It’s been hard filtering out the news from the noise in 2019. After the S&P 500 and Nasdaq Composite recently hit all-time highs and rallying about 20% on average since the end of 2018, suddenly more fears have crept into the financial markets and the economy now that the United States and China have traded retaliatory tariffs. And the global growth already was questionable before this trade war broke out. Now investors have to think long and hard about how they want their assets positioned ahead after a 10-year mega-bull market.

One area that investors frequently look to for safety is the so-called value stocks. These companies generally are valued at substantial discounts to the market as a whole, or maybe they are just valued cheaper than their sector peers. Some are cheap based on their share price multiple against earnings, cash flow, EBITDA or even their book value.

One thing that is hard to argue is that a true value stock might not offer real “value” if the underlying company does not or cannot pay a dividend. It’s also hard to use the term “value” if a company’s earnings or core business may be at risk of drying up in a very short time.

24/7 Wall St. has screened the entire S&P 500 for dividend-paying stocks that are trading at less than 10 times expected earnings per share. That implies that the shares are valued at more than a 40% discount to the 17.5 times estimated S&P 500 EPS figure as a whole, as well as about two-thirds the value of a historic 15 times expected earnings during normal times.

Before thinking that value stocks are always “cheap stocks,” note that investors may not want to pay a market multiple for a struggling company for many reasons. Maybe there are operational issues, industry pressures, regulatory pressures, slow or negative growth, or other issues that keep the market from valuing these companies on par with the market itself.

24/7 Wall St. screened the entire S&P 500 for stocks valued less than 10 times expected current year earnings per share (EPS) using data from Refinitiv for estimates. Those were screened as normalized EPS used by Wall Street analysts rather than GAAP numbers, but we also have added some color to explain why each company is at a discount to the market or its peers. Companies with negative earnings or with major earnings contractions that would threaten their dividends ahead were screened out. Industries were screened peer-by-peer for which one represented the best value to focus on only one or two companies and to prevent excessive sector concentration.

It is important always to remember that there is no free lunch in the stock market. There is an entire history of value stocks turning into value traps. Some never manage to recover at all, while other companies do return to greatness.

Here are 13 dirt cheap value stocks that are valued at less than 10 times earnings and that also pay steady dividends deemed safe as of mid-2019.

American Airlines
> About 6.5 times expected earnings

American Airlines Group Inc. (NASDAQ: AAL) has been considered a value stock among the airline industry for some time, but the airlines have become more mainstream for investors and are believed to have fewer earnings shocks and major losses compared to pre-recession periods. Oil prices now more stable and not running back to those prior $100 per barrel levels keep jet fuel costs reasonable. Airlines also get to gouge on fees, and those affected by the 737 MAX plane groundings (American is one of them) have held up relatively well.

With shares near $32.50, the 6.5 times projected earnings figure is based on a consensus estimate of $5.01 per share for 2019. That would be up from $4.55 EPS a year earlier, and the 2020 consensus sees $5.69 EPS. The dividend yield is only about 1.25%.

AT&T
> 8.8 times current and expected earnings

AT&T Inc. (NYSE: T) would be the top yield in the Dogs of the Dow, but it’s no longer even ranked as a Dow Jones industrial average member. After paying billions to acquire DirecTV and then paying billions more to acquire Time Warner, some investors have a much harder time analyzing the value proposition when considering the mix of all the moving parts within AT&T now. That has led to a long slow bleed in the shares, and at $31.20 a share, the $227 billion market cap has to fight for attention, considering that AT&T’s long-term debt is almost $185 billion and the total liabilities are $353 billion. The stock also has lost about one-fourth of its value over the past three years while the overall market has risen.

With $3.52 EPS in 2018, analysts are calling for $3.58 in 2019 and $3.64 in 2020. That is very low growth, even with 7% revenue growth expectations in 2019. AT&T pays out about 60% of its EPS, and that is considered sustainable by most investor views. Its dividend yield is more than twice the Treasury’s long-bond at 6.5%.

Capital One
> About eight times expected earnings

Capital One Financial Corp. (NYSE: COF) is much better known as a credit card issuer than as a formal bank, but it does have bank and cafe locations in certain regions around the United States. Despite it having grown revenues for years, many investors believe that Capital One will be among the harder-hit banks in the next economic downturn due to such a large exposure to consumer credit cards and the expected rise in delinquencies and charge-offs that would follow such a downturn. Still, it is expected to grow revenues by the low- or mid-single digits, and a recent Jefferies upgrade called for close to a 30% payout increase. That means its $89.50 current share price and current yield of almost 1.8% might jump to over 2.3%, if the firm’s analysis proves to be correct.

