In this article, we will be taking a look at the 10 best value dividend stocks to buy now. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Best Value Dividend Stocks to Buy Now.
Value investing, the investment strategy pioneered by American economist Benjamin Graham, and religiously heeded by some of the most successful investors today, like Warren Buffett, is a strategy that can very easily complement dividend investing. While dividend stocks like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT) are undoubtedly popular investment choices at present, value stocks are nothing if not a match for them in terms of their popularity. Perhaps this is because of major proponents of the strategy itself, like Buffett, who is currently the seventh-richest person in the world with a net value of over $100 billion.
The above is justifiable when we take a look at the performance of value stocks so far this year. According to a Reuters report from this April, for instance, the Russell 1000 value index was seen to have outperformed its growth counterpart as 2021 began. The outperformance broke the index’s performance records for the past 20 years at least, and popularity levels of value stocks skyrocketed and have done so since, as investors began picking up shares of these very companies.
This popularity may be due, in part, to the fact that value stocks are just cheaper than others oftentimes. For instance, according to Peter Berezin, who is the chief global strategist at BCA research, in 2021 as of April, value stocks were trading at about 74% cheaper than their growth counterparts, on the basis of stock price-to-book measures. This discount, so to speak, is at the end of the day the charm of a value stock. They have high intrinsic potential, yet despite it trade at unfair rates, giving investors the chance to snap them up while they can, and benefit in the aftermath.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let’s take a look at the 10 best value dividend stocks to buy now.
Our Methodology
We have picked value dividend stocks with yields over 2% and going up to 6%. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest yield. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Best Value Dividend Stocks to Buy Now
10. Summit Industrial Income REIT (OTC: SMMCF)
Number of Hedge Fund Holders: N/A
Dividend Yield: 2.63%
Summit Industrial Income REIT (OTC: SMMCF), an unincorporated open-end REIT, deals with a portfolio of light industrial and other properties in Canada. The company ranks 10th on our list of the best value dividend stocks to buy now, and is based in Ontario.
RBC Capital’s Matt Logan raised the price target on Summit Industrial Income REIT (OTC: SMMCF) to $18 just this August, alongside reiterating a Sector Perform rating on the stock.
In the second quarter of 2021, Summit Industrial Income REIT (OTC: SMMCF) had an FFO of $0.12. The company’s revenue was $42.83 million, up 18.1% year over year and beating the previous quarter’s revenue of $42.32 million. Summit Industrial Income REIT (OTC: SMMCF) has gained 59.65% in the past 6 months and 65.55% year to date.
Like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT), Summit Industrial Income REIT (OTC: SMMCF) is a good stock to invest in.
9. Bristol-Myers Squibb Company (NYSE: BMY)
Number of Hedge Fund Holders: 73
Dividend Yield: 2.86%
Bristol-Myers Squibb Company (NYSE: BMY), a biopharmaceutical company, licenses and manufactures biopharmaceuticals for distribution globally. The company ranks 9th on our list of the best value dividend stocks to buy now.
This July, Robyn Karnauskas, an analyst at Truist, took over coverage of Bristol-Myers Squibb Company (NYSE: BMY) with a Buy rating and a $74 price target.
In the second quarter of 2021, Bristol-Myers Squibb Company (NYSE: BMY) had an EPS of $1.93, beating estimates by $0.03. The company’s revenue was $11.70 billion, up 15.54% year over year and beating estimates by $474.30 million. Bristol-Myers Squibb Company (NYSE: BMY) has gained 8.78% in the past 6 months and 10.05% year to date.
By the end of the second quarter of 2021, 73 hedge funds out of the 873 tracked by Insider Monkey held stakes in Bristol-Myers Squibb Company (NYSE: BMY) worth roughly $5.2 billion. This is compared to 81 hedge funds in the previous quarter with a total stake value of approximately $5 billion.
Like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT), Bristol-Myers Squibb Company (NYSE: BMY) is a good stock to invest in.
