We recently published a list of the 10 Cheap Quarterly Dividend Stocks to Buy Now. In this article, we are going to take a look at where U.S. Bancorp (NYSE:USB) stands against other overlooked dividend stocks.

In the current market environment, investors are looking to seek stable income as a way to protect themselves against a possible recession. Business surveys from ISM and S&P Global have highlighted increasing concerns among companies about the impact of new tariffs, with the S&P Global survey projecting an annual GDP growth rate of only around 1% for the first quarter. While most forecasts predict growth of 0.5%, some nowcasting models indicate the possibility of a contraction. Markets are particularly focused on how the US administration will address the growing recession risks, especially regarding its approach to tariffs and trade agreements.

In addition, despite President Donald Trump’s decision to pause a significant tariff increase on multiple countries, Americans continue to fear a recession and rising inflation. Consumer sentiment dropped 8% in April compared to the previous month, reaching a final reading of 52.2, according to the University of Michigan’s latest survey. This level of sentiment marked the fourth-lowest in records dating back to 1952. Joanne Hsu, the survey’s director, made the following comment in the release:

“While this month’s deterioration was particularly strong for middle-income families, expectations worsened for vast swaths of the population across age, education, income, and political affiliation. Consumers perceived risks to multiple aspects of the economy, in large part due to ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead.”

Analysts suggest that investors worried about an economic slowdown might want to consider investing in dividend-stock funds, as these stocks have historically performed relatively well during recessions. Companies that pay dividends usually generate enough excess cash flow to sustain payments year after year. Dividend programs are often seen as a sign of strong financial discipline, as companies committed to paying dividends are generally hesitant to alter their policies. According to a Morningstar report, dividend-paying stocks outperformed the broader market during the recessions that began in July 1981, March 2001, and December 2007, with the stocks doing significantly better in two of those periods. However, they slightly underperformed during the short recession of 1980, which followed the Federal Reserve’s interest rate hikes to control the high inflation of the 1970s.

Within dividend investing, dividend growth stocks have outperformed those with high yields. A Morningstar report noted that dividend growth funds provided the most appealing long-term returns, as seen in the data presented. These funds not only offered the highest total returns but also achieved the best balance of risk and return, as measured by the Sharpe ratio. The report also pointed out that dividend growth strategies have generally performed the best during recessions. Except for 2001, when their greater exposure to technology stocks became a disadvantage, dividend-growth funds performed better than other dividend categories during recent recessionary periods.

Our Methodology

For this list, we screened for dividend companies with strong dividend histories and yields of at least 1%, as of April 27. From that list, we picked dividend stocks with forward P/E ratios below 20, as of April 27. The low price-to-earnings ratio shows that they are traded below their intrinsic value. The stocks are ranked in descending order of their P/E multiples.

At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

U.S. Bancorp (NYSE:USB)

Forward P/E Ratio as of April 27: 9.15

U.S. Bancorp (NYSE:USB) is a Minnesota-based bank holding company. In the first quarter of 2025, the company posted revenue of $6.93 billion, marking a 3.7% increase compared to the same period a year earlier. The result also came in $18.6 million ahead of analysts’ expectations. Net income for the quarter totaled $1.7 billion. The company’s net interest margin reached 2.72%, up 2 basis points from the previous year and 1 basis point higher than the prior quarter.

As of March 31, 2025, U.S. Bancorp (NYSE:USB)’s Common Equity Tier 1 (CET1) capital ratio improved to 10.8%, up from 10.6% at the end of 2024. Average total loans rose by 2.1% year-over-year and by 0.9% on a quarter-over-quarter basis. On March 11, the company announced a quarterly dividend of $0.50 per share, maintaining its previous payout. U.S. Bancorp has a track record of raising its dividend for 14 consecutive years, which makes it one of the best cheap quarterly dividend stocks. The stock has a dividend yield of 5.01%, as of April 27.

At the end of Q4 2024, 48 hedge funds tracked by Insider Monkey held stakes in U.S. Bancorp (NYSE:USB), up from 46 in the previous quarter. These stakes have a consolidated value of over $2.37 billion. With over 24 million shares, Viking Global was the company’s leading stakeholder in Q4.

Overall, USB ranks 4th on our list of the best cheap quarterly dividend stocks. While we acknowledge the potential of USB as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than USB but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

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Disclosure: None. This article is originally published at Insider Monkey.