10 Cheap Stocks With Reliable Dividends: Morningstar

In a new blog post, Morningstar investment specialist Susan Dziubinski lists 10 high-quality stocks for investors who are searching for the best dividend-paying stocks. These have durable dividends and are currently undervalued.

“After all, quality companies have the financial stability to maintain their dividends during questionable economic periods, and price risk is reduced when investors can buy the stocks of these companies on the cheap,” Dziubinski wrote.

She noted that Morningstar analysts selected these stocks from among the 75 high-yield stocks tracked on the Morningstar Dividend Yield Focus Index, a subset of the firm’s US Market Index. They chose only securities whose dividends are qualified income; they tossed out real estate investment trusts.

Companies on the index have been screened for quality, using the Morningstar economic moat and uncertainty ratings. The 10 selected companies each earned a moat rating of narrow or wide and an uncertainty rating of low, medium or high; those with very high or extreme uncertainty ratings were excluded.

See the accompanying gallery for the top 10 dividend stocks, each of which was undervalued and had Morningstar ratings of 4 or 5 stars as of April 12. Year-to-date performance is as of April 16.