I doubt dividend stock are undervalued, I highly suspect they are OVERVALUED given that so many people get the feels-goods with dividends, no recognizing that they could (after 1 year) just sale a portion of their non-dividend paying stock to get the same effect (but even better, as in a sale they get basis offset, but dividends do not). Dividend discount model is familiar, but its utterly retarded if it does not take into account the value of the underlying investment, and the potential proceeds from a sale. It is the discounted total cash flow model that matters. It doesn't take a BS in finance to figure this out, of course...
Some friendly advice. Buy only Company B, and for god sake don't buy Company C that will use their retained earnings to pay executive bonuses. Company B, thank goodness, would never do that.