3 dividend stocks trading near fair value News ad

As 2025 begins with volatility, many investors are likely feeling the pressure of increased uncertainty. The S&P 500 and other major indexes are down year-to-date, led by sharp declines in tech heavyweights like NVIDIA, which is down 13% from a 52-week high set just days ago. Market sentiment was further weakened by a heated December jobs report, reigniting fears of a prolonged rise in interest rates.

For cautious investors looking to protect their portfolios, high-yield dividend stocks that are close to fair value can offer income and stability during these turbulent times.

Let’s take a closer look at three contenders, each of which presents attractive valuations based on their P/E, technical positioning, and strong profitability.

Devon Energy breaks long-term downtrend

The energy sector started 2025 strong thanks to the popular Energy Select Sector SPDR Fund ETF. NEW SIRKA: XLE up 5.36% year-to-date, making it the best-performing sector year-to-date. Devon Energy New York Stock Exchange: DVN has been a standout performer in this space, growing more than 12% this year.

As one of the largest independent oil and gas producers in the United States, Devon operates in highly productive regions such as the Delaware Basin.

Devon’s dividend yield is particularly attractive because it combines fixed and variable components tied to free cash flow. While the forward yield is 4.13%, it could rise significantly if oil prices continue to rise. After spending most of 2024 in decline, Devon recently broke out of a long-term downtrend after breaking through a critical resistance level.

This technical shift suggests further upside if the stock establishes a base above the breakout zone.

Analysts are bullish, with a Moderate Buy rating and $49.43 price target offering further upside potential.

CVS Health will be a leader in 2025

CVS Health Corp. New York Stock Exchange: CVSa dominant player in the U.S. healthcare industry, best known for its CVS Pharmacies, CVS Caremark and Aetna health plans. The company faced significant challenges in 2024, including reduced demand for COVID-related products and rising costs associated with its rapidly growing Medicare Advantage (MA) plans.

These headwinds have led to lower stock prices, but that is starting to change. The government’s recent proposal to increase MA payouts in 2026 has renewed optimism, helping shares rise nearly 15% year-to-date through Monday’s close, defying a decline in the broader market.

On the technical side, CVS has broken out of a consolidation base near $45 and is now approaching its 50-day simple moving average, signaling strengthening momentum. CVS offers an impressive dividend yield of 5.16% for income-focused investors, coupled with an attractive P/E ratio of 13.08.

Analysts are bullish, maintaining a Moderate Buy rating and forecasting upside potential of nearly 33% relative to the consensus target. As a leader in the defense healthcare sector with an improving outlook, CVS could be an attractive choice for yield and value investors.

Ford Motor Co. enters potential deep value territory

Ford Motor Company. New York Stock Exchange: Fan icon of the automotive sector, has recently faced its own challenges. The stock has fallen nearly 16% over the past year due to rising recall and warranty costs and continued losses in the electric vehicle (EV) segment.

However, management signaled a turning point, forecasting improved profitability of electric vehicles by 2025 due to lower costs.

Valuation metrics highlight Ford’s appeal to bargain hunters, with a P/E ratio of 11.07 and a forward P/E of just 5.74. For income seekers, Ford’s 6.18% dividend yield is especially enticing. Technically, the stock has established a support zone near $9.50, which could act as a double bottom if the stock breaks short-term resistance near $10.

Analysts, however, are lukewarm on Ford, assigning the company a Underweight rating, but the $11.83 consensus price target still suggests impressive upside potential from current levels. Ford may be worth considering for investors looking for high-yield stocks with potential value as the company pursues its cost-cutting strategy.

Before you consider CVS Health, you need to hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and CVS Health wasn’t on the list.

While CVS Health currently has a Moderate Buy rating among analysts, the top-rated analysts rate these five stocks as Outperform Buys.

View five stocks here

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