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3 Undervalued Dividend Stocks to Buy for an Affluent Retirement
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One needs to have a robust investment strategy to ensure a comfortable retirement life. Adding stocks with rich dividend-paying history is a sound addition to one’s investment portfolio.
In most cases, companies that pay stable dividends are usually less volatile than stocks that do not have a dividend policy. Dividend-paying stocks carry low risk and are favored as these reduce the overall portfolio risk. Investing in dividend stocks, especially amid the ongoing macroeconomic headwinds and the highly volatile market scenario, is likely to fetch healthy returns.
To generate significant capital appreciation over the long term, investors would immensely benefit if they sorted stocks using value investing alongside their dividend history.
Investors need to watch for undervalued stocks with robust long-term growth opportunities to hedge their portfolio risk amid the current tumultuous market scenario. Undervalued stocks cushion investors from the vagaries of markets, while companies’ solid fundamentals safeguard portfolio returns. However, picking such stocks from a myriad of investment opportunities is difficult.
Here the Zacks Style Score comes to the rescue. The Growth Style Score condenses all the crucial metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth while the Value Style Score aids in filtering stocks that are undervalued.
Stocks with the combination of a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a Value and Growth Score of A or B offer solid investment opportunities.
With the help of Zacks Stock Screener, we have sorted three stocks — Conagra Brands (CAG - Free Report) , F.N.B. Corporation (FNB - Free Report) , and DCP Midstream, LP — which look promising based on their dividend yield (higher than 3%), favorable Zacks Rank, and encouraging Value and Growth score.
The Zacks Consensus Estimate for 2022 earnings has been revised upward by 84 cents to $4.47 per share over the past 60 days, indicating a year-over-year increase of 181.1%.
On the basis of the five-year 12-month price-to-earnings ratio (P/E), we see that the stock is currently trading at 7.86X compared with the sub-industry’s forward 12-month P/E of 14.61X. Moreover, the company is trading 4.1% below its 52-week high of $40.23 reached on Oct 31, 2022.
DCP Midstream is gaining from increased NGL pipeline throughput. The master limited partnership strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid more than $300 million in absolute debt. The midstream player is gaining from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices.
Conagra – The company currently sports a Zacks Rank #2 and has a Growth Score of B and a Value Score of A. The Zacks Consensus Estimate for fiscal 2023 earnings has been revised upward by 1 cent to $2.44 per share in the past 30 days, indicating a year-over-year increase of 3.4%.
On the basis of the five-year forward 12-month P/E ratio, we see that the stock is currently trading at 15.37X compared with the sub-industry’s forward 12-month P/E of 18.61X.
Conagra is benefiting from its robust pricing actions, which aided the top line in the first quarter of fiscal 2023. Results gained from strength in the company’s brands, efficient pricing and ongoing execution of the Conagra Way playbook. The company delivered improved service and productivity amid ongoing inflationary pressure and global supply chain troubles. In the fiscal first quarter, the price/mix improved by 14.3% and aided the organic sales growth of 9.7%. Conagra also paid dividends worth $150 million and repurchased shares worth $50 million in the fiscal first quarter.
F.N.B. Corporation – The company currently carries a Zacks Rank #2 and has a Growth Score of B and a Value Score of A. The Zacks Consensus Estimate for 2022 earnings has been revised upward by 6 cents to $1.36 per share over the past 60 days, indicating a year-over-year increase of 9.7%.
On the basis of the five-year forward 12-month P/E ratio, we see that the stock is currently trading at 8.53X compared with the sub-industry’s forward 12-month P/E of 9.23X. The company is trading 7.5% below its 52-week high of $14.71 on Nov 11, 2022.
FNB’s top-line growth is likely to gain from solid loan balances, higher interest rates and efforts to improve fee income. Manageable debt levels and a healthy liquidity position augur well and will likely keep supporting the company’s strategy to grow inorganically and through branch openings.
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3 Undervalued Dividend Stocks to Buy for an Affluent Retirement
One needs to have a robust investment strategy to ensure a comfortable retirement life. Adding stocks with rich dividend-paying history is a sound addition to one’s investment portfolio.
In most cases, companies that pay stable dividends are usually less volatile than stocks that do not have a dividend policy. Dividend-paying stocks carry low risk and are favored as these reduce the overall portfolio risk. Investing in dividend stocks, especially amid the ongoing macroeconomic headwinds and the highly volatile market scenario, is likely to fetch healthy returns.
