One of the most common pitfalls for investors is their tendency to chase returns in the market; that is to say, many investors are prone to being lured by “hot” names on Wall Street that are making big gains, as opposed to focusing on the “out of favor,” high-quality companies that may be due for a rebound. But it's risky to follow market gurus or to go with the trend.Maybe a better approach could be buying, fundamentally-sound dividend stocks that seem to be underpriced at the moment. Make no mistake, like many feats in the investing world, this one is also easier said than done.
As such, below we’ve tried to discover a few undervalued stocks that might be interesting for income investors. We've used a tool with data from CapitalIQ, a Standard&Poors Company.
These stocks pay at least 2% dividend and are available at a discount to their share price.
The
following criteria have been used to create this view:
- Modest
dividend of at least 2%
-
Potentially undervalued Discount > 10%)
- An
acceptable financial position.
- No 'warning' companies
The forward P/E from most of the results are close to 10 or below.
These are the results:
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| 20 Potentially Undervalued Dividend Stocks (click to enlarge) |
