6 Undervalued Dividend Stocks With Yields of 2% or More Worth Buying

These undervalued dividend stocks are bargains based on their valuations. Investors in these stocks will be paid to wait, with returns of up to 2% or more.

Most of these companies have yields above 2%, as well as good prospects for earnings, cash flow and/or sales in the future. They also trade with cheap valuations based on earnings or price-to-sales ratio.

Therefore, investors might want to invest in many of these undervalued dividend stocks. This will allow investors to diversify the earnings growth and yield aspects of their portfolios. A little diversification goes a long way in simultaneously ensuring the stability and upside outlook of an investor’s portfolio.

Let’s dive in and watch these actions.

CROC Diamondback Energy $154.42
VOV Ovintiv $57.60
GS Goldman Sachs $318.95
CVE Cenovus Energy $23.90
HRD H&R block 36.09
NVDA Nvidia $186.71

Undervalued Dividend Stock: Diamondback Energy (FANG)

Source: Pavel Kapysh / Shutterstock.com

Dividend yield: 1.8%

Diamondback Energy (NASDAQ:CROC) is an oil and gas company with assets in the Permian Basin in West Texas. The operator has very good prospects for earnings, cash flow and dividend payout.

As of June 3, FANG stock was trading at $154.42, putting it on a dividend yield of 1.8%. This is based on its annual dividend payment of $2.80. It is much less than the industry average of 2.79%according TipRanks, but its payout ratio is well below 40%, which is typical of oil and gas stocks.

Additionally, analysts expect the company to produce $25.18 in earnings per share (EPS) this year and $22.29 next year. This proves that its $2.80 dividend is easily covered by earnings and, in fact, leaves plenty of room for the dividend to grow.

It also shows that even for 2023, FANG stock is on a cheap forward P/E of just 6.9x. As a result, this stock is probably too cheap. For example, if we estimate its payout ratio at 40%, the dividend would be $8.92. Then, using a dividend yield of 2.79%, the target stock price would be approximately $320 per share. That’s a healthy 107% upside from today’s price.

Ovintiv (OVV)

Ovintiv logo on a phone screen.  OVV stock.

Source: rafapress / Shutterstock

Dividend yield: 1.7%

Ovintiv (NYSE:VOV) is a major oil and gas producer based in Denver, CO. Its EPS is expected to increase by 33.3% compared to $10.75 per share in 2022 at $14.33 in 2023.

At $57.60 on June 3, Ovintiv has a forward P/E of just 4.02 times forward earnings for 2023. Additionally, the company pays an annual dividend of $1. This gives it a decent dividend yield of 1.7%. Ovintiv paid a dividend every year for 32 years and has increased it every year for four years.

Ovintiv has been buying back its shares for two quarters. It bought $182 million in the past six months ending March 2022. On an annualized basis, that’s 1.21% of its $14.9 billion value.

Goldman Sachs (GS)

Goldman Sachs (GS) logo displayed on a smartphone against a multicolored background.

Source: Volodymyr Plysiuk / Shutterstock.com

Dividend yield: 2.5%

Commercial bank stocks Goldman Sachs (NYSE:GS) is a very inexpensive investment. For example, analysts predict an average of 2022 EPS of $37.76, putting him on a forward P/E of 8.4. This is based on its price of $318.95 as of June 3.

Additionally, the P/E multiple drops to 7.9x based on a 2023 EPS forecast of $40.33. This represents earnings growth of 6.8% between the two years.

Goldman Sachs also pays an annual dividend of $8 per share, giving it a dividend yield of 2.5%. The bank paid dividends for last 22 years.

Goldman Sachs is very shareholder friendly. In the last quarter alone, it repurchased $2 billion of its stock. This makes it one of the best cheap stocks to buy.

Cenovus Energy (CVE)

an engineer wearing a helmet overlooks an oil production platform

Source: Shutterstock

Dividend yield: 1.4%

Cenovus Energy (NYSE:CVE) is an oil and gas company based in Calgary, Canada, which will post 10% growth next year according to analysts’ expectations. They expect EPS to rise from $2.86 at $3.15 per share in 2023.

At $23.90 as of June 3, CVE stock is trading at a forward P/E of just 7.6x based on its 2023 earnings projections. That’s cheap for a company with these solids. earnings growth outlook of 10%.

In addition, Cenovus pays a variable dividend each quarter. Recently he declared a Canadian dividend of 10.5 cents for Q2. Annually, this equates to approximately 33 US cents, which represents a dividend yield of 1.4%.

But every quarter, the dividend yield will change with the quarterly statement. This makes it one of the most undervalued dividend stocks to buy.

H&R Block (HRB)

Showcase of H&R block in Canada.  HRB action.

Source: TippyTurtle / Shutterstock

Dividend yield: 3%

H&R block (NYSE:HRD) provides do-it-yourself tax preparation software and tax preparation services. He has a very strong mark in this area.

Analysts now predict that this year the company will earn $3.46 per share and $3.68 in 2023. So, at a price of $36.09 on June 3, HRB stock has a forward P/E multiple of 10x.

Given its dividend of $1.08 per share, the stock has a high dividend yield of 3%. In addition, the company has paid a dividend every year since 32 years old.

This should reassure investors that it will continue to pay dividends, even in the face of a severe recession.

Moreover, analysts expect higher profits next year, even in the event of a recession, because after all, everyone has to pay their taxes. Its earnings, earnings and dividends will still be quite strong, making it one of the best stocks to buy during a recession.

Nvidia (NVDA)

Nvidia (NVDA) logo on a stock market laptop screen

Source: FP Creative / Shutterstock.com

Dividend yield: 0.09%

Nvidia (NASDAQ:NVDA) is one of the fastest growing chip stocks that specializes in data centers and gaming devices, including artificial software chips. On May 25, the company reported bumper revenue and profit despite the slowing economy.

For example, its profits increased 49% for one year and up 3% from the previous quarter. Additionally, analysts now expect earnings to reach $6.52 for the year ending January 2024. This is 20% higher than the EPS forecast of $5.45 for the year ending January 2023. This puts the stock at a forward P/E multiple of 29 times.

That’s significantly below its 40x forward P/E average, according to the morning star.

Unfortunately, the stock has a low dividend yield of just 0.09%, well below the average yield of dividend-paying tech stocks. But that means there’s plenty of room for future increases.

As of the date of publication, Mark Hake did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.