In this article, we discuss 5 undervalued dividend kings to buy in 2022. If you want our detailed analysis of these stocks, go directly to 10 Undervalued Dividend Kings To Buy In 2022.
5. National Fuel Gas Company (NYSE:NFG)
Dividend Yield as of February 24: 3.06%
Number of Hedge Fund Holders: 21
Number of Years of Consecutive Dividend Increases: 51
P/E Ratio: 13.07
National Fuel Gas Company (NYSE:NFG) operates as a diversified energy company, producing natural gas and oil in California and the Appalachian region of the United States. National Fuel Gas Company (NYSE:NFG)’s history of consistently increasing dividends dates back to 51 years.
On December 3, National Fuel Gas Company (NYSE:NFG) declared a $0.45 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on January 14. As of February 24, National Fuel Gas Company (NYSE:NFG) offers a yield of 3.06%.
National Fuel Gas Company (NYSE:NFG)’s earnings and revenue for the fourth quarter of 2021 came in above market consensus. The company posted an EPS of $1.48, and revenue for the period clocked in at $546.56 million, up approximately 26% year-over-year.
Mario Gabelli’s GAMCO Investors is the biggest shareholder of National Fuel Gas Company (NYSE:NFG) as of Q4 2021, with an $80 million stake. Overall, 21 hedge funds were bullish on the stock in the fourth quarter, up from 19 funds in the quarter earlier.
Here is what Heartland Value Fund has to say about National Fuel Gas Company (NYSE:NFG) in its Q1 2021 investor letter:
“The ho-hum Utilities sector isn’t typically a place to hunt for strong growth prospects. However, for investors willing to do their homework, opportunities do exist. Portfolio holding National Fuel Gas Company (NFG) is a prime example.
NFG is a dividend aristocrat—50 consecutive years of dividend increases. Although the business is lumped in with run-of-the-mill power companies, it is much more diverse. In addition to its utility operations, a pipeline and storage division produces almost a quarter of its profits, and the company generates nearly 40% of its bottom line from natural gas exploration and production.
Shares of NFG are trading at a mid-teens discount to their historic average based on price/book. Given the state of the energy industry over the past few years, we believe the company’s gas unit could be an overlooked source of growth. Additionally, the utility recently received regulatory approval on a natural gas pipeline expansion in Pennsylvania, which is expected to produce a windfall in free cash flow.”
4. Cincinnati Financial Corporation (NASDAQ:CINF)
Dividend Yield as of February 24: 2.31%
Number of Hedge Fund Holders: 26
Number of Years of Consecutive Dividend Increases: 61
P/E Ratio: 6.59
Headquartered in Fairfield, Ohio, Cincinnati Financial Corporation (NASDAQ:CINF) offers property casualty insurance products in the United States. The company has paid consecutively increasing dividends for 61 years, and delivers a yield of 2.31% as of February 24. It is one of the most undervalued dividend kings to buy in 2022, with a price to earnings ratio of 6.59.
Cincinnati Financial Corporation (NASDAQ:CINF) announced its fourth quarter earnings on February 15, posting an EPS of $1.97, above consensus by $0.61. Revenue for the period jumped 23.35% year-over-year to $3.32 billion, outperforming estimates by $1.55 billion. The fourth quarter results were helped by a boost in earned premiums and investment income.
On January 28, Cincinnati Financial Corporation (NASDAQ:CINF) reported a $0.69 per share quarterly dividend, a 9.5% increase from its prior dividend of $0.63. The dividend will be paid on April 15, to shareholders of record on March 18.
Select Equity Group held the biggest position in Cincinnati Financial Corporation (NASDAQ:CINF) in Q4 2021, with more than 3 million shares worth $356.8 million. Overall, 26 hedge funds held long positions in Cincinnati Financial Corporation (NASDAQ:CINF) according to the Q4 database of Insider Monkey.
3. Stanley Black & Decker, Inc. (NYSE:SWK)
Dividend Yield as of February 24: 2.02%
Number of Hedge Fund Holders: 42
Number of Years of Consecutive Dividend Increases: 54
P/E Ratio: 17.50
Stanley Black & Decker, Inc. (NYSE:SWK) is a Connecticut-based manufacturer of industrial tools, hardware, security, and medical equipment. Stanley Black & Decker, Inc. (NYSE:SWK) has raised its dividends consistently for 54 years, offering a yield of 2.02%.
On February 16, Stanley Black & Decker, Inc. (NYSE:SWK) declared a $0.79 per share quarterly dividend, in line with previous. The dividend is payable on March 22, to shareholders of record on March 8. Stanley Black & Decker, Inc. (NYSE:SWK) also beat market consensus on earnings, with an EPS of $2.14.