Capital One’s $11.19 EPS in 2018 is expected to dip to $11.05 in 2019, but it is then expected to rise to $12.09 in 2020. That’s a lot more money in its pocket.

CVS Health
> About 7.5 times expected earnings

CVS Health Corp. (NYSE: CVS) has fallen far out of favor with the investing community. On top of drug pricing fears and deeper regulations expected ahead in health care, the former CVS Caremark further complicated how to evaluate the shares when it acquired health insurer Aetna in a $69 billion merger. To muddle matters further, Wall Street analysts are atrocious when it comes to factoring in an entire new company structure’s earnings and revenues into models including the acquirer. CVS shares are now down over 50% from their peak in 2015, and the dividend yield is about 3.8%, based on the $53.00 share price. With a market cap of almost $69 billion, CVS is expected to generate annualized revenues of $258 billion by the end of 2020.

With the 2018 EPS of $7.08 expected to fall to $6.84 in 2019, the 2020 consensus estimate of $7.22 EPS would value CVS at less than 7.4 times next year’s earnings estimates. Its dividend is deemed safe, as well with a payout rate of less than 30% of normalized earnings.

General Motors
> About 5.5 times expected earnings

General Motors Co. (NYSE: GM) is currently deemed to be cheaper than rival Ford due to opposite share performance of late. GM has much more exposure to China as its largest car market, and Chinese consumers could become anti-American if the trade war persists. On top of China woes, GM and its rivals have all faced peak-auto sales trends, and many historic car buyers opt for ride-sharing, public transportation or app-order services like Lyft and Uber. Its CEO is one of the most highly paid in America.

At about $37.25 a share, GM’s 2018 earnings of $6.54 per share are followed by consensus estimates of $6.73 in 2019 and $6.24 in 2020, with sales expected to contract less than 1% each year. GM also pays its shareholders a dividend north of 4% and has an earnings payout rate of less than 25% as a buffer to keep a strong dividend.

Gilead Sciences
> 9.5 times expected earnings

Gilead Sciences Inc. (NASDAQ: GILD) is a top biotech that seems to have lost its way after effectively helping to cure hepatitis B. Its stock also has been looking for a bottom, while many former investors and traditional investors don’t want to think of the term “biotech” and “value” in the same sentence. Gilead is effectively not growing after three straight years of revenue contraction. If Wall Street analysts are correct, Gilead’s revenue decline is basing out, and there might even be some low-single-digit revenue growth in 2020 as EPS have been basing out as well. The company also has bought back stock, and it spent more than $11 billion to acquire Kite Pharma, as the company hopes to diversify its revenues from HIV and hep-C. Gilead has partnered with small companies to see if it can land a ride into the next mega-blockbuster drug.

Shares are at $65.50, and Gilead trades at roughly 9.5 times expected 2019 and 2020 earnings per share. The $2.52 annualized dividend generates better than a 3.8% yield while investors wait for Gilead to find some growth again. Its shares are down about 45% from the peak in 2015, and even then it still has an $83 billion market cap.

Goldman Sachs
> About 8.5 times expected earnings

Goldman Sachs Group Inc. (NYSE: GS) historically has traded at a premium to its peers, and now the bank holding company is taking on more efforts that might end up making it a virtual bank for consumers that it has ignored until recently. After taking a beating of late, earnings are expected to trough this year and recover in the next. After international scandals followed negative news on the domestic front, Goldman Sachs’s reputation took a hit and its shares now even traded under the stated book value (at 0.94 times book). This doesn’t sound at all like the “Golden Slacks” of the past, but Goldman Sachs does offer a 1.7% dividend yield now.

With a 4% expected sales drop in 2019, that is anticipated to grow by the same amount it dropped next year. And the $25.27 EPS from 2018 is expected to drop to $23.30 in 2019 but recover to $25.89 in 2020. There are of course some issues keeping the stock down for future liabilities, but the shares are down over 25% from the highs at the start of 2018.

