We all want cheap, high-quality stocks.

They’re sometimes difficult to find, but awfully rewarding when you come upon one with capital in hand.

Even better if you score a deal on a stock that pays a dividend.

That means you are basically “paid to wait”.

The stock may turnaround quickly, or it may not.

But a dividend ensures you’re collecting some cash while Mr. Market makes up his mind.

I focus on these stocks.

Cheap, high-quality stocks that pay dividends.

More specifically, I want stocks that grow their dividends as well.

There are hundreds of US-listed stocks on the market that not only pay dividends, but have increased their respective payouts for at least the last five consecutive years. You can check them out here.

But not every single one is a great buy right now.

That’s why I focus on those that are priced below what they’re worth.

Just like anything in life, I’m trying to buy $1 for $0.50.

Valuing stocks is part art and part science, and it takes some time to become comfortable with it.

If you haven’t yet, I’d recommend checking out Dave Van Knapp’s guide to valuation, which offers a lot of valuable insight here.

It’s incredibly important to learn how to do this if you’re interested in buying individual stocks, as you could not only potentially save yourself a lot of money by avoiding unnecessary losses, but also boost your potential gains over a long period of time.

For instance, I bought a 2006 Toyota Corolla with approximately 20,000 miles for $5,400 at the end of 2013. The car was really worth more than $10,000.

That means that I could probably drive the car around for a few years “for free” and later sell it for the same price I paid.

It’s along the same lines with stocks: Buy a stock for less than it’s worth and you could potentially collect “free” upside.

Take General Dynamics Corporation (GD), my most recent Undervalued Dividend Growth Stock Of The Week. It offers a market-beating yield, double-digit dividend growth, a very low payout ratio, almost 30 consecutive years of dividend raises, and the potential that shares are 11% undervalued. If you’re looking for a cheap, high-quality dividend growth stock, look no further.

–Jason Fieber

P.S. General Dynamics is just one of my Top 10 Stocks for 2020. All 10 stocks I’ve identified are high-quality dividend growth stocks with above average yields and attractive valuations. In fact, if I had $10,000 to invest in just 10 stocks, these are the first 10 stocks I’d consider right now. Click here to learn more.