Finding good companies trading at depressed prices can really work out in investors' favor. If the stock in question pays a dividend, that can be even better. A dropping price drives up the yield and if you reinvest your dividends, you're building up the number of shares you own.

If the company's stock posts gains down the line, you will then see heightened returns thanks to owning more shares, and long-term holding allows the power of compounding to really take effect. 

The strategy might not produce huge gains overnight, but patient investors can see strong returns with a value-focused, buy-to-hold approach to dividend stocks. Within that mold, investors seeking solid, income-generating stocks should consider establishing or adding to positions in Hanesbrands (NYSE:HBI) and AT&T (NYSE:T) -- two companies that are consistently profitable, trade at non-prohibitive valuations, and pay sizable dividends. 

Stacks of coins and lettered blocks that spell "yield"

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Hanesbrands

Hanesbrands traded at clearance prices late in 2018, with its share price dipping to the $11 range -- a level that had the stock trading at roughly 7.5 times the year's expected earnings and sporting a 4.6% dividend yield. A better-than-expected fourth-quarter performance and encouraging guidance have since helped the stock rebound, and shares now trades at roughly $19 per share.

The company is no longer the absolute steal it was in December and January. To use a retail metaphor, it's gone from having been accidentally put on the clearance rack to merely being labeled "on sale." 

The clothing and apparel stalwart's shares still trade at a reasonable 11 times forward earnings, and its 3.1% dividend yield is nothing to sneeze at. The stock's quarterly payout has held fast at $0.15 per share since the beginning of 2017, but the company has tripled its payout over the last five years, and it will likely resume dividend growth after it pays down more debt from the recent acquisitions push. 

Hanesbrands generated $500 million in operating cash flow in the fourth quarter, and it used $400 million to pay back debt incurred from its recent acquisitions push. The move brought the company's debt-to-EBITDA ratio down to roughly 3.3 -- and the company expects to cut its leverage to 2.9 times by the end of 2019. That shows that the company is approaching the 2 times to 3 times debt-to-EBITDA target it laid out at its last investor day conference -- an exciting development for income-focused investors.

The cost of covering the company's dividend distribution at current levels comes in at under 40% of trailing free cash flow, and Hanesbrands expects its cash generation to accelerate significantly over the next four years. With the company nearing its debt level target, it's not unreasonable to expect that the company could return to delivering rapid payout growth, and the stock's yield is already attractive. 

Hanesbrands' Champion clothing is hot to an extent that's still underappreciated, and 50% year-over-year growth for the brand's sales outside of mass channel retail in the December quarter suggests the company has avenues to growth even as companies like Target move to prioritize their own in-house brands. Long-term shareholders looking for income generation can still see strong performance from the stock -- even after its recent rally. 

AT&T

AT&T stock has a reputation for being a boring investment. The signals sent by its stagnating mobile wireless segment and significant subscriber atrophy for its DirecTV business probably haven't done anything to change that reputation, but the stock is still a rock-solid income generator, and shares could actually offer substantial upside at current prices.

Granting that the company's core businesses are under pressure, it's also worth noting that they're still performing at acceptable levels and generating massive cash flow -- and AT&T's dividend component looks great on pretty much every level. Investors seeking rapid payout growth probably won't get their wish, but AT&T stock already yields roughly 6.6%, and the company's safe payout ratios and 34-year history of delivering annual payout growth suggest that shareholders can look forward to increases at regular intervals.

The company's $85 billion purchase of Time Warner will contribute to relatively slow payout growth, but the move immediately made AT&T a major player in the content space and created opportunities to modernize and expand its business. As is becoming the rage, AT&T is launching its own Warner-branded streaming service.

It's still relatively early days in the streaming space, and with Disney, Warner, and others launching streaming products in addition to existing industry giants like Netflix and Amazon, it remains to be seen how that will play out. That said, Warner has a compelling catalog of video content, talented production studios, and some compelling assets in other content categories like video games that could help it carve out bigger business with direct-to-consumer media offerings.

Most long-term outlooks still see huge growth for the internet video market, and AT&T's role as both a content provider and the owner of distribution channels by virtue of its mobile and satellite businesses sets up some interesting dynamics. The company is also positioned to play a key role in the evolution of 5G -- next-generation wireless network technology that will be at the heart of technologies like autonomous vehicles, smart-home technologies, and other Internet of Things devices.

Trading at roughly 8.5 times this year's expected earnings and still sporting a fantastic dividend, AT&T is worth piling into for income-focused investors.