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10 Best Undervalued Dividend Stocks to Buy Now

In this article, we will discuss 10 best undervalued dividend stocks to buy now. You can skip our detailed analysis of value stocks and their performance in the past, and go directly to read 5 Best Undervalued Dividend Stocks to Buy Now

In the current market environment, value and defensive stocks are catching investors’ eyes. This year’s returns are putting value investing in the spotlight as the MSCI World Value Index is down by 18.05% as of September 30, compared with a 32.2% decline of the MSCI World Growth Index.

John Davi, the founder of Astoria Portfolio Advisors, told CNBC in October that investors should focus on high-quality stocks. He said that investing in value stocks with PE ratios between 10 to 11 is safe for investors in the current market environment. Inflation and continuous interest rates hike bode well for value stocks as they provide long-term investment opportunities. JPMorgan cited the data by Fama and French, which showed that value stocks cumulatively outplayed growth stocks for prolonged periods from July 1927 to January 2022.

According to Fidelity Investments, value stocks will continue to lead this year. The report also mentioned that value securities have surpassed the market two-thirds of the time from comparable relative valuations. In addition to value investing, dividend stocks are becoming appealing to investors because of their ability to produce regular income. Quality dividend companies with dividend growth histories and strong cash flow generation are increasingly becoming investors’ choices this year. Some of these stocks include AbbVie Inc. (NYSE:ABBV), Eli Lilly and Company (NYSE:LLY), and Becton, Dickinson and Company (NYSE:BDX). However, we will discuss undervalued dividend stocks to buy now in this article.

Photo by Nick Chong on Unsplash

Our Methodology:

The companies mentioned below have strong dividend policies and have P/E ratios of less than 15. We examined these stocks in light of analysts’ ratings and also measured hedge fund sentiment around each stock, according to Insider Monkey’s Q2 2022 data of 895 elite funds. The stocks are ranked according to their P/E ratios.

10 Best Undervalued Dividend Stocks to Buy Now

10. Diamondback Energy, Inc. (NASDAQ:FANG)

P/E Ratio: 6.90

Diamondback Energy, Inc. (NASDAQ:FANG) is a Texas-based energy company that is involved in the exploration of hydrocarbons. In the second quarter of 2022, the company’s operating cash flow came in strong at $1.7 billion, compared with $1.2 billion in the prior-year quarter. Its free cash flow stood at $1.3 billion and it commits to pay at least 75% of FCF in shareholder return.

On August 1, Diamondback Energy, Inc. (NASDAQ:FANG) declared a 7.1% hike in its quarterly dividend to $0.75 per share. This was the company’s third consecutive quarter of dividend increase. Moreover, the company has been raising its dividends consistently for the past three years, which makes it one of the best dividend stocks on our list. As of October 24, the stock has a dividend yield of 1.96%.

In October, Piper Sandler raised its price target on Diamondback Energy, Inc. (NASDAQ:FANG) to $209 with an Overweight rating on the shares. The firm presented a positive stance on exploration and production companies.

At the end of Q2 2022, 54 hedge funds tracked by Insider Monkey owned stakes in Diamondback Energy, Inc. (NASDAQ:FANG), growing from 47 in the previous quarter. These stakes have a collective value of over $811.3 million. Citadel Investment Group was the company’s leading stakeholder in Q2.

In addition to some of the best dividend stocks like AbbVie Inc. (NYSE:ABBV), Eli Lilly and Company (NYSE:LLY), and Becton, Dickinson and Company (NYSE:BDX), Diamondback Energy, Inc. (NASDAQ:FANG) is also gaining investors’ attention.

9. Best Buy Co., Inc. (NYSE:BBY)

P/E Ratio: 8.56

Best Buy Co., Inc. (NYSE:BBY) is a Minnesota-based consumer electronics retailer. Recently, the company launched a new Upgrade+ program which will allow customers to upgrade their MacBooks easily and at affordable prices. Its announcement came just ahead of the holiday shopping season.

Best Buy Co., Inc. (NYSE:BBY) is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past nine years. Currently, it pays a quarterly dividend of $0.88 per share, with a dividend yield of 5.49%. In fiscal Q2 2023, Best Buy Co., Inc. (NYSE:BBY) returned $208 million to shareholders, $198 million of which represented dividend payments.

