Chevron Corporation (CVX), Lockheed Martin Corporation (LMT), AT&T Inc. (T): The Fed’s Decision Is Your All-Clear Signal to Buy These Stocks

AT&T Inc. (NYSE:T) doesn’t have the same level of dividend growth as either Chevron Corporation (NYSE:CVX) or Lockheed Martin Corporation (NYSE:LMT), as the stock has raised its distribution at a 2% clip over the past five years. However, it offers investors a comfortable 5% yield and a relatively recession-proof business model. People tend to watch TV and use their phones even when the economy isn’t doing well. This is evidenced by the fact that AT&T Inc. (NYSE:T) has low volatility: the beta on the stock is only 0.39.

Undervalued dividend stocks are still attractive

Making things even better, these stocks appear to be favorably valued, even after such a broad market rally over the past few years. Chevron Corporation (NYSE:CVX) and Lockheed Martin Corporation (NYSE:LMT) trade for price-to-earnings ratios of 9 and 11 times, respectively, significantly below the roughly 17 multiple of earnings on the S&P 500. AT&T, meanwhile, generated record operating cash flow last year, and the stock trades for an adjusted P/E ratio of 16 times.

Since these stocks trade for compelling valuations and pay hefty dividend yields in excess of the yield available on the broader market, investors would be wise to consider adding these equities to their portfolios. The investing case for these stocks is further enhanced by the Federal Reserve’s recent decision to keep its foot firmly pressed on the monetary gas pedal.  These stocks offer the potential for a one-two punch of capital gains and high dividend income, an unbeatable combination to build wealth over time and secure your financial future.

The article The Fed’s Decision Is Your All-Clear Signal to Buy These Stocks originally appeared on Fool.com and is written by Robert Ciura.

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