3 Undervalued High Dividend Stocks Yielding Over 5%

High dividend stocks are attractive for income investors. With the S&P 500 Index yielding less than 2% on average right now, income investors such as retirees are feeling the pinch. Therefore, investors looking to increase the income generated by their portfolios should look to high dividend stocks.

Even better, investors can buy high yield stocks when they are also undervalued, which could lead to high total returns in the coming years. The following 3 undervalued high dividend stocks have yields above 5%, and high total return potential.

Whirlpool Corp. (WHR)

Whirlpool Corporation, founded in 1955 and headquartered in Benton Harbor, MI, is a leading home appliance company with top brands Whirlpool, KitchenAid, and Maytag.

Roughly half of the company’s sales are in North America, but Whirlpool does business around the world under twelve principal brand names. The company, which employs about 44,000 people, generated nearly $17 billion in sales in 2024.

On January 29th, 2025, Whirlpool reported fourth quarter 2024 results. Sales for the quarter totaled $4.14 billion, down 18.7% from fourth quarter 2023. Ongoing earnings per diluted share was $4.57 for the quarter, 19% higher than the previous year’s $3.85 per share.

Whirlpool issued its 2025 guidance, seeing ongoing earnings-per-share coming in at approximately $10.00 on revenue of $15.8 billion. Additionally, Whirlpool expects cash provided by operating activities to total roughly $1 billion, with $500 to $600 million in free cash flow.

Whirlpool has strong brands, and its competitive advantages include its global presence and a strong control over its costs, which is why the company generates higher margins than its peers.

WHR has a 2025 expected dividend payout ratio around 70%, while the stock currently yields 7.5%.

AES Corp. (AES)

The AES (Applied Energy Services) Corporation was founded in 1981 as an energy consulting company. It now 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.

AES Corporation reported fourth quarter results on February 28th, 2025, for the period ending December 31, 2024. Adjusted EPS decreased 26% to $0.54 for Q4 2024, but this still beat analyst estimates by $0.19.

For the full year, AES’ adjusted EPS rose 22% to $2.14 from $1.76 in 2023. 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.

Leadership initiated 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 has produced decent EPS growth over the long term, but adjusted EPS results have improved at a higher rate in recent years. In the last nine and five years, AES Corporation has increased adjusted EPS by a 6.3% and 9.5% CAGR, respectively. 

The company is actively engaged in developing and acquiring new energy projects; it currently has a backlog of nearly 12 GW of renewables. AES expects to complete the majority of these projects over the next three years, but as it continues expanding, new projects could push this date out.

AES has increased its dividend for 11 consecutive years and shares currently yield 5.4%.

The Western Union Company (WU)

The Western Union 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 mixed Q4 2024 results on February 4th, 2025. Revenue increased 1% and diluted GAAP earnings per share increased to $1.14 in the quarter, compared to $0.35 in the prior year on higher revenue and a $0.75 tax benefit on reorganizing the international operations.

Revenue rose, despite challenges in Iraq on higher Banded Digital transactions and Consumer Services volumes.

CMT revenue fell 4% year-over-year even with 3% higher transaction volumes. Branded Digital Money Transfer CMT revenues increased 7% as transactions rose 13%. Digital revenue is now 25% of total CMT revenue and 32% of transactions.

Consumer Services revenue rose 56% on new products and expansion of retail foreign exchange offerings. The firm launched a media network business, expanded retail foreign exchange, and grew retail money orders.

WU has an expected dividend payout ratio of 52% for 2025. WU stock currently yields 9%.