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March 06, 2024 at 01:39 PM
Growth stocks have powered past dividend stocks over the last year, but long-term investors can find undervalued dividend payers among those left behind, including stocks that have been raising payouts, Morningstar’s chief markets editor, Tom Lauricella, wrote in a blog post this week.
Lauricella noted that investors can look for either stocks that offer the highest yields, names with a history of stable dividend payouts and robust finances or companies that are raising dividends.
Morningstar analysts took the latter course, screening stocks that have increased their quarterly dividends. This can be a sign of a company’s confidence in its future finances, he said.
To come up with a list of stocks for investors to consider, Morningstar analysts started with the full list of U.S.-based companies they cover and looked for names that pay investors a quarterly dividend. They then tracked changes from previous payouts in dividends announced in February.
From there, they filtered for companies whose dividend increased by 5% or more to capture the most substantial changes. They excluded stocks with dividend yields of less than 2%. After that, they picked companies they considered undervalued, meaning they are rated 4 or 5 stars.
See the gallery for 13 undervalued, dividend-paying stocks that passed Morningstar analysts’ screen. Year-to-date performance is as of March 6.
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