8. Lockheed Martin Corporation (NYSE: LMT)
Number of Hedge Fund Holders: 58
Dividend Yield:
Lockheed Martin Corporation (NYSE: LMT) is a security and aerospace company that researches, designs, develops, manufactures, integrates, and sustains technology systems and products worldwide. It ranks 8th on our list of the best value dividend stocks to buy now.
Susquehanna’s Charles Minervino this July reiterated a Positive rating and $446 price target on shares of Lockheed Martin Corporation (NYSE: LMT).
In the second quarter of 2021, Lockheed Martin Corporation (NYSE: LMT) had an EPS of $6.52, in line with estimates. The company’s revenue was $17.03 billion, up 4.99% year over year and beating estimates by $89.10 million. Lockheed Martin Corporation (NYSE: LMT) has gained 5.13% in the past 6 months and 4.23% year to date.
By the end of the second quarter of 2021, 58 hedge funds out of the 873 tracked by Insider Monkey held stakes in Lockheed Martin Corporation (NYSE: LMT) worth roughly $1.6 billion. This is compared to 50 hedge funds in the previous quarter with a total stake value of approximately $2.3 billion.
Like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT), Lockheed Martin Corporation (NYSE: LMT) is a good stock to invest in.
7. Merck & Company, Inc. (NYSE: MRK)
Number of Hedge Fund Holders: 79
Dividend Yield: 3.4%
Merck & Company, Inc. (NYSE: MRK), a healthcare company, provides a wide variety of medical products to its consumers. The company has collaborations with others like AstraZeneca PLC (NASDAQ: AZN). It ranks 7th on our list of the best value dividend stocks to buy now.
Mara Goldstein from Mizuho this July reiterated a Buy rating on shares of Merck & Company, Inc. (NYSE: MRK), alongside a $100 price target.
In the second quarter of 2021, Merck & Company, Inc. (NYSE: MRK) had an EPS of $1.31, missing estimates by $0.04. The company’s revenue was $11.40 billion, up 4.87% year over year and beating estimates by $208.55 million. Merck & Company, Inc. (NYSE: MRK) has gained 7.67% in the past 6 months.
By the end of the second quarter of 2021, 79 hedge funds out of the 873 tracked by Insider Monkey held stakes in Merck & Company, Inc. (NYSE: MRK) worth roughly $5.3 billion. This is compared to 79 hedge funds in the previous quarter with a total stake value of approximately $6.5 billion.
Like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT), Merck & Company, Inc. (NYSE: MRK) is a good stock to invest in.
6. Telephone and Data Systems, Inc. (NYSE: TDS)
Number of Hedge Fund Holders: 18
Dividend Yield: 3.5%
Telephone and Data Systems, Inc. (NYSE: TDS), a telecommunications company, operates through its UScellular, Wireline, and Cable segments to provide communications services in America. The company ranks 6th on our list of the best value dividend stocks to buy now.
Citigroup raised the price target on Telephone and Data Systems, Inc. (NYSE: TDS) from $27 to $29 this May, while also reiterating a Buy rating on it.
In the second quarter of 2021, Telephone and Data Systems, Inc. (NYSE: TDS) had an EPS of $0.17, missing estimates by $0.04. The company’s revenue was $1.31 billion, up 3.8% year over year and beating estimates by $4.64 million. Telephone and Data Systems, Inc. (NYSE: TDS) has gained 10.37% in the past 6 months and 6.78% year to date.
By the end of the second quarter of 2021, 18 hedge funds out of the 873 tracked by Insider Monkey held stakes in Telephone and Data Systems, Inc. (NYSE: TDS) worth roughly $160 million. This is compared to 20 hedge funds in the previous quarter with a total stake value of approximately $253 million.
Like Medtronic plc (NYSE: MDT), Morgan Stanley (NYSE: MS), JPMorgan Chase & Co. (NYSE: JPM), and Abbott Laboratories (NYSE: ABT), Telephone and Data Systems, Inc. (NYSE: TDS) is a good stock to invest in.
Click to continue reading and see the 5 Best Value Dividend Stocks to Buy Now.
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Disclosure: None. 10 Best Value Dividend Stocks to Buy Now is originally published on Insider Monkey.
