The Greedy Contrarian Screen: 17 Undervalued Stocks With Soaring Dividends
In a volatile market, one investment strategist's rigorous, seven-step filter has uncovered a list of "cheap" stocks, including giants like PepsiCo and Occidental Petroleum, that reward shareholders with rapidly growing payouts.
In a market defined by high valuations and whiplash-inducing volatility, many investors are seeking shelter in “classic defensive plays.” According to John Buckingham, editor of the highly-regarded Prudent Speculator newsletter, the answer lies in a specific type of dividend-paying stock—one found by being a “greedy contrarian.”
Following this philosophy, a new analysis has put Buckingham’s theory to the test, running thousands of companies through a demanding, multi-layered screen. The goal: to find companies that are not only cheap but also growing their business and, most importantly, their dividend payouts to shareholders.
After an exhaustive process, only 17 stocks made the final cut, offering a powerful starting point for investors looking for quality on sale.
The Blueprint for Finding Hidden Gems
The screening process was designed to be deliberately tough, moving beyond simple metrics to identify true, all-around performers. It started with the S&P Composite 1500 Index and applied a series of rigorous filters:
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Above-Average Yield: First, the list was cut to stocks with dividend yields of 2% or higher, significantly more than the S&P 500’s average of 1.3%.
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Discount Valuation: The screen isolated companies trading at a discount, with forward price-to-earnings (P/E) ratios at least 20% below their own 10-year average.
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Sector Bargains: The remaining stocks were then filtered to ensure their P/E ratios were also cheaper than the average for their specific market sector.
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Strong Growth Prospects: To avoid “value traps,” the screen demanded that the companies have a higher estimated revenue growth rate through 2027 than their sector peers.
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Proven Dividend Growth: Finally, the list was narrowed to companies whose dividend growth over the past five years outpaced the S&P 500’s own dividend CAGR of 5.1%.
The Final 17: A Mix of Household Names and Overlooked Leaders
This meticulous process filtered out all but the most robust candidates, leaving a diverse group of 17 companies. The list includes defensive consumer staples, booming energy producers, and steady financial institutions.
Household names like PepsiCo (PEP) stand out, proving that even blue-chip giants can be found at a discount. Despite its global brand recognition, PepsiCo passed the screen with a 4.2% yield and a consistent 6.8% dividend growth rate.
On the high-growth end, energy players like Occidental Petroleum (OXY) and Murphy Oil (MUR) made the list. Occidental, in particular, boasts a staggering five-year dividend CAGR of 88.8%, signaling a dramatic turnaround and commitment to returning cash to shareholders.
Here is the full list of companies that successfully passed all criteria:
| Company | Ticker | Dividend Yield | Forward P/E | Est. Revenue CAGR (2025-2027) | 5-Year Dividend CAGR |
| Upbound Group Inc. | UPBD | 5.92% | 5.6 | 8.0% | 6.1% |
| Columbia Banking System Inc. | COLB | 5.64% | 9.0 | 18.6% | 5.2% |
| Murphy Oil Corp. | MUR | 5.31% | 11.5 | 7.3% | 21.1% |
| PepsiCo Inc. | PEP | 4.20% | 16.7 | 3.0% | 6.8% |
| Atlantic Union Bankshares Corp. | AUB | 4.05% | 9.7 | 8.9% | 6.3% |
| Essential Utilities Inc. | WTRG | 3.54% | 17.0 | 6.4% | 6.8% |
| Coterra Energy Inc. | CTRA | 3.41% | 8.2 | 6.2% | 16.5% |
| Bank OZK | OZK | 3.33% | 8.1 | 5.4% | 9.3% |
| EOG Resources Inc. | EOG | 3.31% | 11.8 | 8.0% | 22.2% |
| Brown-Forman Corp. Class B | BF.B | 3.20% | 16.9 | 1.9% | 5.4% |
| Archrock Inc. | AROC | 3.08% | 14.4 | 7.4% | 5.6% |
| Ovintiv Inc. | OVV | 3.01% | 8.3 | 5.0% | 26.2% |
| UnitedHealth Group Inc. | UNH | 2.87% | 13.0 | 6.2% | 12.1% |
| Lamb Weston Holdings Inc. | LW | 2.82% | 15.1 | 2.5% | 10.0% |
| Banc of California Inc. | BANC | 2.71% | 10.5 | 8.8% | 10.8% |
| Constellation Brands Inc. Class A | STZ | 2.37% | 13.2 | 1.1% | 6.3% |
| Occidental Petroleum Corp. | OXY | 2.19% | 15.3 | 4.0% | 88.8% |
| Source: FactSet |
A Starting Point for Savvy Investors
While a powerful tool, a stock screen is not a substitute for due diligence. Buckingham’s “greedy contrarian” approach suggests that these out-of-favor stocks are worth a closer look precisely because the market may be overlooking their potential. For investors willing to do their own research, this list provides a treasure map to potentially undervalued companies poised for both growth and generous shareholder returns.