To generate significant capital appreciation over the long term, investors would immensely benefit if they sorted stocks using value investing alongside their dividend history.
Investors need to watch for undervalued stocks with robust long-term growth opportunities to hedge their portfolio risk amid the current tumultuous market scenario. Undervalued stocks cushion investors from the vagaries of markets, while companies’ solid fundamentals safeguard portfolio returns. However, picking such stocks from a myriad of investment opportunities is difficult.
Here the Zacks Style Score comes to the rescue. The Growth Style Score condenses all the crucial metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth while the Value Style Score aids in filtering stocks that are undervalued.
Stocks with the combination of a Zacks Rank #1 (Strong Buy) or #2 (Buy) and a Value and Growth Score of A or B offer solid investment opportunities.
With the help of Zacks Stock Screener, we have sorted three stocks — Conagra Brands (CAG - Free Report) , F.N.B. Corporation (FNB - Free Report) , and DCP Midstream, LP — which look promising based on their dividend yield (higher than 3%), favorable Zacks Rank, and encouraging Value and Growth score.
3 Undervalued Dividend Stocks to Watch For
DCP Midstream – The company currently sports a Zacks Rank #1 and has a Growth Score of A and a Value Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
DCP Midstream Partners, LP Price and Consensus
DCP Midstream Partners, LP price-consensus-chart | DCP Midstream Partners, LP Quote
The Zacks Consensus Estimate for 2022 earnings has been revised upward by 84 cents to $4.47 per share over the past 60 days, indicating a year-over-year increase of 181.1%.
On the basis of the five-year 12-month price-to-earnings ratio (P/E), we see that the stock is currently trading at 7.86X compared with the sub-industry’s forward 12-month P/E of 14.61X. Moreover, the company is trading 4.1% below its 52-week high of $40.23 reached on Oct 31, 2022.
The stock has a dividend yield of 4.5% and the payout ratio is 34% of earnings at present. Check DCP’s dividend history here.
DCP Midstream is gaining from increased NGL pipeline throughput. The master limited partnership strongly focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid more than $300 million in absolute debt. The midstream player is gaining from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices.
Conagra – The company currently sports a Zacks Rank #2 and has a Growth Score of B and a Value Score of A. The Zacks Consensus Estimate for fiscal 2023 earnings has been revised upward by 1 cent to $2.44 per share in the past 30 days, indicating a year-over-year increase of 3.4%.
Conagra Brands Price and Consensus
Conagra Brands price-consensus-chart | Conagra Brands Quote
On the basis of the five-year forward 12-month P/E ratio, we see that the stock is currently trading at 15.37X compared with the sub-industry’s forward 12-month P/E of 18.61X.
The stock has a dividend yield of 3.5% and the payout ratio is 54% of earnings at present. Check Conagra’s dividend history here.
Conagra is benefiting from its robust pricing actions, which aided the top line in the first quarter of fiscal 2023. Results gained from strength in the company’s brands, efficient pricing and ongoing execution of the Conagra Way playbook. The company delivered improved service and productivity amid ongoing inflationary pressure and global supply chain troubles. In the fiscal first quarter, the price/mix improved by 14.3% and aided the organic sales growth of 9.7%. Conagra also paid dividends worth $150 million and repurchased shares worth $50 million in the fiscal first quarter.
F.N.B. Corporation – The company currently carries a Zacks Rank #2 and has a Growth Score of B and a Value Score of A. The Zacks Consensus Estimate for 2022 earnings has been revised upward by 6 cents to $1.36 per share over the past 60 days, indicating a year-over-year increase of 9.7%.
On the basis of the five-year forward 12-month P/E ratio, we see that the stock is currently trading at 8.53X compared with the sub-industry’s forward 12-month P/E of 9.23X. The company is trading 7.5% below its 52-week high of $14.71 on Nov 11, 2022.
F.N.B. Corporation Price and Consensus
F.N.B. Corporation price-consensus-chart | F.N.B. Corporation Quote
The stock has a dividend yield of 3.7% and the payout ratio is 38% of earnings at present. Check FNB’s dividend history here.
FNB’s top-line growth is likely to gain from solid loan balances, higher interest rates and efforts to improve fee income. Manageable debt levels and a healthy liquidity position augur well and will likely keep supporting the company’s strategy to grow inorganically and through branch openings.