With the major stock market indexes hovering around all-time highs, there aren't as many dirt-cheap value stocks hiding in plain sight. But there are plenty of opportunities if you know where to look.
Utilities, airlines, and stodgy industrial companies won't light up a growth investor's radar. However, they can be exactly what dividend seekers are looking for to boost their passive income stream.
Here's why these three Motley Fool contributors think NextEra Energy (NEE -0.32%), United Airlines (UAL -4.34%), and Lockheed Martin (LMT 0.69%) stand out as dividend stocks that are worth investing $1,000 in this July.
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NextEra Energy is famous for solar and wind power but also loves natural gas and nuclear
Scott Levine (NextEra Energy): While passage of President Donald Trump's "One Big Beautiful Bill" helped to drive nuclear energy stocks higher, those focused on solar and wind power -- like utility stock NextEra Energy -- have quickly fallen out of favor.
Value investors know, however, that there are great opportunities to be had when the market turns its back on quality stocks. For those willing to buck the trend, NextEra's stock, along with its 3.1% forward-yielding dividend, are worth adding to the buy list.
With ample renewable energy assets powering its portfolio, the utility, in some investors' estimations, is on shaky ground as President Trump's budget bill phases out tax credits for solar and wind energy established in the 2022 Inflation Reduction Act.
What investors may be missing is that the company also operates ample natural gas and nuclear assets -- energy sources favored in the recently passed legislation. In 2024, natural gas and nuclear represented 69% and 10%, respectively, of Florida Power and Light's (FPL) net generating capacity. As one of the largest U.S. utilities, FPL was NextEra Energy's most profitable business in 2024, providing $2.21 in earnings per share (EPS) of the company's overall EPS of $3.37.
It's also important to acknowledge the company's track record of success over the past decade, growing shareholder value at a pace that exceeds both the S&P 500 and the Dow Jones Utility Average.
NEE Total Return Level data by YCharts.
Trading at 11.9 times operating cash flow, NextEra Energy stock is priced at a discount to its five-year average cash flow multiple of 14.8, making it a great opportunity today.
It's different this time for United Airlines
Lee Samaha (United Airlines): Airlines have been much-maligned investments over the years, and that's one of the reasons they trade on such low earnings multiples (United Airlines trades on just over eight times its estimated 2025 earnings).
The other reason is that investors are concerned about the traditional cyclical nature of the business and the level of debt that airlines incurred when travel restrictions were imposed on the public.
Those fears are still partly justified, but there's strong evidence to suggest that airlines, particularly network carriers like United, have mitigated these risks to such an extent that the stocks now appear to be excellent values. Through the development of loyalty programs, co-branded credit cards, and premium offerings, United has diversified its revenue streams, reducing its reliance on main-cabin tickets.
And, as previously discussed, network carriers like United and Delta Air Lines have a structural advantage in an era of rising airport, labor, and supply-chain costs. For example, only a slight increase in these costs will challenge the business models of the low-cost carriers and squeeze their profit margins. Whereas airlines like United are less affected by a $10 increase in costs per ticket compared to low-cost airlines.
It all adds up to make United Airlines an excellent long-term investment for readers who believe the airline industry has learned from the mistakes of the past.
Lockheed is a good value, and its yield is approaching 3%
Daniel Foelber (Lockheed Martin): Defense contractor Lockheed Martin is down a steep 24% from an all-time high reached in October of last year. The sell-off could present a buying opportunity for dividend investors seeking an industry leader at a favorable value.
Last quarter, Lockheed reaffirmed its full-year outlook for low single-digit revenue growth and an increase in diluted earnings per share (EPS). It's not a great forecast, but it should provide ample free cash flow (FCF) to continue returning capital to shareholders through stock buybacks and consistent dividend increases.
It has a huge backlog that is more than double a year's worth of sales. This allows Lockheed to plan its spending and have an accurate handle on its FCF, which is helpful when budgeting for its capital return program.
Last October, it raised its dividend for the 22nd consecutive year, boosting the quarterly payout to $3.30 per share. That's good for a forward yield of 2.9%, which is sizable relative to other defense contractors like RTX, Northrop Grumman, General Dynamics, and L3Harris Technologies.
Lockheed also stands out as a good value, with a mere 17.3 price-to-earnings ratio based on its share price at the time of this writing and the midpoint of its 2025 diluted EPS guidance of $27.15.
What's more, management's diluted EPS guidance is more than double its dividend payment, meaning that Lockheed can easily afford its generous payout thanks to its strong earnings.
Add it all up, and Lockheed checks all the boxes when it comes to finding a reliable dividend stock at a good value this July.
