4 Strong Buy S&P 500 High-Yield Dividend Stocks With Low PEs Are Bargains

The S&P 500 Index, weighted by market capitalization, currently has a high price-to-earnings (P/E) ratio of 25, which is way above its historical average. This is primarily due to the dominance of mega-cap tech companies, which account for nearly half of the index’s weight through the Information Technology, Communication Services, and Consumer Discretionary sectors. However, when the index is equal-weighted, mitigating the influence of these tech giants, the average stock’s valuation aligns closely with historical norms, appearing neither particularly cheap nor excessively overpriced.

24/7 Wall St. Key Points:

• The mega-cap Magnificent 7 stocks have led a nearly three-year stock market rally, which has propelled all major indices to all-time highs.

• While the Magnificent 7 stocks are overbought and could benefit from a pullback, numerous top S&P 500 high-yield dividend stocks are trading at less than 10 times earnings.

• As we enter October, investors should be cautious, as mutual funds and other institutional investment managers will begin to settle their books for the end of their fiscal year.

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Several of our favorite S&P 500 dividend-paying stocks are currently trading at incredibly low price-to-earnings ratios, offering value opportunities for income-focused investors. These companies span diverse sectors, including telecommunications, consumer staples, automotive, and insurance, providing both dividend income and potential upside if the market reassesses their valuations. However, investors should exercise caution when evaluating low P/E stocks, as these compressed valuations sometimes reflect legitimate concerns about industry headwinds, competitive pressures, or slower growth prospects.

While a low P/E ratio can signal an attractive entry point for patient investors willing to hold through volatility, it’s smart to understand the underlying reasons for the discount. Strong fundamentals, such as solid cash flow, manageable debt levels, and sustainable dividend payout ratios, are crucial indicators that separate genuine value opportunities from value traps. We screened our 24/7 Wall St. low PE, high-yield dividend stock screen and identified four bargains, all of which are Buy-rated by top Wall Street firms and are currently on sale.

Why do we cover the high-yielding S&P 500 dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past 50 years (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

APA

This is likely one of the best energy ideas currently, with a trailing P/E ratio of 7.1 and a stellar dividend yield of 4.05%, making it an outstanding choice for both growth and income investors. APA Corp. (NYSE: APA) is an independent energy company.

The company owns subsidiaries that explore for and produce oil and natural gas in:

• United States

• Egypt

• United Kingdom

• Suriname

APA’s upstream business has oil and gas operations in three geographic areas: The United States, Egypt and offshore the United Kingdom in the North Sea (North Sea).

It also has active exploration and appraisal operations ongoing in Suriname, as well as interests in Uruguay and other international locations.

APA maintains a diversified asset portfolio, including conventional and unconventional, onshore and offshore, oil and natural gas exploration and production interests. In the United States, operations are primarily focused on the Permian Basin of West Texas. APA also has conventional onshore assets in Egypt’s Western Desert and offshore assets on the United Kingdom’s Continental Shelf.

Raymond James has a Buy rating with a $28 target price.

Comcast

Comcast Corp. (NYSE: CMCSA) is an American multinational telecommunications and media conglomerate with a dividend yield of 4.04% and a forward P/E ratio of 7. This top media and entertainment company remains a favorite among Wall Street investors. Comcast is a global media and technology company.

It operates through four segments:

• Residential Connectivity & Platforms

• Business Services Connectivity

• Media, Studios

• Theme Parks

The Residential Connectivity & Platforms segment offers residential broadband and wireless connectivity services, as well as residential and business video services, Sky-branded entertainment television networks, and advertising.

The Business Services Connectivity segment offers connectivity services for small business locations, including broadband, wireline voice, and wireless services. It also provides solutions for medium-sized customers, larger enterprises, and small businesses, as well as connectivity services in the United Kingdom.

The Media segment operates NBCUniversal’s television and streaming business, including:

• National and regional cable networks

• The NBC and Telemundo broadcast networks

• Owned local broadcast television stations

• Peacock, a direct-to-consumer streaming service

It also operates international television networks comprising the Sky Sports networks and other digital properties.

The Studios segment operates NBCUniversal and Sky film and television studio production and distribution operations.

The Theme Parks segment operates Universal theme parks in:

• Orlando, Florida

• Hollywood, California

• Osaka, Japan

• Beijing, China

The Goldman Sachs price target for the shares is set at $39.

Conagra Brands

Conagra Brands Inc. (NYSE: CAG) manufactures and sells products under various brands in supermarkets, restaurants, and foodservice establishments. This is the ideal company for nervous investors, as it pays shareholders a substantial and secure 7.7% dividend, which has risen due to the stock price drop, which rests at 9.7 times forward earnings estimates. However, the payout’s sustainability is supported by a payout ratio of about two-thirds of earnings. Conagra and its subsidiaries operate primarily as a consumer packaged goods food company in the United States.

The company operates through four segments:

• Grocery & Snacks

• Refrigerated & Frozen

• International

• Foodservice

The Grocery & Snacks segment primarily offers shelf-stable food products through various retail channels.

The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels.

The International segment offers food products in various temperature states through retail and food service channels outside the United States.

The food service segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other food service establishments.

The company sells its products under these familiar brands:

• Birds Eye

• Marie Callender’s

• Duncan Hines

• Healthy Choice

• Slim Jim

• Reddi-Wip

• Angie’s

• BOOMCHICKAPOP

Barclays has an Overweight rating with a target price of $26.

Verizon

Verizon Communications Inc. (NYSE: VZ), commonly known as Verizon, is an American multinational telecommunications company that continues to offer tremendous value. It trades 9.13 times its estimated 2026 earnings, pays a 6.28% dividend, and is up almost 9% in 2025. Verizon provides a range of communications, technology, information, and entertainment products and services to consumers, businesses, and government entities worldwide.

Verizon’s interest coverage ratio is 4.6× to 5.0× trailing 12 months, which offers more than enough cushion for dividend payments. With a very predictable revenue stream from telecom services, the company has less exposure to commodity cycles. In addition, the large scale helps in financing and absorbing shocks.

It operates in two segments:

• Verizon Consumer Group

• Verizon Business Group

The Consumer segment provides wireless services across the United States through Verizon and TracFone networks, as well as through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones

• Tablets

• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband

• Data

• Video and conferencing

• Corporate networking

• Security and managed network

• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

Goldman Sachs has a Buy rating and a price target of $49.

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