5 Undervalued Dividend Stocks To Buy As Rally Gets Overextended

If you're thinking markets look a little tired lately, you aren't alone. The S&P 500 continues to set new highs on a weekly basis, and companies are still reporting strong earnings.

However, there are more than a few signs that this rally is getting long in the tooth. President Trump's trade deals with Japan and Europe haven't moved the needle much on U.S. indices, and S&P 500 companies are reporting lower net profit margins in Q2 compared to Q1.

Oh, and the meme stocks are back, which doesn't exactly lend to the argument that we're still in the early innings of a market rally.

Only three sectors reported higher profit margins in Q2 than Q1: communications, tech, and financials. That makes undervalued financial stocks with strong dividends a great late bull market play for both growth and income.

Today we’re going over five finance firms with high Benzinga Edge Value scores that also offer steady dividend yields.

Let’s take a look.

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Lincoln National Corp. 

• Dividend Yield: 5.14%
• Benzinga Edge Value Score: 96.76

Lincoln National (NYSE:LNC) is a $6 billion market cap firm based outside of Philadelphia that offers a variety of life insurance and retirement services (and also sponsors the stadium of the Super Bowl champion Eagles). The company's stock has basically traded flat over the last five years, but it's up more than 10% already this year and appears to have found a long-term support level after an extended period of sideways trading.

LNC doesn't have the dividend track record that some of the companies listed below have, but it’s a healthy 5% yield with a dividend payout rate of just 25%. Analysts still rate the stock as a consensus “Hold” following an EPS beat and a narrow revenue miss in Q1, but three different firms have upped their price targets in July, including Wells Fargo and JPMorgan Chase. Lincoln National also received an $825 million cash infusion from Bain Capital, which now owns 9.9% of the company.

Universal Insurance Holdings Inc. 

• Dividend Yield: 2.26%
• Benzinga Edge Value Score: 94.27

Universal Insurance Holdings (NYSE:UVE) is a small-cap provider of personal residential insurance policies for owners and renters. Despite a market capitalization of just $647 million and a dividend history of only 18 months, UVE offers a strong 2.8% yield with a manageable payout ratio of 28%. It also released an earnings report on July 24, impressing the market by beating revenue expectations by nearly 35%. The $596 million in sales was the highest quarterly figure the company has produced since going public in 2007.

The stock sold off following the earnings beat, but this could be profit-taking following a 20% gain over the last 12 months. UVE shares found support at the 200-day moving average, and the Relative Strength Index (RSI) has triggered an Oversold signal. This could be a good buying opportunity in a company that's exceeding sales expectations and has plenty of room to increase its dividend in the years ahead.

Old Republic International Corp. 

• Dividend Yield: 3.24%
• Benzinga Edge Value Score: 89.66

Old Republic (NYSE:ORI) is a $8.9 billion market cap insurer that offers home and auto insurance for both commercial and private customers, along with aviation, workers’ compensation, and other general liability policies. Unlike Lincoln National and Universal Insurance, Old Republic is a Dividend Aristocrat with a 45-year history of annual payout increases, currently yielding 3.2% with a dividend payout ratio of 39.7%. The company also reported Q2 2025 earnings on July 24, beating expectations on both EPS and revenue, including impressive revenue growth of 10% year-over-year (YOY).

ORI shares have ridden a steady upward trajectory since late 2023, bouncing off the blue support line above multiple times over the last two years. The stock is once again approaching this support level, and the RSI is creeping closer and closer to the Oversold threshold of 30. A buying opportunity could be on the horizon if the Oversold signal is triggered at the long-term support level.

Jeffries Financial Group Inc. 

• Dividend Yield: 2.78%
• Benzinga Edge Value Score: 85.21

Jeffries (NYSE:JEF) is the first market maker on our list, offering investment banking services to clients across North America, Europe, and Asia. The stock has a market capitalization of $11.9 billion and pays a dividend yield of 2.87%, with a payout ratio of 60%. It has now raised payouts for 2024 and 2025.

Jeffries missed EPS and revenue expectations during its Q2 2025 release back in June, but the stock may have finally found its bottom back in April. Once the Trump reciprocal tariffs were canceled, the stock bounced off an RSI Oversold signal and gained more than 22% between April and July. Shares are once again approaching the new support level, and shrewd investors may consider taking a shot at adding to their holdings here.

The Hanover Insurance Group Inc. 

• Dividend Yield: 2.18%
• Benzinga Edge Value Score: 83.21

The Hanover Group (NYSE:THG) pays the smallest yield of any stock on our list, but it's also got something our previous four entries lacked: momentum. In addition to a solid Value rating, THG scores a 74.44 rating on Benzinga Edge's Momentum scale, indicating an undervalued stock that still has more upside ahead. The company has also raised its annual dividend payouts for 20 consecutive years, with a payout rate of just 30%.

Hanover reports earnings on July 30, and analysts will be looking to see if the company can build on its previous EPS beat from Q1. Revenue slightly missed expectations, but still grew 3.4% YOY. Analysts at Keefe, Bruyette, and Woods upgraded the stock from Hold to Buy this month. In addition to strong fundamentals and a robust dividend, the stock has been in an uptrend since a Golden Cross breakout in late 2023. Currently, the price appears to be consolidating around the 200-day moving average, and an impressive earnings report could propel the stock into its next leg up.

Editorial content from our expert contributors is intended for the general public and does not constitute individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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