In this article, we will take a look at some of the best growing dividend stocks with low P/E ratios.
Value stocks are enjoying a rare period of strength amid this year’s broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold.
The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That’s a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart.
Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven’t lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing:
“The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.”
According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase.
Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence.
Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O’Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement:
“Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won’t correct.”
Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes, pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018.
Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn. Given this, we will take a look at some of the best growing dividend stocks with low P/E ratios.
Our Methodology
For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios.
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30. Philip Morris International Inc. (NYSE:PM)
Forward P/E Ratio as of April 22: 22.88
Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company. The company has made strides in expanding its product offerings, particularly with the development of Iqos—its heat-not-burn tobacco devices—which have captured notable market share in key regions such as Japan. The company has also secured the U.S. sales rights for Iqos from Altria, marking a significant move in its global strategy.
Another area of growth has been Zyn, the oral nicotine pouch brand acquired through its purchase of Swedish Match. Due to rising demand, Philip Morris is scaling up Zyn production to meet consumer needs. The stock is grabbing investor attention this year as it is up by over 35% since the start of 2025.
In the fourth quarter of 2024, Philip Morris International Inc. (NYSE:PM) posted strong results, with revenue increasing 7.3% year-over-year to $9.7 billion and operating income climbing 14.8% to $3.3 billion. The company’s shift toward smoke-free products continues to gain traction, with combined shipments of heated tobacco and oral nicotine products exceeding 40 billion units in a single quarter for the first time.
On March 6, Philip Morris International Inc. (NYSE:PM) announced a quarterly dividend of $1.35 per share, maintaining the previous payout. The company has now increased its dividend for 15 consecutive years, which makes it one of the best growing dividend stocks. The stock also offers an attractive dividend yield of 3.29%, as of April 22.
29. International Business Machines Corporation (NYSE:IBM)
Forward P/E Ratio as of April 22: 21.88
International Business Machines Corporation (NYSE:IBM) is an American multinational tech company commonly known as Big Blue. The stock has surged by nearly 10% since the start of 2025 because of its exceptional Q4 2024 earnings and recent developments related to cloud computing. The company has recently partnered with Amazon and its cloud arm, Amazon Web Services (AWS), to open a cloud computing research center in Romania. This initiative enhances both companies’ presence in the growing European market while tapping into the region’s skilled engineering workforce.
For International Business Machines Corporation (NYSE:IBM), any deepening of its relationship with Amazon is a positive development, as the tech giant depends on IBM’s consulting expertise to handle AWS contracts across the globe.
International Business Machines Corporation (NYSE:IBM)’s quantum computing division has also made meaningful strides in recent years. Since 2017, the company’s IBM Quantum services have generated nearly $1 billion in cumulative revenue. This growth reflects the early success of its approach, which blends superconducting qubit hardware, hybrid-cloud functionality, and the open-source Qiskit platform. Looking ahead, IBM plans to build on this momentum with a roadmap aimed at enhancing error correction and overall system reliability.
On the financial side, International Business Machines Corporation (NYSE:IBM) delivered solid results in 2024, posting $13.4 billion in operating cash flow and $12.7 billion in free cash flow. In the fourth quarter alone, the company returned $1.5 billion to shareholders through dividend payments. Currently, it pays a quarterly dividend of $1.37 per share and has a dividend yield of 2.77%, as recorded on April 22. It is one of the best growing dividend stocks on our list as the company has raised its payouts for 29 consecutive years.
28. Atmos Energy Corporation (NYSE:ATO)
Forward P/E Ratio as of April 22: 21.74
Atmos Energy Corporation (NYSE:ATO) ranks 28th on our list of the best growing dividend stocks with low P/E ratios. The Texas-based natural gas distribution company focuses on providing safe and reliable natural gas services and invests heavily in infrastructure upgrades and safety programs. In the first quarter of 2025, the company reported revenue of $1.1 billion, up 1.5% from the same period last year. Its net income came in at $352 million, up from $311 million in the prior-year period.
Atmos Energy Corporation (NYSE:ATO)’s cash position also came in strong. The company ended the quarter with $584.5 million available in cash and cash equivalents, up from $307.3 million in the prior-year period. Its operating cash flow of $282 million also grew from $245.3 million in the same quarter last year. Due to this cash position, the company has raised its payouts for 41 consecutive years. Its quarterly dividend comes in at $0.87 per share and has a dividend yield of 2.17%, as of April 22.
The number of hedge funds tracked by Insider Monkey owning stakes in Atmos Energy Corporation (NYSE:ATO) grew to 31 in Q4 2024, up from 20 in the previous quarter. The consolidated value of these stakes is nearly $322 million. Among these hedge funds, Citadel Investment Group was the company’s leading stakeholder in Q4.
27. Johnson Controls International plc (NYSE:JCI)
Forward P/E Ratio as of April 22: 20.7
Johnson Controls International plc (NYSE:JCI) is an Ireland-based multinational conglomerate that specializes in building technologies and solutions and also offers energy storage solutions. The company is well-positioned for future revenue growth, thanks to its HVAC systems and building automation solutions that help clients boost energy efficiency and lower emissions, key steps toward achieving net-zero targets. The company’s OpenBlue technology platform also plays a central role by using artificial intelligence, advanced analytics, and IoT to optimize building operations in real time. On top of that, demand for its HVAC offerings is surging in the data center sector, driven by the expanding use of AI technologies.
In the first quarter of fiscal 2025, Johnson Controls International plc (NYSE:JCI) reported $5.4 billion in sales, marking a 4% increase year-over-year on a reported basis and a 10% gain organically. GAAP income from continuing operations reached $363 million, while adjusted income totaled $426 million. Excluding the impact of acquisitions and foreign exchange, the company saw an 18% increase in orders compared to the previous year, and its order backlog grew 12%, reaching $9.3 billion.
Johnson Controls International plc (NYSE:JCI) also maintained a healthy cash position, generating $249 million in operating cash flow and $133 million in free cash flow. On an adjusted basis, free cash flow stood at $603 million. During the quarter, it returned $245 million to shareholders through dividend payments. It offers a quarterly dividend of $0.37 per share and has a dividend yield of 1.93%, as of April 22. The company has remained committed to its shareholder value and has never missed a dividend in 137 years.
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