Buy low and sell high sounds easier than it is, but when premium stocks are trading below their true value, it's hard to miss.
Do you feel like you missed out bargain hunt? If so, you’re not alone. You had to be quick to snap up cheap dividend growth stocks when the S&P 500 is nearly flat in 2016.
So now it’s back to slim pickings for income investors. With the S&P 500 hitting new highs seemingly every day, valuations are stretched and dividend yields are down, as you can see from this snapshot of the trailing-twelve-month yield on the SPDR S&P 500
No matter how richly valued the market is, there are always strong dividend growers that aren’t getting a fair shake from investors.
Attached, in order of attractiveness, are 20 cheapest dividend champions that should be on your radar now.
The market has unfairly punished all of these businesses. You can take advantage of current discounts by loading up on these high-quality businesses trading at bargain prices.
Here are the cheapest dividend growth stocks with more than 25 consecutive years of dividend growth, sorted by forward P/E...
Dividend investors face a constant battle of choosing between dividend yield and sustainability.
Generally speaking, low yields are often sustainable but may be undesirable for investors looking to pad their portfolio with dividend income or reinvestment opportunities.
On the other end of the spectrum, high yields (let's say 5% and higher) are extremely attractive for income-seeking investors, but they're also often far more dangerous than lower yields due to a possible lack of sustainability.
Remember that dividend yields are a function of payout divided by share price, and if a stock's share price has been tumbling, its yield will rise. Thus, dividend investors have to be diligent to ensure that a yield isn't inflated solely because a company's business model is in trouble.
Attached you will find a list of stocks from the Russell 2000 with high yields. Most of them have free cashflow yield exceeding the dividend yield.
Here are the results...
You might not think of the Nasdaq as synonymous with big dividends. The Nasdaq Composite index, which essentially consists of every domestic and foreign stock that trades on the exchange, has long been heavy on technology and those technology companies have historically shown a bias for reinvesting their profits to finance future growth, rather than returning cash to shareholders.
But if you dig a little deeper, you’ll find some rich payouts. Attached are 50 Nasdaq-listed companies with generous dividends that have the potential to grow. Even better, many of the stocks are dirt cheap. The yields grow up to 8.06% and starts at 0.56%.
Several of the companies have similar profiles: large technology firms that are past their years of rapid growth but still throw off a lot of cash, which can be used to boost distributions. But the Nasdaq holds more than just tech, so we’ve also included a few companies from other sectors, as well as some less-well-known tech firms.
These are the latest dividend dogs from NASDAQ....
Companies that pay well above average dividend yields tend to have problems such as slowing growth or weaker balance sheets.
However, that high yield is the reward investors can earn by taking on a bit more risk. That said, sometimes the risks are not as bad as the market thinks, which makes the reward well worth it.
Attached you will find a couple of great dividend growth stocks with a healthy balance sheet and rosy growth persectives. Above all, the current price multiple, measured by forward P/E is at an acceptable level.
Here are 6 stocks that we think fit that profile....
Each company has a dividend yield of at least 3% and the ability to increase payouts.
With dividend stocks hot this year, some market experts are advising investors to be cautious and selective.
Identifying companies with room to raise dividends significantly, rather than focusing on finding the highest yields, might be your best way forward.
So we decided to take a deep dive into the S&P 1500 Composite Index, the S&P 400 Mid-Cap Index MID and the S&P Small-Cap 600 Index in order to identify possible dividend-stock bargains in every sector.
Here are all 29 stocks that passed the screen, broken down by sector:
