After back-to-back years of significant gains for the S&P 500, led by the Magnificent 7 stocks, many of the other 493 stocks in the venerable index have traded sideways to down. The staggering poor breadth of the market at specific points in 2024 rivals some of the biggest in stock market history. It makes sense for investors to exploit the imbalances when possible.

Undervalued is a term used in the financial world that refers to a security or other type of investment selling for a stated price below the investment’s actual intrinsic value. A company’s intrinsic value is the present value of the free cash flows expected to be made by the company. Undervalued stocks can be evaluated by looking at the company’s financial statements and assessing its fundamentals, such as cash flow, return on assets, profit generation, and capital management, to determine its intrinsic value.

We screened the S&P 500, looking for the most undervalued companies, and then double-checked those stocks for the dividend payers. Five well-known companies look like outstanding ideas for investors to buy in 2025. All are rated Buy at top Wall Street firms we cover here at 24/7 Wall St.

Why do we cover value dividend stocks?

A value stock is generally a company that trades at a price lower than its fundamental value or what the company’s performance suggests it should be worth. Typically, these are shares of a company with solid fundamentals priced below its peers, based on analysis of the price/earnings ratio, yield, price to book value, and other factors.

AES

This conservative utility stock offers a hefty 5.33% dividend, a 6.2 PE on estimated 2025 earnings, and considerable upside potential. The AES Corp. (NYSE: AES) and its subsidiaries operate as diversified power generation and utility companies in the United States and internationally.

The company owns and operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries; owns and operates utilities to develop or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market.

It uses various fuels and technologies to generate electricity, such as:

• Coal
• Gas
• Hydro
• Wind
• Solar
• Biomass
• Renewables comprising energy storage and landfill gas

The company owns and operates a generation portfolio of approximately 34,596 megawatts and distributes power to 2.6 million customers.

Altria

Trading at 9.8 times estimated 2025 earnings and offering a rich 7.58% dividend, this stock is a value investor’s dream. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products through its subsidiaries in the United States.

The company provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild brand
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev S.A. (NYSE: BUD), the world’s largest brewer. The company sold 35 million of its 197 million shares through a global secondary offering earlier this year. That represents 18% of their holdings but still leaves a hefty 8% of the outstanding shares in their back pocket. They also announced a $2.4 billion stock repurchase plan partially funded by the sale.

APA

This company was long considered an industry leader when they were known as Apache. It offers one of the best entry points in the energy sector, paying a 4.75% dividend and trading at 6.3 times 2025 estimated earnings. APA Corp. (NYSE: APA) explores for and produces oil and gas properties through its subsidiaries.

It has operations in the United States, Egypt, and the United Kingdom and exploration activities offshore Suriname. It also operates gathering, processing, and transmission assets in West Texas and owns four Permian-to-Gulf Coast pipelines.

The company is one of the largest US E&P companies, with 2.3 BBOE of proven reserves (63% liquids). It is an acquirer/exploiter/explorer, a fiscally conservative company that has consistently grown its reserves and production via acquisitions and organic projects.

APA also operates gathering, compression, processing, and transmission assets in West Texas and owns four long-haul pipelines in the Permian Basin.

Celanese

This company has been cut in half over the last 52 weeks, offering a 4.10% dividend and a forward PE of 7.5 times estimated 2025 earnings. Celanese Corp. (NYSE: CE) is a chemical and specialty materials company that manufactures and sells high-performance engineered polymers in the United States and internationally. It operates through two segments.

The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive, medical, industrial, and consumer electronics applications.

The Acetyl Chain segment produces and supplies acetyl products, including:

• Acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals
• Organic solvents and intermediates for pharmaceutical, agricultural, and chemical products

It also offers vinyl acetate-based emulsions for use in:

• Paints and coatings
• Adhesives
• Construction
• Glass fiber, textiles
• Paper applications
• Ethylene vinyl acetate resins and compounds
• Low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications

In addition, it provides re-dispersible powder for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing.

FMC

While somewhat off-the-radar, trading at 10.5 times estimated 2025 earnings with a 4.63% dividend, this is another bargain. FMC Corp. (NYSE: FMC) is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products.

It develops, markets, and sells crop protection chemicals that include:

• Insecticides
• Herbicides, and fungicides; and biologicals
• Crop nutrition
• Seed treatment products are used in agriculture to enhance crop yield and quality by controlling various insects, weeds, and diseases, as well as in non-agricultural markets for pest control.

The company markets its products through its sales organization, alliance partners, independent distributors, and sales representatives.

It operates in North America, Latin America, Europe, the Middle East, Africa, and Asia. The company was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.

Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs

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