These undervalued dividend stocks are bargains based on their valuations. Investors in these stocks will get paid to wait, with yields up to 2% or more.

Most of these companies have higher than 2% yields, and also good earnings, cash flow, and/or sales prospects going forward. They are also trading with cheap valuations based on earnings or price-to-sales.

As a result, investors might want to invest in several of these undervalued dividend stocks. This will allow investors to diversify the earnings growth and yield aspects of their portfolios. A little bit of diversification goes a long way to simultaneously providing stability and upside to the investor’s portfolio prospects.

Let’s dive in and look at these stocks.

Undervalued Dividend Stocks: Diamondback Energy (FANG)

Dividend Yield: 1.8%

Diamondback Energy (NASDAQ:FANG) is an oil and gas company with assets in the Permian Basin in West Texas. The operator has very good earnings, cash flow, and dividend payment prospects.

As of June 3, FANG stock traded at $154.42, which puts it on a dividend yield of 1.8%. This is based on its annual dividend payment of $2.80. This is well less than the sector average of 2.79%, according to TipRanks, but its payout ratio is well less than 40% which is typical of oil and gas stocks.

Moreover, analysts project that the company will produce $25.18 in earnings per share (EPS) this year and $22.29 next year. That proves that its $2.80 dividend is easily covered by earnings, and in fact, leaves plenty of room for the dividend to rise.

It also shows that even for 2023, FANG stock is on a cheap forward P/E of just 6.9 times. As a result, this stock is probably too cheap. For example, if we estimate its dividend payout ratio at 40%, the dividend would be $8.92. Then, using a 2.79% dividend yield, the stock target price would be around $320 per share. That represents a good upside of 107% over today’s price.

Ovintiv (OVV)

Dividend Yield: 1.7%

Ovintiv (NYSE:OVV) is a major oil and gas producer based in Denver, CO. Its EPS is forecast to grow 33.3% from $10.75 per share in 2022 to $14.33 in 2023.

At $57.60 on June 3, Ovintiv has a forward P/E of just 4.02 times forward earnings for 2023. Moreover, the company pays an annual dividend of $1. That gives it a decent dividend yield of 1.7%. Ovintiv has paid a dividend each year for the past 32 years and raised it each year for the past four years.

Ovintiv has been buying back its stock for the past two quarters. It bought $182 million in the past six months ending March 2022. On an annualized basis, that represents 1.21% of its $14.9 billion value.

Goldman Sachs (GS)

Dividend Yield: 2.5%

Commercial bank stock Goldman Sachs (NYSE:GS) is a very inexpensive investment. For example, analysts forecast an average 2022 EPS of $37.76, putting it on a forward P/E of 8.4. This is based on its price of $318.95 as of June 3.

In addition, the P/E multiple falls to 7.9x based on an EPS forecast for 2023 of $40.33. That represents 6.8% earnings growth between the two years.

Goldman Sachs also pays an annual dividend of $8 per share, giving it a 2.5% dividend yield. The bank has paid dividends for the past 22 years.

Goldman Sachs is very shareholder friendly. Last quarter alone it bought back $2 billion of its shares. This makes it one of the best cheap stocks to buy.

Cenovus Energy (CVE)

Dividend Yield: 1.4%

Cenovus Energy (NYSE:CVE) is a Calgary, Canada-based oil and gas company that will show 10% growth next year based on analysts’ expectations. They forecast EPS to grow from $2.86 to $3.15 per share in 2023.

At $23.90 as of June 3, CVE stock is trading at a forward P/E of just 7.6 times based on its 2023 earnings projections. That is cheap for a company with this solid 10% earnings growth prospects.

Moreover, Cenovus pays a variable dividend each quarter. Recently it declared a 10.5 cents Canadian dividend for Q2. Annually that works out to around 33 cents U.S., representing a dividend yield of 1.4%.

But each quarter, the dividend yield will change with the quarterly declaration. This makes it one of the top undervalued dividend stocks to buy.

H&R Block (HRB)

Dividend Yield: 3%

H&R Block (NYSE:HRB) provides do-it-yourself tax preparation software and tax preparation services. It has a very strong brand name in this field.

Analysts now forecast that this year, the company will make $3.46 per share and $3.68 in 2023. So, at a price of $36.09 on June 3, HRB stock has a forward P/E multiple of 10x.

Given its dividend of $1.08 per share, the stock has a high dividend yield of 3%. Moreover, the company has paid out a dividend every year for the past 32 years.

That should give investors a high level of comfort that it will keep paying dividends, even if there is a severe recession.

Additionally, analysts expect higher earnings next year, even if there is a recession, because, after all, everyone has to pay their taxes. Its revenue, earnings and dividends will always be fairly solid, making it one of the best stocks to buy in a recession.

Nvidia (NVDA)

Dividend Yield: 0.09%

Nvidia (NASDAQ:NVDA) is one of the fastest-growing chip stocks that specializes in data center and gaming devices, including artificial software chips. On May 25, the company reported stellar revenue and earnings despite the slowdown in the economy.

For example, its earnings were up 49% from a year ago and up 3% from the previous quarter. Moreover, analysts now forecast earnings will reach $6.52 for the year ending January 2024. That represents 20% over the $5.45 EPS forecast for the year ending in January 2023. This puts the stock on a forward P/E multiple of 29 times.

That is substantially below its average 40x times forward P/E, according to Morningstar.

Unfortunately, the stock has a low dividend yield of just 0.09%, well below the average yield of tech stocks that pay dividends. But that means there’s a lot of room for future increases.

On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.