In this article, we discuss 5 undervalued dividend stocks to buy in September. If you want to read our detailed analysis of dividend and value stocks, go directly to read 10 Best Undervalued Dividend Kings to Buy in September.
5. Emerson Electric Co. (NYSE:EMR)
P/E Ratio: 15.43
Emerson Electric Co. (NYSE:EMR) is a Missouri-based manufacturing company that also provides engineering services for industrial, commercial, and consumer markets. Appreciating the company’s strong earnings in the recent quarter, Argus lifted its price target on the stock in August to $98 and maintained a Buy rating on the shares. The firm also highlighted the company’s strong balance sheet and one of the market’s longest dividend growth streaks.
Emerson Electric Co. (NYSE:EMR) has been raising its dividends consistently for the past 64 years. It pays a quarterly dividend of $0.515 per share and has a yield of $2.53%, as recorded on September 6.
In Q2 2022, Emerson Electric Co. (NYSE:EMR) reported an operating cash flow of $740 million, up from $442 million in the previous quarter. The company generated $630 million in free cash flow during the quarter, compared with $333 million in the preceding quarter. Its revenue for the quarter also grew by 7% year-over-year to $5 billion.
The number of hedge funds tracked by Insider Monkey owning stakes in Emerson Electric Co. (NYSE:EMR) stood at 47 in Q2 2022, growing from 45 in the previous quarter. The collective value of these stakes is over $1.2 billion. D E Shaw is one of the company’s most prominent stakeholders in Q2, owning stakes worth over $88 million.
4. 3M Company (NYSE:MMM)
P/E Ratio: 16.28
An American multinational consumer goods company, 3M Company (NYSE:MMM) holds one of the longest dividend growth streaks in the market. The company has been raising its payouts consistently for the past 64 years. Moreover, it has paid uninterrupted dividends to shareholders for over 100 years. The company currently pays a quarterly dividend of $1.49 per share and has an attractive yield of 5.11%, as recorded on September 6.
In Q2 2022, 3M Company (NYSE:MMM) reported an operating cash flow of $1.1 billion and its free cash flow came in at $1 billion. The company’s dividends for the quarter amounted to $800 million, signaling strong FCF generation. It generated 8.7 billion in revenues in Q2 and also reported a 1% year-over-year growth in its organic sales.
In August, Bernstein resumed its coverage of 3M Company (NYSE:MMM) with a Market Perform rating and a $155 price target, highlighting the company’s mid-single digits annual earnings.
At the end of Q2 2022, 54 hedge funds tracked by Insider Monkey had over $1.38 billion worth of investments in 3M Company (NYSE:MMM). In the previous quarter, 51 hedge funds owned stakes in the Minnesota-based company, valued at over $1.53 billion.
Mayar Capital mentioned 3M Company (NYSE:MMM) in its Q2 2022 investor letter. Here is what the firm has to say:
“We also bought back into 3M (NYSE:MMM) as the stock reached attractive levels. We’d sold our shares in 3M last year when the price exceeded our estimated fair value, and as better opportunities to invest in presented themselves at the time. Nonetheless, we’ve always liked this business with its diversified revenues, its R&D leadership and its stable margins.
3. Dover Corporation (NYSE:DOV)
P/E Ratio: 16.30
Dover Corporation (NYSE:DOV) is an American manufacturing company that delivers innovative equipment and components and consumable supplies. In Q2 2022, the company reported revenue of $2.16 billion, which showed a 6.4% year-over-year growth. The company’s operating cash flow for the quarter came in at $178.7 million, compared with $23.6 million in the previous quarter. Its free cash flow also jumped to $128.5 million, from $26.7 million in the preceding quarter.
On August 4, Dover Corporation (NYSE:DOV) declared a 1% hike in its quarterly dividend to $0.505 per share. This was the company’s 67th consecutive year of dividend growth. As of September 6, the stock’s dividend yield came in at 1.57%.
In July, Mizuho reiterated its Buy rating on Dover Corporation (NYSE:DOV) with a $155 price target, as customers’ ordering behaviors are normalizing after the pandemic.
Adage Capital Management owned stakes worth over $100 million in Dover Corporation (NYSE:DOV), becoming the company’s leading stakeholder in Q2. Overall, 30 hedge funds in Insider Monkey’s database owned stakes in the company in Q2, up from 27 in the previous quarter. These stakes hold a total value of $420.3 million.
2. Commerce Bancshares, Inc. (NASDAQ:CBSH)
P/E Ratio: 17.51
Another undervalued dividend king to buy on this list is Commerce Bancshares, Inc. (NASDAQ:CBSH), a Missouri-based bank holding company. The company provides services in mortgages, loans, and credit cards. In July, Jefferies maintained its Hold rating on the stock with a $71 price target, highlighting the company’s strong loan growth and net interest income.
In Q2 2022, Commerce Bancshares, Inc. (NASDAQ:CBSH) reported an operating cash flow of over $161.6 million, up from $124.5 million in the previous quarter. The company generated $148.2 million in free cash flow, compared with $109 million in the preceding quarter. During the quarter, it paid roughly $32 million in dividends, which shows its strong FCF generation.
Commerce Bancshares, Inc. (NASDAQ:CBSH) currently pays a quarterly dividend of $0.265 per share, with a dividend yield of 1.57%, as of September 6. The company is a dividend king with 53 years of consecutive dividend growth.
At the end of June 2022, 17 hedge funds in Insider Monkey’s database owned stakes in Commerce Bancshares, Inc. (NASDAQ:CBSH), valued at $112.7 million. In the previous quarter, 16 hedge funds owned stakes in the banking company, with a total worth of $132.2 million.
1. Northwest Natural Holding Company (NYSE:NWN)
P/E Ratio: 20.00
Northwest Natural Holding Company (NYSE:NWN) is an Oregon-based natural gas distribution company. In Q2 2022, 10 hedge funds tracked by Insider Monkey owned stakes in the company, falling from 22 in the previous quarter. The consolidated value of these stakes is over $38.2 million.
On August 4, Northwest Natural Holding Company (NYSE:NWN) reported its Q2 2022 results, posting revenue of $194.9 million, up 31% from the same period last year. In the first six months of the year, its operating cash flows came in at $196.6 million, compared with $194 million in the prior-year quarter. It ended the quarter with $17.2 million available in cash and cash equivalents, with total assets amounting to $358 million.
One of the best-undervalued dividend kings, Northwest Natural Holding Company (NYSE:NWN) has been raising its payouts consistently for the past 66 years. It pays a quarterly dividend of $0.4825 per share and has a dividend yield of 4.00%, as of September 6.
You can also take a look at 10 Best Stocks That Pay Monthly Dividends and 10 Best Blue Chip Dividend Stocks to Invest In
