There’s a very specific kind of thrill that comes with finding a bargain. Whether it’s half-off ribeyes at Costco or a pristine leather jacket on clearance, it sparks that unmistakable dopamine surge — the one that whispers, “You’re winning.” Now imagine getting that same thrill, but with your portfolio. That’s right: not only are we talking about bargains, but we’re talking about bargains that pay you just for holding them.
Dividend stocks are a beautiful thing. They’re like those friends who always bring snacks to the party — reliable, comforting, and never show up empty-handed. But in a market that’s either throwing tantrums over inflation or hyped up on AI fever dreams, finding solid dividend stocks at attractive valuations is no easy feat.
Fortunately for you, that’s exactly what we’re delivering today. We’ve scanned the market, run the numbers, and dodged the usual traps to bring you three dividend-paying stocks that aren’t just cheap — they’re the kind of long-term bargains that make you nod knowingly when others panic-sell on headlines.
Let’s break down why these three tickers — one in energy, one in finance, and one in healthcare — deserve a second look and a spot in your dividend portfolio.
1. Enbridge (NYSE: ENB): The Sleepy Energy Giant That Just Won’t Quit
Dividend Yield: ~7.5%
Forward P/E: ~17
5-Year Dividend Growth: 5% CAGR
Payout Ratio: ~65% (based on DCF)
Let’s face it — pipelines aren’t sexy. There’s no iPhone moment. There’s no Elon tweet. It’s just long, quiet tubes pumping crude, gas, and cash. But you know what is sexy? Collecting a fat 7.5% dividend yield while the rest of Wall Street forgets how math works.
Enbridge is the kind of company your dividend portfolio thanks you for. With over 17,000 miles of pipelines and a natural gas utility that serves millions, this Canadian stalwart is practically a tollbooth on North America’s energy highway. Their cash flow is tied to volume, not oil prices, meaning they make money whether crude is at $50 or $100 a barrel.
They’re also not sitting still. Enbridge has made a major push into natural gas and renewables — not because it’s trendy, but because it’s profitable. Their 2023 acquisition of three U.S. gas utilities added 7 million new customers. That’s scale. And more importantly: that’s predictable revenue.
So why’s the stock been lagging? Interest rate fears, mostly. But here's the kicker: as rates stabilize (or decline), high-yield utilities like Enbridge become incredibly attractive. Until then, dividend investors are getting paid handsomely to wait.
If you’re looking for a dependable, cash-spewing utility disguised as a midstream energy giant, Enbridge is your guy. The stock’s trading at a discount, the yield is juicy, and the dividend growth is quietly compounding. That’s a bargain with a bow on top.
2. Ares Capital (NASDAQ: ARCC): The Best Friend of Boring Money
Dividend Yield: ~9.6%
Price/NAV: ~0.98
Payout Ratio: ~90% (based on NII)
Dividend Frequency: Quarterly + Occasional Specials
Let’s talk BDCs. Business Development Companies. Sound exciting? No? Perfect. That’s what makes Ares Capital (ARCC) such a gem.
ARCC is a powerhouse in the world of middle-market lending — think of it as a private credit machine that helps midsize companies grow when traditional banks won’t return their calls. And unlike your Uncle Gary’s sketchy bridge loan business, Ares is best-in-class. Backed by the massive Ares Management empire, they’ve got scale, experience, and the kind of due diligence that makes accountants tear up with joy.
The real kicker here? The 9.6% dividend yield — and yes, it’s covered by net investment income. In fact, Ares frequently pays special dividends when times are good, which they’ve done consistently over the last few years. So while you’re collecting 9.6%, you’re also occasionally getting a bonus check. It’s the dividend investor’s equivalent of finding fries at the bottom of the bag.
Now, critics will point to the high payout ratio and claim risk — and to be fair, BDCs do carry exposure to economic slowdowns. But ARCC has a proven track record of navigating downturns. They cut their dividend only once, briefly, during the Great Financial Crisis — and they were among the first to restore it.
Also important: they’re conservatively leveraged, with plenty of liquidity and access to credit. And with interest rates still elevated, ARCC’s floating rate loan portfolio means they actually benefit from higher rates.
