4 Historically Cheap High-Yield Dividend Stocks Ripe for Income Seekers
Four familiar dividend names have quietly slipped below every valuation benchmark they set over the past decade, yet each still funds its payout from earnings or cash flow. The question is whether the reasons investors abandoned them are permanent or…
Income investors usually pay a premium for reliable dividends. Right now, four well-known payers trade at a discount to their own valuation history, and each still covers its dividend from earnings or cash flow. T. Rowe Price (NASDAQ:TROW | TROW Price Prediction), United Parcel Service (NYSE:UPS), Verizon Communications (NYSE:VZ), and Realty Income (NYSE:O) all screen cheaper than their 10-year averages. The deepest discount belongs to T. Rowe Price, which trades at about 10 times trailing adjusted earnings, a lower multiple than at any year-end in the past decade.
Valuation Discounts at a Glance
| Stock | Forward Yield | Measure | Current | 10-Year Average |
|---|---|---|---|---|
| T. Rowe Price | 4.95% | Adjusted P/E | 10 | 15 |
| UPS | 6.45% | Adjusted P/E | 15 | 17 |
| Verizon | 6.62% | Adjusted P/E | 9 | 11 |
| Realty Income | 5.71% | Dividend yield | 5.71% | 4.70% |
The 10-year averages use each year-end share price from 2016 through 2025 divided by that year’s adjusted EPS. For Realty Income, whose GAAP earnings are distorted by real estate depreciation, the comparison uses forward dividend yield at each year-end, where a higher yield means a cheaper stock.
T. Rowe Price: A Decade-Low Multiple Backed by a Fortress Balance Sheet
T. Rowe Price pays $1.30 per share quarterly, or $5.20 annualized, for a 4.95% yield at $105.
Dividend safety: That payout takes about 50% of trailing adjusted EPS of $10.34, leaving room for buybacks too. CFO Jen Dardis said on the July call that year-to-date repurchases exceeded $497 million and that the firm holds $4.4 billion of cash and discretionary investments. The quarterly dividend has increased annually throughout the record, from $0.70 in 2018 to $1.30 in 2026.
Why it is out of favor: Clients pulled a net $6.5 billion in the second quarter, and the effective fee rate fell to 38.1 bps. Shares are down 36.39% over five years, and analysts count 9 holds, 1 sell, and 3 strong sells with zero buy ratings. The year-end P/E ran from 11 to 19 over the decade, and today’s multiple stands below that entire range.
Bull case: Assets under management hit a record $1.89T, and the ETF lineup pulled in $4.4 billion of Q2 net inflows. CEO Rob Sharps said, “We expect 2026 to be a record year for gross flows.”
Risk: Sharps also warned, “We expect net flows in the second half of the year to be meaningfully more challenging than the first half.”
United Parcel Service: An Ultra-High Yield Priced for a Recovery Nobody Trusts Yet
UPS pays $1.64 per share quarterly, or $6.56 a year, for an ultra-high 6.45% yield at $101.75.
Dividend safety: This is the thinnest buffer in the group. The dividend equals about 94% of trailing adjusted EPS of $6.95 and roughly 91% of the company’s 2026 EPS target of about $7.22. Management plans about $5.4 billion of 2026 dividends against expected free cash flow of roughly $5.5 billion. UPS ended Q2 with $4.7 billion in cash and no outstanding commercial paper. The quarterly payout rose from $0.17 in 2000 to $1.64.
Why it is out of favor: The Amazon glide-down cut volumes by 3.6%, and adjusted EPS fell from $12.95 in 2022 to $7.16 in 2025. Shares are down 36.78% over five years. The trailing multiple of 15 compares with a decade range of 13 to 20, and the stock trades near 14 times this year’s EPS target.
Bull case: U.S. Domestic revenue per piece rose 9.3%, and that segment’s operating margin reached 8%. Chief executive Carol Tomé said on the July call, “We now have a leaner, more automated, more agile network that will deliver operating leverage as volume grows.”
Risk: The quarterly rate has held at $1.64 per payment in 2025 and 2026, so any stumble in the turnaround leaves little margin for error.
Verizon: Record Cash Flow at a Single-Digit Multiple
Verizon pays $0.7075 per share quarterly, or $2.83 annualized, for an ultra-high 6.62% yield at $42.72.
Dividend safety: The payout equals about 58% of trailing adjusted EPS of $4.88. In cash terms, first-half dividends of $5.9 billion used about 58% of $10.2 billion in free cash flow. Q2 free cash flow alone rose 27.1% to $6.43B. The quarterly dividend has increased every year, from $0.50 in 2012 to today’s rate.
Why it is out of favor: Growth is slow, and third-quarter revenue reported this morning fell short of Wall Street estimates, according to StockStory. Shares were down 4.34% in early trading. At 9 times trailing adjusted earnings, Verizon stands below its 10-year average of 11, near the bottom of a decade range of 8 to 14.
Bull case: Q2 adjusted EBITDA margin hit 40.1%, postpaid phone net additions at Verizon reached 184K, and it paid off substantially all of Frontier’s debt 6 months ahead of schedule. CEO Dan Schulman said in July, “We’re growing our dividend, and we are paying down our debt.”
Risk: Unsecured debt totals $136.5B, with net unsecured debt at 2.5x EBITDA, which limits flexibility if cash flow softens.
Realty Income: Monthly Checks at One of Its Richest Yields in a Decade
Realty Income pays $0.2715 monthly, or $3.258 annualized, for a high 5.71% yield at $57.03.
Dividend safety: REITs pay dividends from AFFO, and the dividend uses about 73% of 2026 AFFO guidance of $4.44 to $4.45 per share. Occupancy is at 98.8%, Fitch rates the company ‘A’, and pro forma liquidity exceeded $5.7 billion. The Q2 increase was its 115th consecutive quarterly dividend increase.
Why it is out of favor: Rate-sensitive REITs have lagged, and shares sit below the $71.59 close at the end of 2021 and the $61.69 200-day average. A GAAP P/E of 41 looks expensive, but depreciation inflates it. On yield, today’s 5.71% beats the 10-year average of 4.70% and stands near the top of a range running from 3.71% to 5.92%.
Bull case: AFFO per share grew 3.8% to $1.09 in Q2, new deals closed at a 7.3% initial cash yield, and a $6B JV in hyperscale data centers adds a growth driver.
Risk: The net debt-to-adjusted EBITDA ratio, on a pro forma annualized basis, rose to 5.4x from 5.2x as the company leans on a $10.0B investment plan.
Four Discounted Payouts Worth a Closer Look
These four names all trade below their own decade-long valuation averages for a specific reason: fund outflows, the Amazon reset, slow telecom growth, or rate pressure on REITs. T. Rowe Price and Verizon pair that discount with payout ratios near 50% to 58%, Realty Income supports its monthly check with AFFO, and UPS offers the biggest turnaround return with the lowest coverage. For income investors, the discount gets a higher starting yield on dividends that are still funded.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