In September, Loop Capital raised its price target on Best Buy Co., Inc. (NYSE:BBY) to $110 with a Buy rating on the shares, appreciating the company’s extremely competitive prices. The firm also said that the company is attractively valued relative to other retailers.

According to Insider Monkey’s data, 26 hedge funds owned stakes in Best Buy Co., Inc. (NYSE:BBY) in Q2 2022, up from 25 in the previous quarter. The consolidated value of these stakes is over $406.8 million, compared with $251.4 million worth of stakes owned by hedge funds in the preceding quarter.

8. Truist Financial Corporation (NYSE:TFC)

P/E Ratio: 9.80

Truist Financial Corporation (NYSE:TFC) is a North Carolina-based bank holding company that provides corporate and investment banking services to its consumers. In October, RBC Capital maintained an Outperform rating on the stock with a $60 price target. The firm remained positive about the company’s diversified business model and its one of the best-positioned banking franchises in the US.

On July 26, Truist Financial Corporation (NYSE:TFC) declared an 8% growth in its quarterly dividend to $0.52 per share. This was the company’s second consecutive year of dividend growth after 2020 when it stopped raising dividends due to the pandemic. In Q3 2022, the company payout ratio stands at a healthy 45%.

In the third quarter of 2022, Truist Financial Corporation (NYSE:TFC) reported revenue of $5.88 billion, which showed a 4.4% growth from the same period last year. The company’s net income stood at $1.5 billion and its insurance holdings net income was $95 million.

As of the close of Q2 2022, 33 hedge funds in Insider Monkey’s database owned stakes in Truist Financial Corporation (NYSE:TFC), compared with 36 in the previous quarter. These stakes have a consolidated value of roughly $658 million. Among these hedge funds, Diamond Hill Capital owned the largest position in the company.

7. T. Rowe Price Group, Inc. (NASDAQ:TROW)

P/E Ratio: 10.10

T. Rowe Price Group, Inc. (NASDAQ:TROW) is a Maryland-based investment management company that offers a wide range of financial advisory services to its consumers.

T. Rowe Price Group, Inc. (NASDAQ:TROW) is added to our list of the best dividend stocks as it has been raising its payouts consistently for the past 36 years. It currently pays a quarterly dividend of $1.20 per share for a dividend yield of 4.61%. Moreover, in its recent quarterly earnings, the company reported strong cash generation. T. Rowe Price Group, Inc. (NASDAQ:TROW) paid $476.6 million to shareholders in dividends which takes its payout ratio to 43.9%.

As of the close of Q2 2022, 27 hedge funds tracked by Insider Monkey reported owning stakes in T. Rowe Price Group, Inc. (NASDAQ:TROW), compared with 33 in the previous quarter. These stakes have a collective value of over $262.1 million.

6. Lincoln National Corporation (NYSE:LNC)

P/E Ratio: 10.69

Another best dividend stock on our list is Lincoln National Corporation (NYSE:LNC), which is a multinational insurance company. The company remained a popular buy among elite funds in Q2 2022, with 34 hedge fund positions, up from 25 in the previous quarter. The stakes owned by these funds have a total value of $451.4 million.

In the second quarter of 2022, Lincoln National Corporation (NYSE:LNC) generated roughly $2 billion in operating cash flow, compared with $339 million during the same period last year. The company returned $177 million to shareholders, $77 million of which represented dividend payments. Its revenue for the quarter came in at $5.1 billion, up 4.1% from the prior-year quarter.

Lincoln National Corporation (NYSE:LNC) has an 11-year streak of dividend growth, which makes it one of the best dividend stocks. The company currently pays a quarterly dividend of $0.45 per share and has a dividend yield of 3.49%, as of October 24.

In October, JPMorgan maintained an Overweight rating on Lincoln National Corporation (NYSE:LNC) with a $68 price target. The firm mentioned that interest rates hike is positive for the insurance sector.

Due to its strong cash flow and dividend growth history, Lincoln National Corporation (NYSE:LNC) is a good option alongside AbbVie Inc. (NYSE:ABBV), Eli Lilly and Company (NYSE:LLY), and Becton, Dickinson and Company (NYSE:BDX).

Click to continue reading and see 5 Best Undervalued Dividend Stocks to Buy Now

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Disclosure. None. 10 Best Undervalued Dividend Stocks to Buy Now is originally published on Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

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This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…