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It's often easiest to buy a stock when it has seen a big gain, made plenty of money for shareholders and when everything appears to be going great for the company. Conversely, it can be very difficult to buy a stock that the market seems to hate, where investors have lost significant sums, and in a company that is facing challenges. However, buying out of favor stocks can sometimes lead to oversized gains, even multi-baggers, while buying the most loved stocks that are peaking in popularity can lead to losses or below par performance. The key to making money in stocks is often based on timing. Buying an unloved stock at or near the bottom can be a great way to buy low and eventually sell at much higher prices, when valuations and sentiment revert to the mean. With that in mind, here are two bargain dividend stocks that could be poised to outperform based on low expectations and cheap valuations:

VALE, S.A. (NYSE:VALE) is based in Brazil and it is one of the world's largest producers of iron ore, fertilizers and other basic commodities. This stock was once a favorite way to play the growth in China and other emerging market countries as those rising economies created strong demand for iron ore and fertilizer. However, the ongoing financial crisis and European debt woes have led to a slowdown in many parts of the world including in China, which has historically been one of the biggest importers of iron ore. Investor concerns over the global economy and a potential "hard-landing" in China have put tremendous pressure on Vale shares, which now trade near 52-week lows. However, these concerns seem to be overblown because even though China is not growing at double-digit rates now, it is still seeing growth of about 7% in the most recent quarter. That is the kind of growth many countries would dream of having. This looks like a solid entry point for longer-term investors because the shares trade for just about 7 times earnings, and are selling at a small premium to book value, which is about $15 per share. The best part might be that while waiting for a higher share price, shareholders are paid a very generous yield of over 6%.

Here are some key points for VALE:
Current share price: $18.34
The 52-week range is $15.77 to $26.87
Earnings estimates for 2012: $2.52 per share
Earnings estimates for 2013: $2.85 per share
Annual dividend: $1.15 per share, which yields 6.3%

Hewlett Packard (NYSE:HPQ) shares have plunged over concerns that the PC market is in a secular decline due to the rise of tablets and mobile devices. Many investors now view this company as being "old tech" and as having little growth prospect. It is true that PC sales have seen little to no growth in recent months, however, it's hard to see tablets taking over the world when it comes to certain applications. It does make sense that during a period of economic weakness that consumers and businesses would be slow to upgrade to new PCs. It also makes sense that when IT budgets or consumer budgets are being allocated, those fixed set of funds now have to choose between a tablet purchase or a PC upgrade in many cases. However, once tablets reach a saturation point, that might tip the scales back in the favor of PC upgrades. Another strong reason for weaker PC demand over the past 2 or 3 quarters is due to the upcoming introduction of Microsoft's (NASDAQ:MSFT) Windows 8 operating system. Any consumer or business that knows a certain product will soon see an upgraded or newer version has to think twice about buying until the latest model is available. That can temporarily reduce demand for the current model.

We can see temporary sales declines happen whether it is a new car design being introduced or a new iPhone model and it seems likely to be true for the PC industry as well. Once the Windows 8 operating system is widely available, consumers and businesses that might have been waiting to purchase might hit the buy button. Aside from that, Hewlett Packard shares appear incredibly cheap now as the stock plunged yet again after the company reduced earnings estimates for 2013, to a range of $3.40 to $3.60. But investors seem to be overreacting; how many $14 stocks do you know of, that are poised to earn well over $3 per share? In addition, this stock offers a solid dividend that now pays about 4%. The shares now trade below book value of $16.07 and below what some analysts feel the company is worth in a break-up or buyout scenario. A recent Forbes article states that a takeover by Oracle (NYSE:ORCL), could make sense and others believe that the company should spin off the PC division, so that the higher growth divisions can achieve market valuations that are being achieved by other companies. Either way, Hewlett Packard shares appear to be a deep value play that will pay shareholders a generous yield while they wait for a higher share price.

Here are some key points for HPQ:
Current share price: $14.33
The 52-week range is $14.02 to $30
Earnings estimates for 2012: $4.05 per share
Earnings estimates for 2013: $3.40 to $3.60 per share
Annual dividend: 53 cents per share, which yields 3.7%

Data sourced from Yahoo Finance. No guarantees or representations
are made.

Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: 2 Dividend Stock Bargains That Are Worth Buying Now