compound annual growth rate (CAGR) in dividends of 13.36%. With a payout ratio of 38.84%, it reassures investors of its financial stability and upward trajectory. Its Value Sense quality rating is 4.1.
Molson Coors Beverage Company
Molson Coors Beverage Company (TAP) maintains a steady 3.08% yield, complemented by a moderate payout ratio of 39.17%. The company’s dividend growth is impressive, with a three-year CAGR of 72.00%, highlighting its potential for long-term value creation. It has a Value Sense quality rating of 5.0.
ICL Group
ICL Group Ltd (ICL) offers a compelling 4.19% dividend yield, which is a testament to its robust payout strategy and its commitment to delivering shareholder value. It carries a Value Sense quality rating of 5.0.
LCI Industries
LCI Industries (LCII) stands out with a 4.40% dividend yield and a healthy payout ratio of 82.00%, reflecting its solid financial foundation and commitment to growth. It has a Value Sense quality rating of 5.6.
Kennametal
Kennametal Inc. (KMT) offers a moderate 3.15% dividend yield, showcasing its steady performance in the industrial sector and its focus on maintaining a balanced approach to shareholder returns. It has a Value Sense quality rating of 5.0.
Deluxe Corporation
Deluxe Corporation (DLX) offers a robust 5.22% yield, indicative of its strong commitment to returning value to its shareholders, despite a challenging market environment. It has a Value Sense quality rating of 5.3.
Superior Group of Companies
Superior Group of Companies, Inc. (SGC), with a 3.50% dividend yield, demonstrates its ability to maintain a steady return to shareholders, underscored by a focused operational strategy. It has a Value Sense quality rating of 5.3.
Entravision Communications Corporation
Entravision Communications Corporation (EVC), with an impressive 9.52% dividend yield, stands out for its exceptional return to shareholders, supported by a moderate payout ratio of 37.00%. This highlights its efficiency and robust financial management. It has a Value Sense quality rating of 5.2.
For investors seeking opportunities, our analytics team provides comprehensive lists of undervalued companies where the intrinsic value suggests potential undervaluation, combining fundamental analysis with quality metrics:
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FAQ
What factors determine whether a dividend stock is undervalued?
Several key criteria help in identifying undervalued dividend stocks:
- Dividend Yield: A competitive yield above 3% ensures significant income potential.
- Dividend Cash Payout Ratio: A sustainable and positive ratio indicates that the company can continue paying dividends without jeopardizing its financial health.
- 3-Year Dividend Per Share (DPS) CAGR: A positive three-year compound annual growth rate signals consistent dividend growth.
- Intrinsic Value Analysis: Using a Discounted Cash Flow (DCF) approach, stocks trading below their intrinsic value suggest potential upside.
Which companies in the rating have the best dividend yield?
Among the top 10 dividend stocks listed, Entravision Communications Corporation (EVC) offers the highest dividend yield at 9.52%, followed by TotalEnergies SE (TTE) with a yield of 5.99%, and Deluxe Corporation (DLX) with a yield of 5.22%. These high yields make them attractive for income-focused investors.
Which companies show the highest dividend growth over the last 3 years?
The companies with the highest Dividend Per Share (DPS) 3-Year CAGR are:
- Molson Coors Beverage Company (TAP): 72.00% CAGR
- Dollar General Corporation (DG): 13.36% CAGR
These companies demonstrate an impressive commitment to increasing shareholder value over time.
Which companies in the rating have been assigned the highest Value Sense quality rating?
The companies with the highest Value Sense quality ratings, indicating overall financial health and stability, are:
- EOG Resources, Inc. (EOG): 6.4
- LCI Industries (LCII): 5.6
- Deluxe Corporation (DLX) and Superior Group of Companies, Inc. (SGC): Both scored 5.3
These ratings reflect a combination of financial strength, sustainable dividends, and potential for long-term growth.
