In this article, we discuss 5 best undervalued aristocrats to buy in September. If you want to read our detailed analysis of dividend aristocrats and value stocks, go directly to read 10 Best Undervalued Aristocrats to Buy in September.
5. Expeditors International of Washington, Inc. (NASDAQ:EXPD)
P/E Ratio: 11.1
Expeditors International of Washington, Inc. (NASDAQ:EXPD) is a Washington-based logistics and freight forwarding company. In Q2 2022, 28 hedge funds tracked by Insider Monkey owned stakes in the company, down from 38 in the previous quarter. These stakes hold a collective value of $348.8 million, compared with $615 million worth of stakes owned by hedge funds in the preceding quarter.
At the end of Q2 2022, Expeditors International of Washington, Inc. (NASDAQ:EXPD) reported cash and cash equivalents of $1.9 billion, up from $1.7 billion at the end of December. Its revenue for the quarter came in at $4.6 billion, which showed a 27.8% year-over-year growth. Moreover, its operating income grew by 23% to $506 million.
In May, Expeditors International of Washington, Inc. (NASDAQ:EXPD) declared a 15.5% hike in its quarterly dividend to $0.67 per share. This was the company’s 28th consecutive year of dividend growth. As of September 7, the stock’s dividend yield came in at 1.13%.
4. Chubb Limited (NYSE:CB)
P/E Ratio: 11.63
Chubb Limited (NYSE:CB) is a Switzerland-based insurance company that provides insurance services related to property and casualty, accidental and health, and reinsurance. On August 11, the company declared a quarterly dividend of $0.83 per share, consistent with its previous dividend. As of September 7, the stock’s dividend yield came in at 1.71%. The company has been raising its dividends consistently for the past 29 years.
In Q2 2022, Chubb Limited (NYSE:CB) reported an operating cash flow of $2.72 billion. The company’s operating income grew to $1.79 billion, up from $1.62 billion in the previous quarter. Its net income for the quarter came in at $1.22 billion and its revenue stood at $9.5 billion. The company returned $1.48 billion to shareholders during the quarter, $348 million of which represented dividend payments.
In July, Jefferies maintained its Buy rating on Chubb Limited (NYSE:CB) with a $244 price target, highlighting the company’s pricing power and innovative business model.
The number of hedge funds tracked by Insider Monkey owning stakes in Chubb Limited (NYSE:CB) stood at 35 in Q2 2022, growing from 31 in the previous quarter. These stakes are collectively valued at over $1.68 billion. Viking Global owned the largest position in the company in Q2.
Aristotle Capital Management mentioned Chubb Limited (NYSE:CB) in its Q1 2022 investor letter. Here is what the firm has to say:
“Our investment in Chubb began in the fourth quarter of 2015, shortly after ACE Limited announced it would acquire the Chubb Corporation, creating the largest global property and casualty insurance company by underwriting income. During our nearly seven-year holding period, the company’s combination progressed leading to the realization of main catalysts we had identified. These included cost savings, broadened product offerings and an expanded customer base, as well as enhanced distribution capabilities and improved pricing due to scale. In addition, Chubb successfully grew its profitable high-net-worth personal lines. While we still consider Chubb to be a high-quality business, few catalysts remain after what was, in our opinion, a remarkable run of successful business execution. As such, we decided to step aside in favor of what we believe to be a more optimal investment in Blackstone.”
3. Pentair plc (NYSE:PNR)
P/E Ratio: 13.24
Up next on our list of undervalued aristocrats is Pentair plc (NYSE:PNR), an American water treatment company that provides related services to its consumers. In July, Cowen reiterated its Outperform rating on the stock with a $65 price target, appreciating the company’s guidance, which was above investors’ expectations. The firm also highlighted the company’s pool business and its future prospects.
In Q2 2022, Pentair plc (NYSE:PNR) reported revenue of $1.02 billion, which showed an 8.4% year-over-year growth. The company’s operating cash flow for the quarter came in at $308 million and its free cash flow stood at $288 million. It paid $69.5 million in dividends during the quarter.
Pentair plc (NYSE:PNR) has been raising its dividends consistently for the past 46 years. The company currently pays a quarterly dividend of $0.21 per share and has a dividend yield of 1.86%, as of September 7.
At the end of June 2022, 31 hedge funds tracked by Insider Monkey owned stakes in Pentair plc (NYSE:PNR), compared with 38 in the previous quarter. The consolidated value of these stakes is roughly $947 million. Impax Asset Management was the company’s leading stakeholder in Q2, owning over 12.3 million shares.
2. Archer-Daniels-Midland Company (NYSE:ADM)
P/E Ratio: 13.63
Archer-Daniels-Midland Company (NYSE:ADM) is an American food processing company that is also a global leader in human and animal nutrition. The company ended the quarter with $906 million available in cash and cash equivalents, up from $869 million in the same period last year. Its operating cash flow for the quarter came in at $531 million while it generated $248 million in free cash flow.
Archer-Daniels-Midland Company (NYSE:ADM) has been making uninterrupted dividends for the past 90 years and maintains a 47-year streak of dividend growth. The company currently pays a quarterly dividend of $0.40 per share, with a dividend yield of 1.83%, as of September 7.
In August, Wolfe Research initiated its coverage of Archer-Daniels-Midland Company (NYSE:ADM) with an Outperform rating and a $117 price target, highlighting the company’s competitive dividend growth, which is generated through its Nutrition segment alone.
At the end of Q2 2022, 42 hedge funds in Insider Monkey’s database owned stakes in Archer-Daniels-Midland Company (NYSE:ADM), the same as in the previous quarter. These stakes hold a collective value of nearly $659 million, compared with $625.6 million worth of stakes owned by hedge funds in the preceding quarter.
Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
1. Caterpillar Inc. (NYSE:CAT)
P/E Ratio: 14.42
Caterpillar Inc. (NYSE:CAT) is an Illinois-based construction machinery and equipment company that also deals in insurance and financial services for its consumers. On June 8, the company announced an 8.1% hike in its quarterly dividend to $1.20 per share. The company has been raising its dividends consistently for the past 28 years. As of September 7, the stock’s dividend yield came in at 2.65%.
In Q2 2022, Caterpillar Inc. (NYSE:CAT) reported revenue of $14.2 billion, which showed an 11% growth from the same period last year. In the first half of the year, the company’s operating cash flow stood at $2.5 billion, and paid $600 million in dividends. This shows that the company’s cash position is stable to finance its shareholder returns.
In August, Credit Suisse raised its price target on the stock to $236 with an ‘Outperform’ rating on the shares as the firm sees strong demand across all segments of the company.
At the end of Q2, 45 of the hedge funds tracked by Insider Monkey’s database owned stakes in Caterpillar Inc. (NYSE:CAT), compared with 54 in the previous quarter. The collective value of those 45 stakes was over $3.25 billion. With a position worth over $1.3 billion, Fisher Asset Management owned the largest position in the company on June 30.
Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter. Here is what the firm had to say:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
You can also take a look at 10 Small-Cap Stocks that Pay Dividends and 10 Safe Dividend Stocks with Over 4% Yield