This is what we call getting paid to be patient — a nearly double-digit yield from a fortress-like BDC with a deep credit book and proven management. Bargain? Absolutely.
3. Bristol Myers Squibb (NYSE: BMY): Big Pharma’s Undervalued Underdog
Dividend Yield: ~4.9%
Forward P/E: ~7
5-Year Dividend Growth: 6% CAGR
Free Cash Flow Yield: ~12%
Pharma stocks tend to fall into two categories: overpriced biotech darlings that burn through cash faster than a TikToker at Sephora, or staid blue chips that the market treats like expired aspirin. Bristol Myers Squibb (BMY) is squarely in the second group — which is exactly why we love it.
With a P/E ratio of just 7 and a nearly 5% dividend yield, BMY is screaming value. And yet, the stock has been punished in recent years over concerns about patent cliffs and a few underwhelming product launches.
But here’s what the market’s missing: this isn’t your grandpa’s pharma company quietly coasting off Lipitor royalties. BMY has one of the most underappreciated drug pipelines in the S&P 500. With major acquisitions like Celgene (hello, Revlimid) and MyoKardia under its belt, Bristol has diversified revenue streams, strong immunology and oncology franchises, and is sitting on a 12% free cash flow yield.
They’re also aggressively buying back shares — nearly $5 billion worth in 2024 — which makes each share you own a little more valuable. Meanwhile, the dividend continues to grow steadily, supported by strong FCF and a healthy balance sheet.
Yes, there are risks. Generic competition is real. But BMY isn’t standing still. They’ve been managing the patent cliff by transitioning toward new revenue drivers like Opdualag and Camzyos, both of which are seeing growing adoption.
In short, Bristol Myers is a classic “buy the fear” opportunity. It’s trading like a company on life support, but the fundamentals tell a different story — one of stable cash flow, pipeline potential, and a nearly 5% yield you can sleep on. That’s not just value — that’s a full-blown dividend investor’s dream.
What Makes These Bargains Stand Out?
Let’s get one thing straight — not every high-yield stock is a bargain. Sometimes a sky-high yield is a flashing neon warning sign: “DANGER — THIS COMPANY IS CIRCLING THE DRAIN.” But here’s why ENB, ARCC, and BMY stand apart:
1. Their Dividends Are Sustainable
Each company’s dividend is well-covered by free cash flow or net investment income. These aren’t yield traps — they’re payout machines.
2. They’re Fundamentally Mispriced
Whether it’s interest rate overhang (ENB), misunderstood credit risk (ARCC), or biotech fatigue (BMY), these stocks are trading at discounts that don’t match their long-term potential.
3. They Have Catalysts Ahead
Enbridge’s energy transition plan, ARCC’s expanding loan book in a high-rate world, and BMY’s pipeline rollouts all provide upside triggers that the market is underpricing.
How To Build Around These Bargains
If you’re ready to take action, here’s a simple framework to plug these names into a dividend-focused portfolio:
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Core Yield: Use ENB as a stable income generator in your utilities/energy sleeve. Reinvest the dividends while the stock is cheap.
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High-Yield Booster: ARCC gives you enhanced income without reaching into junk territory. Consider capping exposure at 5–10% due to BDC structure.
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Growth + Income Hybrid: BMY is your GARP (Growth At a Reasonable Price) pick. It gives you both long-term upside and immediate cash flow.
Combine all three, and you’ve got diversification across sectors, income streams that grow, and built-in bargain pricing. That's how you win in a market full of noise.
Final Thoughts: Don’t Just Chase, Think Like a Builder
Investing isn’t just about chasing the biggest yield. It’s about building a portfolio that pays you reliably, grows with time, and doesn’t give you heartburn every time Powell opens his mouth.
The beauty of dividend investing lies in its patience — the ability to get paid while you wait for the market to come to its senses. Enbridge, Ares Capital, and Bristol Myers all offer that magical combination of value, yield, and resilience. They’re not the flashiest names, and that’s exactly the point.
So go ahead. Ignore the noise. Buy the cash flows. Collect the dividends. And remember: real wealth is built in the shadows of uncertainty, one overlooked bargain at a time.
Disclosure: This blog is for educational and entertainment purposes only. Not investment advice. Always do your own research — and maybe call your grandma, she misses you.
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