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Stock Watch

4 Best Stocks for Yield at a Reasonable Price

Here's an old-school idea: Buy big-name stocks with above-average dividend yields and below-average price-earnings ratios.

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The picks below are part of Kiplinger’s Personal Finance’s annual Best List, a roundup of the best values in all the areas we cover — from funds, stocks and ETFs to credit cards and bank accounts to cars, college, kid stuff, phone plans, travel and health. Discover all our Best List picks here.

Aflac (AFL, price $72, yield 2.3%), famous for its accident-prone duck, is a major provider of insurance policies in the U.S. and Japan—last year, the latter accounted for some 70% of the company’s revenues of $20.8 billion. The stock sells for just 10 times estimated year-ahead earnings, but bulls say the market is underestimating the firm’s long-term potential. Aflac has boosted its dividend in 33 straight years. (Prices are as of September 30.)

BB&T (BBT, $38, 3.2%) is one of the nation’s biggest regional banks. Unlike many of its peers, BB&T remained profitable during the financial crisis. Bulls say the shares should sell for more than 13 times earnings given BB&T’s high-quality loan portfolio, strong deposit growth and strategy of expanding via careful acquisitions. Like most banks, BB&T would benefit from higher interest rates.

Cisco Systems (CSCO, $32, 3.3%) is the world’s largest maker of computer-networking gear. Cisco’s days of rapid growth are just a memory, but its massive router-and-switch business generates huge amounts of cash. The company is also slashing costs in its old-line businesses and investing heavily to drive a new growth phase: selling software to run its hardware. Since 2011, the dividend has risen at an annualized rate of 34%.

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Valero Energy (VLO, $53, 4.5%) is the world’s largest independent oil refiner. Profits have been squeezed this year between rising crude prices on one side and a glut of gasoline inventory on the other. But Morningstar thinks Valero is “particularly well positioned” to benefit from changes in U.S. crude oil supplies, with the company’s Gulf Coast refineries able to take in more U.S. shale oil and Canadian crude. Valero’s annual dividend rate has jumped from 65 cents per share in 2012 to $2.40 currently.

See More: 8 Good Dividend Stocks Trading at Bargain Prices