Stocks with low P/E ratios can offer attractive returns if their valuation multiples expand.
And when a low P/E stock also has a high dividend yield, investors get ‘paid to wait’ for the valuation multiple to increase.
In this article, we will discuss 3 undervalued high dividend stocks, which are currently trading at P/E ratios under 10 and are offering dividend yields well above the S&P 500 average yield.
1. Jackson Financial (JXN)
primarily offers annuity products to retail investors in the United States. The company operates in three segments and provides a range of retirement income and savings options.
The Institutional Products segment includes traditional investment contracts and funding agreements. The Closed Life and Annuity Blocks segment offers various insurance products. The company distributes its offerings through a diverse network of financial intermediaries.
On August 5th, 2025, the company announced results for the second quarter of 2025. Jackson Financial reported non GAAP EPS of $4.87, which beat estimates by $0.23.
Variable annuity sales dipped to $2.5 billion, reflecting lower lifetime benefit product sales, while registered index linked annuity (RILA) sales came in at $1.4 billion, which was slightly below last year. Fixed and fixed index annuity sales, however, surged to $470 million, supported by enhanced asset sourcing at PPM America.
The company posted net income of $168 million, or $2.34 per diluted share, compared to $264 million, or $3.43 per diluted share, a year ago.
Adjusted operating earnings of $350 million were down from $410 million in the prior year, primarily reflecting lower fee income tied to reduced variable annuity AUM.
Capital strength remained a standout, with Jackson’s risk-based capital ratio at 566% and total adjusted capital above $5.3 billion. Free cash flow reached $290 million in the quarter, contributing to over $1 billion over the trailing twelve months.
JXN is currently trading for a 2025 P/E under 5, and a dividend yield of 3.3%.
2. AES Corp. ( )
The AES (Applied Energy Services) Corporation has businesses in 14 countries and a portfolio of approximately 160 generation facilities. AES produces power through various fuel types, such as gas, renewables, coal, and oil/diesel.
The company has more than 36,000 Gross MW in operation. In 2024, AES produced $12.3 billion in revenues.
AES Corporation reported second quarter results on July 31st, 2025, for the period ending June 30, 2025. Adjusted EPS increased 34% to $0.51 for Q2 2025, which beat analyst estimates by $0.11.
The company completed construction of 1.2 GW of energy storage and solar in the quarter, and signed or awarded new long-term PPAs for 1.6 GW of solar and wind with data center companies.
The company constructed and acquired 3 GW of renewable energy in 2024, as well as constructed a 670 MW combined cycle gas plant in Panama. In 2025, it expects to add 3.2 GW of new projects in operation. Leadership maintained its 2025 guidance, expecting adjusted EPS of $2.10 to $2.26 for the full fiscal year.
Additionally, the company reaffirms its expectation it can grow EPS on average 7% to 9% through 2025 from a base year of 2020. It also expects annual EPS growth of 7% to 9% from 2023 through 2027.
AES currently trades for a 2025 P/E of 6.0 and currently yields 5.5%.
3. Western Union Company (WU)
The Company is the world leader in the business of domestic and international money transfers. The company has a network of approximately 550,000 agents globally and operates in more than 200 countries.
About 90% of agents are outside of the US. Western Union operates two business segments, Consumer-to-Consumer (C2C) and Other (bill payments in the US and Argentina).
Western Union reported Q1 2025 results on August 4th, 2025. Company-wide revenue decreased 4% and diluted GAAP earnings per share decreased 10% to $0.37 in the quarter compared to $0.41 in the prior year on lower revenue, higher interest expense and tax rate.
Revenue declined because of challenges in Iraq and a slowdown in North American retail, offset by higher Banded Digital transactions and strength in Consumer Services.
CMT revenue fell 8% to $885M from $965M on a year-over-year basis because of 2% lower transaction volumes. Branded Digital Money Transfer CMT revenues increased 6% as transactions rose 9%. Digital revenue is now 29% of total CMT revenue and 36% of transactions.
WU trades for a 2025 P/E of 5.0 and currently yields 11.3%.