On February 23, Stanley Black & Decker, Inc. (NYSE:SWK) priced its offering of $500 million aggregate principal amount of 2.30% senior notes due 2025 at 99.865% of par and $500 million aggregate principal amount of 3.0% Senior Notes due 2032.
Citi analyst Eric Lau resumed coverage of Stanley Black & Decker, Inc. (NYSE:SWK) on February 3 with a Buy rating and a $215 price target after the Q4 results. Despite global supply chain constraints, the company’s end-demand remained solid, the analyst told investors in a research note.
Pzena Investment Management held the largest stake in Stanley Black & Decker, Inc. (NYSE:SWK) in Q4 2021, with over 1 million shares worth $190.7 million. Overall, 42 hedge funds were long Stanley Black & Decker, Inc. (NYSE:SWK) in the fourth quarter.
Here is what Saturna Capital Sextant Funds has to say about Stanley Black & Decker, Inc. (NYSE:SWK) in its Q3 2021 investor letter:
“Stanley Black & Decker, Inc. (NYSE:SWK) performed well through the first part of the year but struggled over the summer. China accounts for much of its production, and their zero-tolerance approach to pandemic safety measures has led to disruption, compounded by shipping difficulties and rising materials expenses. We still believe one outcome of the pandemic will be a buoyant home improvement market, given that one never knows when the next pandemic lockdown may occur.”
2. Emerson Electric Co. (NYSE:EMR)
Dividend Yield as of February 24: 2.22%
Number of Hedge Fund Holders: 43
Number of Years of Consecutive Dividend Increases: 65
P/E Ratio: 20.21
Emerson Electric Co. (NYSE:EMR) is a Missouri-based company that designs technology and engineering products for the global industrial, commercial, and consumer markets. The company serves multiple market segments including oil and gas, refining, chemicals, power generation, life sciences, automotive, and metals and mining, among others.
On February 2, Emerson Electric Co. (NYSE:EMR) declared a per share quarterly dividend of $0.515, in line with previous. The dividend is payable on March 10, for shareholders of record on February 11.
Deutsche Bank analyst Nicole DeBlase lowered the price target on Emerson Electric Co. (NYSE:EMR) on February 3 to $660 from $715 and kept a Buy rating on the shares following the company’s Q4 results. The analyst continues to like Emerson Electric Co. (NYSE:EMR)’s later-cycle end market exposures, which she says are poised to see continued recovery throughout the course of the year.
According to the Q4 database of Insider Monkey, 43 hedge funds were bullish on Emerson Electric Co. (NYSE:EMR), up from 41 funds in the prior quarter. Two Sigma Advisors was the biggest shareholder of Emerson Electric Co. (NYSE:EMR), with 2.6 million shares worth over $250 million.
1. Target Corporation (NYSE:TGT)
Dividend Yield as of February 24: 1.88%
Number of Hedge Fund Holders: 49
Number of Years of Consecutive Dividend Increases: 50
P/E Ratio: 14.10
Target Corporation (NYSE:TGT), an American big-box store company, made it to our list of the undervalued dividend kings to buy in 2022 since the company has delivered consecutive dividend increases for 50 years and offers a P/E ratio of 14.10.
On January 13, Target Corporation (NYSE:TGT) declared a $0.90 per share quarterly dividend, in line with previous. The dividend is payable on March 10, for shareholders of record on February 16.
Cowen analyst Oliver Chen lowered the price target on Target Corporation (NYSE:TGT) to $265 from $300 and kept an Outperform rating on the shares. Chen said longer-term, he believes Target Corporation (NYSE:TGT) will be better positioned to work through inflationary challenges over the coming quarters, and benefit from a more resilient consumer, balanced category mix, and broad-based market share growth. The stock trades at a modest valuation.
A total of 49 hedge funds were bullish on Target Corporation (NYSE:TGT) in Q4 2021, with collective stakes amounting to $3.9 billion. Rajiv Jain’s GQG Partners is the biggest shareholder of the company, with 4.90 million shares worth $1.13 billion.
Here is what Nelson Capital Management has to say about Target Corporation (NYSE:TGT) in its Q2 2021 investor letter:
“We added Target (tkr: TGT) to our consumer staples sector. Target Corporation (NYSE:TGT) offers a broad array of products in owned and known brand items at affordable prices. Its omni-channel fulfillment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target is an attractive holding.”
You can also take a look at 10 Best Pharmaceutical Stocks to Buy in 2022 and 10 Best Mid Cap Stocks To Buy In 2022 .
