In this article, we will take a look at some low P/E high dividend stocks to invest in.
A low price-to-earnings (P/E) ratio often indicates that a stock may be undervalued compared to its earnings, which makes it appealing to investors who want to buy into a company at a fair price relative to its profit potential. Stocks that combine a low P/E ratio with solid dividend payouts tend to attract those seeking both value and income.
Historically, such stocks have delivered strong performance. A report from Heartland Advisors pointed out that companies with low P/E ratios have generally outperformed the broader market while offering investors less downside risk than many other equity strategies.
Looking ahead to 2026, Strategas Securities’ technical strategist Todd Sohn and Allspring Global Investments’ senior portfolio manager Bryant VanCronkhite both believe it makes sense for investors to start shifting their focus toward value-oriented opportunities. Sohn mentioned that while these stocks may not make up the bulk of a portfolio, the areas of the market that have not participated in recent gains and have been stuck in narrow trading ranges for years now offer attractive potential. He added that this situation “leaves us with lots of opportunities outside of tech.” Given this, we will take a look at some of the best dividend stocks.
Photo by nathan dumlao on Unsplash
Our Methodology
To compile this list, we filtered for dividend stocks with a forward P/E ratio below 25 and dividend yields exceeding 4% as of October 14. From that group, we chose companies with a proven track record of consistently paying dividends to their shareholders. Next, we further refined our selection criteria by identifying stocks with a projected upside potential of over 10% based on analyst price targets, as of October 14. The stocks are ranked according to their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. The Clorox Company (NYSE:CLX)
Analyst Upside Potential as of October 14: 10.01%
The Clorox Company (NYSE:CLX) manufactures and markets a wide range of consumer and professional products. While it has long been a favorite among investors, its appeal seems to have waned lately.
On October 10, JPMorgan analyst Andrea Teixeira reduced the firm’s price target for The Clorox Company (NYSE:CLX) from $135 to $127 while maintaining a Neutral rating. In Q3 outlook for the household, personal care, and beauty sector, she noted that many large-cap firms in this space are expected to post another weak quarter due to subdued consumer demand in the US and slowing trends across Western Europe. The situation is being made worse as retailers continue to scale back their inventories.
Even so, The Clorox Company (NYSE:CLX) dividend record remains a bright spot. The company has raised its dividend for 22 straight years and reported solid cash flow in 2024, with net cash from operations reaching $981 million, up 41% from $695 million in the prior fiscal year. It currently offers a quarterly dividend of $1.24 per share and has a dividend yield of 4.16%, as of October 14.
10. Kimberly-Clark Corporation (NASDAQ:KMB)
Analyst Upside Potential as of October 14: 10.7%
Kimberly-Clark Corporation (NASDAQ:KMB) is one of the best dividend stocks with a low P/E and a high dividend yield.
On October 9, Jefferies began covering Kimberly-Clark Corporation (NASDAQ:KMB) with a Hold rating and a price target of $130. The firm highlighted that the company has tripled its natural gas backlog since 2023 and holds significant exposure to LNG and Southeast power demand, both seen as positive drivers for the company.
Even so, Jefferies noted that much of this optimism already appears reflected in the stock’s valuation, which trades at about 10.5 times its projected FY2028 EV/EBITDA, compared to the industry average of roughly 9 times. The firm implied that stronger drivers of growth would be required to support a more optimistic stance.
That said, Kimberly-Clark Corporation (NASDAQ:KMB)’s dividend remains one of its strongest appeals. The company has increased its dividend for 52 straight years and currently offers a yield of 4.19%. It currently pays a quarterly dividend of $1.26 per share.
Kimberly-Clark Corporation (NASDAQ:KMB) is a global consumer goods company known for its everyday disposable products such as diapers, tissues, and paper towels. Its popular brands are sold in over 175 countries through major retailers, supermarkets, and online platforms.
9. Franklin Resources, Inc. (NYSE:BEN)
Analyst Upside Potential as of October 14: 12.48%
Franklin Resources, Inc. (NYSE:BEN) operates as a holding company that provides investment management and related financial services through several well-known brands. The firm has recently drawn attention from analysts, who see a potential upside of around 13% in the stock.
On October 3, BMO Capital Markets recently began coverage of Franklin Resources, Inc. (NYSE:BEN) with an Outperform rating and a $26 price target, citing the company’s strong core business and growing alternatives platform as key strengths. The firm noted that Franklin’s net flows outside of Western Asset Management (WAM) have been robust, and fundraising activity at Lexington continues to show solid momentum.
Along with its business fundamentals, Franklin Resources, Inc. (NYSE:BEN)’s dividend performance remains a major highlight. The company has increased its dividend for 49 consecutive years, making it one of the more reliable dividend payers in the sector.
In addition, on October 3, Franklin Resources, Inc. (NYSE:BEN) reported preliminary month-end assets under management (AUM) of $1.66 trillion as of September 30, 2025, up from $1.64 trillion at the end of August. The monthly change reflected favorable market conditions, partially offset by long-term net outflows of $11 billion, which included $13 billion in outflows from WAM. Excluding that unit, the firm recorded $2 billion in long-term net inflows.
Hedge Fund Resource Center