If the adage of selling in May and going away is true, then the market is in for a troubling summer. There is growing concern of an earnings recession. This is reminding investors about the importance of finding stocks that reward shareholders with regular dividend payments. With that in mind, this article is looking at undervalued Dow Stocks that investors can look at buying right now.

Yes, I said “right now.” The companies on this list have a history of paying — and growing — their dividends. These dividends help to offset the volatility in the market and increase an investor’s total return over time.

With that said, it’s still important to ensure you’re not overpaying for quality stocks. But finding undervalued stocks is a little tricky right now. But here are seven stocks that meet that criterion for one or more reasons.

Ticker	Company	Current Price
WBA	Walgreens Boots Alliance, Inc.	$40.20
GS	The Goldman Sachs Group, Inc.	$282.54
TRV	The Travelers Companies, Inc.	$166.31
CSCO	Cisco Systems, Inc.	$42.91
MRK	Merck & Co., Inc.	$84.50
MMM	3M Company	$135.25
CVX	Chevron Corporation	$167.55

Walgreens Boots Alliance (WBA)

The first of the undervalued Dow stocks on my list is Walgreens Boots Alliance, Inc. (NASDAQ:WBA). For investors who like to use price-to-earnings (P/E) ratio, Walgreens currently has a P/E ratio of 5.73 which is significantly lower than the sector average of more than 16x.

Revenue looks to grow steadily over the next five years. However, investors may be a little concerned about the earnings outlook which is steady, but not spectacular. Time will tell if the company’s strategy in investing in wellness centers within its stores will be the catalyst for that growth.

Nonetheless, WBA stock is currently trading at the low end of its 52-week range. And analysts give WBA stock a 15.57% upside from its current price. And even if earnings growth is subdued, shareholders still get a dividend that pays a $1.91 per share annual dividend with a yield of 4.6%. Walgreens is also a dividend aristocrat having increased its dividend in each of the last 46 consecutive years.

Goldman Sachs (GS)

Next on the list of undervalued Dow stocks is The Goldman Sachs Group, Inc. (NYSE:GS). The investment bank has a P/E ratio of 5.57 which is about half the sector average. That sets the table for growth in an environment of rising interest rates.

GS stock is down about 25% in 2022, and it may have further to fall. With company’s adjusting their full-year profit forecasts, it may be wise to wait until the company’s next earnings report to get a better sense of how the second half will go. However, institutional buying has outpaced selling slightly in each of the last two quarters, which could be a bullish signal.

Although the company’s dividend yield is below the sector average, it is paying out an impressive $8.00 per share annual dividend which is an attractive benefit to shareholders. Goldman also bought back $2 million of shares in its prior quarter.

Travelers Companies (TRV)

A different alternative in the financial sector is to buy shares of one of the nation’s leading insurance companies. The Travelers Companies, Inc. (NYSE:TRV) is a defensive stock because insurance is always a necessity and Travelers is capturing revenue from niche markets such as pet insurance.

The company has been reporting year-over-year increases in both earnings and revenue.  And that is reflected in the TRV stock price which is holding on to an 8% gain for the year while the broader market is much further down.

Traveler’s has an attractive P/E ratio that is right around 10 and it has increased its dividend in each of the last 21 years. Currently, the company pays out $3.72 per share on an annual basis with a dividend yield of 2.2% that puts it on par with the S&P 500 index average.

Cisco Systems (CSCO)

Cisco Systems, Inc. (NASDAQ:CSCO) was one of the first companies to reduce its guidance. After the company posted bottom line and top line numbers that fell below analysts’ expectations, the tech gear maker lowered its guidance for the current quarter. However, it believes that the supply chain issues that led to lower financials are easing. And when they do, the company expects to meet its full-year earnings per share guidance.

Looking at the fundamentals, Cisco has a P/E ratio that is currently slightly below the sector average. And the company’s balance sheet looks strong. In the last three years, the company has earned over $14.5 billion in free cash flow (FCF).

And regarding its dividend, Cisco has a 13-year streak of increasing its dividend. It currently pays out $1.52 per share on an annual basis. And the yield of 3.5% is above the sector average of approximately 2.7%. It’s next payable on July 27 to shareholders of record on July 6.

Merck & Co. (MRK)

As Covid-19 moves into an endemic stage, investor attention is shifting back to some undervalued pharmaceutical companies. That’s what makes Merck & Co., Inc. (NYSE:MRK) an appealing option.

The company expects revenue for its cancer drug Keytruda to remain strong. And the company has a robust pipeline in place to set up future growth.

MRK stock is one of the few Dow stocks that is managing a gain for the year. As of this writing, it’s up 13% for the year and analysts believe that the stock has upside of approximately 5%.

In addition to those gains, investors are getting a reliable dividend that has been increasing for the last 12 years. It currently offers shareholders an annual payout of $2.76 with a dividend yield of 3.17%.

3M Company (MMM)

In what is becoming a theme, 3M Company (NYSE:MMM) recently lowered its revenue and earnings guidance for the current quarter.

The company says it expects a $300 million decline in revenue and a corresponding earnings decline of 30 cents per share. The leading culprit is ongoing supply chain issues resulting from Covid-related lockdowns in China.

That doesn’t completely explain investor apathy for MMM stock, which is down 22.5% in 2022. That slowdown seems to be due to the company likely to post its second straight quarter of declining revenue and earnings. But 3M has a P/E ratio of 14.32 which may explain why the stock is drawing interest from institutional investors.

3M also continues to generate significant free cash flow to support its dividend, which it has increased in each of the last 64 years.

Chevron (CVX)

The last name on this list of undervalued Dow stocks is the only oil and gas stocks in the Dow 30. Among energy companies, investors won’t find companies with a much stronger balance sheet than Chevron Corporation (NYSE:CVX).

Not only does the company have a very manageable net debt ratio of 10.8%, but it reported $8.1 billion in FCF in its last quarter.

And the company is planning to invest in its long-term growth including a continued push into renewable energy, particularly liquefied natural gas (LNG). The company says new LNG investments are a high priority.

CVX stock recently bounced off its 52-week high so investors may want to wait for confirmation that it is ready to break higher. But for those already invested in the stock, they can enjoy a solid dividend from a company that has increased its dividend in each of the last 35 years.

On the date of publication, Chris Markoch had a long position in MMM and CVX. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.