Dividend stocks are reclaiming interest after a long period of underperformance as investors rotate out of big technology stocks and other growth names that have led the bull market, Morningstar associate data analyst Frank Lee wrote in a recent blog post.
Many undervalued dividend names could offer opportunities for long-term investors, Lee said. Morningstar screened U.S. stocks in its coverage that have increased quarterly dividends, which can signal a company’s confidence in its future finances.
Analysts looked for companies that pay a quarterly dividend and declared a dividend payment in January. They tracked changes from previous dividend payouts, and filtered for companies that had a dividend increase of 2% or more in order to capture the most substantial changes. They excluded stocks with dividend yields of less than 2%.
They then selected companies that rated 4 or 5 stars, meaning that they are considered undervalued. These stocks, Lee said, offer investors the potential to benefit from increased dividend yields and the possibility that their investment values will grow.
See the gallery for the 12 stocks that made the cut, ranked by their dividend change. Year-to-date performance is as of March 13.
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