IBM
> 9.6 times expected earnings

International Business Machines Corp. (NYSE: IBM) is somehow still one of the Dow Jones industrials, and it has to be the most hated technology stock with a $100 billion or more market cap. CEO Ginni Rometty has managed to keep running this company since taking over in early 2012, despite the stock losing more than one-third of its value since 2013 while the market has skyrocketed. She is one of the best-paid CEOs in American as well. Now IBM is acquiring Red Hat to lead in the hypercloud and virtualization, among other key initiatives. The market continually discounts IBM’s critical initiatives due to its old-school legacy IT-services operations. Paying out less than half of its normalized EPS still generates a 4.65% dividend yield for what some more brave value investors are calling a long-term turnaround (even if it hasn’t been able to turn around in the past six years or so).

After normalized earnings of $13.81 per share in 2018, IBM’s consensus estimates are $13.91 EPS in 2019 and $14.16 in 2020. An anticipated 3.2% revenue drop in 2019 is expected to see a gain of less than 1% in 2020, prior to factoring in the Red Hat $4.5 billion expected contribution.

Lincoln National
> Less than seven times expected earnings

Lincoln National Corp. (NYSE: LNC) is usually considered a life insurance company, but its four main segments are annuities, retirement plan services, life insurance and group protection. The company is valued at a discount to two key book-value-per-share metrics and it has continued to buy back its own stock while still offering close to a 2.3% dividend yield.

At about $64.50 per share, Lincoln National had earnings of $8.48 per share in 2018 is expected to have $9.32 EPS in 2019 and $10.38 in 2020.

Macy’s
> Seven times expected earnings

Macy’s Inc. (NYSE: M) is the king of value stocks in the domestic retail game. The problem is that no one wants to pay for its earnings stream when Amazon and a plethora of other online retailers have chiseled away the company. Even rival Kohl’s scored a partnership with Amazon that just as easily could have been a Macy’s deal. The company also has continued to close down sub-optimized stores in malls around America. While Macy’s has seen its earnings slide, the reality is that revenues have tailed off only marginally from three years ago. Macy’s is offering investors right at a 7% dividend yield while it struggles to revamp its stores and learn to get buyers away from their computers and smartphones.

Even after a fresh earnings beat, Macy’s saw its shares trade down slightly to about $21.50. That’s almost 50% lower than its 52-week high, and its stock was last seen down almost 70% from its peak in 2015. The $3.09 EPS consensus for 2019 is expected to be $2.90 in 2020, but sales are not expected to fall.

Navient
> About 6.5 times expected earnings

Navient Corp. (NASDAQ: NAVI) may not be popular among many households due to its association with student loans, but many value investors would say that those students taking loans did so by their own choice. While sales are expected to be down 10% in 2019 and down in mid-single-digits in 2020, Navient’s EPS numbers are expected to grow. At close to $13.50 a share, Navient’s value may seem less now that it has risen from under $9 during the peak-selling pressure last December. Still, analysts generally now expect the stock to keep rising from its $3.2 billion market cap.

Navient had $2.09 EPS in 2018, and consensus analyst estimates were last seen at $2.11 EPS for 2019 and $2.18 for 2020. It offers new investors a dividend yield of almost 4.75%.

Owens-Illinois
> Less than six times expected earnings

Owens-Illinois Inc. (NYSE: OI) manufactures and sells glass containers to food and beverage manufacturers around the world. It’s considered an unexciting business with very small, low-single-digit sales growth expectations. The company’s post-earnings reaction after missing estimates has been atrocious, with a 15% drop so far in May. A fresh Wells Fargo view called for as much as 40% upside based on its value and business position.

After earnings of $2.72 per share in 2018, Owens-Illinois has earnings estimates of $2.90 per share for 2019 and $3.19 in 2020. Despite being valued at less than six times earnings, it has only a 1.2% dividend yield.

Xerox
> About eight times expected earnings

Xerox Corp. (NYSE: XRX) is a technology stock often forgotten about. Many younger workers might not even know about or care about the company, even if it has been around forever. After a recent breakup of the company led by activist Carl Icahn, Xerox shares looked like they were on par to almost double from the lows at one point earlier in 2019. So what if people Icahn’s age were the last ones to use Xerox machines and the like? Paper hasn’t exactly disappeared from the office environment. This company is difficult for some investors to think of long term, but the current share price still generates a 3.1% dividend yield, even after considering how much it has run up.

With a share price of about $32, Xerox’s normalized $3.46 EPS is projected to rise to $3.89 in 2019 and $4.13 in 2020. That’s about 8.2 times expected current year earnings and 7.75 times next year’s earnings, with a 6% expected revenue drop in 2019 and a 4% revenue drop in 2020.

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