In this article, we will take a look at some of the most undervalued dividend stocks to buy according to Wall Street Analysts.
Investors often face the choice between putting their money into growth stocks or value stocks. Historically, both approaches have delivered similar overall performance, but long-term studies suggest that value investing has provided greater benefits.
Research by Josef Lakonishok, Andrei Shleifer, and Robert W. Vishny, published in the Journal of Finance, found that value-oriented strategies generally produce higher returns. Their study covering April 1968 to April 1990 showed that strategies focused on buying undervalued stocks consistently outperformed those targeting trendy or high-flying growth stocks.
The study also highlighted that value stocks usually offer higher dividend yields and stronger fundamental metrics compared with growth stocks.
Even in today’s market, value investing remains popular among both experienced and new investors. Snowflake CEO Sridhar Ramaswamy recently made the following comment:
“My focus very much is on value creation. We have to earn dollars, every single dollar at a time, so we are focused on the quarter, focused on the year, but, much more, also on the value that we create with customers, or the long term, the stock market will settle itself.”
Given this, we will take a look at some of the most undervalued dividend stocks.
Our Methodology:
For this article, we screened for stocks with forward P/E ratios below 30, which typically indicates that the company’s stock price is relatively low compared to its earnings per share (EPS). From that list, we picked dividend companies with a projected upside potential of over 10% based on analyst price targets, as of October 29. 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).
13. CVS Health Corporation (NYSE:CVS)
Upside Potential as of October 29: 10.12%
Forward P/E Ratio: 10.72
CVS Health Corporation (NYSE:CVS) is a diversified healthcare company that runs pharmacies and retail stores while offering various health services, such as prescription management, vaccinations, and diagnostic testing.
On October 24, UBS increased its price target on CVS Health Corporation (NYSE:CVS) from $79 to $96 and reiterated a Buy rating on the stock.
In its third-quarter 2025 earnings report, CVS Health Corporation (NYSE:CVS) posted revenues of $102.8 billion, marking a 7.8% increase compared to the previous year. The company generated $7.2 billion in cash flow from operations year-to-date and updated its full-year guidance to a range of $7.5 billion to $8.0 billion, up from the earlier estimate of at least $7.5 billion.
CVS Health Corporation (NYSE:CVS) is also recognized for its consistent dividend payments, having distributed regular dividends to shareholders since 1997. The company offers a quarterly dividend of $0.665 per share and has a dividend yield of 3.30%, as of October 29.
12. Consolidated Edison, Inc. (NYSE:ED)
Upside Potential as of October 29: 10.21%
Forward P/E Ratio: 16.26
Consolidated Edison, Inc. (NYSE:ED) is a utility company that delivers electricity, gas, and steam to customers across the New York City area. It serves approximately 3.7 million electric and 1.1 million gas customers and operates the largest steam system in the United States.
On October 27, Wells Fargo analyst Shahriar Pourreza began coverage of Consolidated Edison, Inc. (NYSE:ED) with an Equal Weight rating and a $99 price target. The firm initiated coverage on the broader power and utilities sector with 19 Overweights and 14 Equal Weights. The firm noted a preference for companies with growth prospects “actually driving earnings higher” or those trading at valuations “not necessarily reflecting fundamentals.”
Wells Fargo added that utilities are “materially undervalued” amid a “perfect storm of tailwinds” that is “much more structural in nature than cyclical.”
On October 16, Consolidated Edison, Inc. (NYSE:ED) announced a quarterly dividend of $0.85 per share, consistent with its previous payout. The company has now increased its dividend for 51 consecutive years. The stock supports a dividend yield of 3.51%, as of October 29.
