We recently compiled a list of the 12 52-Week Low Dividend Stocks To Consider. In this article, we are going to take a look at where Halliburton Company (NYSE:HAL) stands against the other 52-week low dividend stocks.
Dividend stocks have noticeably lagged over the past year or so, with tech stocks dominating the spotlight. However, with major tech companies beginning to implement dividend policies, there is renewed optimism for investors, offering a mix of growth and dividend potential. Currently, all eyes are on the Fed’s upcoming decision on interest rate cuts, which could significantly benefit dividend-paying stocks.
While keeping an eye on the future performance of dividend stocks is crucial, it’s also wise to look back and see how these equities have weathered different market storms. A report from S&P Dow Jones Indices revealed that dividends have been crucial in generating overall equity returns. Since 1926, dividends have accounted for about 32% of the total return for the broader market, with capital appreciation contributing 68%. Consequently, both reliable dividend income and the potential for capital appreciation are key factors in setting expectations for total returns.
Also read: 14 Best 52-Week High Stocks to Buy According to Short Sellers
Inflation is rarely a friend to investments, as the past year has demonstrated. However, dividend stocks have historically held their ground during periods of high inflation. In the 1940s, 1960s, and 1970s—decades characterized by high inflation and total returns below 10%—dividends made a significant contribution to overall returns, as reported by Hartford Funds.
Among dividend strategies, the Dividend Aristocrats Index is the most well-known, tracking companies with at least 25 consecutive years of dividend growth. These stocks are generally less volatile than other asset classes, according to S&P Dow Jones Indices. Over the long term, the Dividend Aristocrats have outperformed the broader market with lower volatility, resulting in higher risk-adjusted returns. The index’s ability to protect against downside risk is evident in its capture ratios: it has outperformed the market in 69.34% of down months and 43.61% of up months. Moreover, the Dividend Aristocrats experienced a smaller drawdown compared to the benchmark index.
Analysts believe that the movement of returns on investments is shaped by market forces. Daniel Peris, a portfolio manager with Federated Hermes and author of a recent book on the future of dividends, suggested that stock market price appreciation alone might not meet the needs of income-seeking investors in the coming years. This, he believed, would likely drive companies to increase their payouts to remain competitive with cash and bonds. He indicated that more companies might start offering dividends and make them a more significant part of their value proposition. However, investors need to be cautious when investing in dividend equities. According to Michael Clarfeld, who manages the Dividend Strategy portfolios at ClearBridge Investments, dividend investing is about making informed decisions by examining a company’s cash flows and how they distribute payouts to investors.
The recent dip in the performance of dividend stocks has made them more attractive to investors. The Dividend Aristocrats Index has seen an increase of nearly 9% since the beginning of 2024, while the broader market has returned 16.5%. These stocks could present a good entry point for investors due to the steady income they offer, providing stability and predictability for a portfolio during volatile times. Given this, we will take a look at some of the best 52-week low stocks that pay dividends.
Our Methodology:
For this article, we first listed down all dividend stocks that recently hit their 52-week lows. We then used Insider Monkey’s exclusive database of 912 leading hedge funds to get the hedge fund sentiment for each stock. Finally, we narrowed our list to 12 of these stocks that had the highest number of hedge fund investors, as tracked by Insider Monkey in Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A drilling rig in the desert with an orange sunset in the background.
Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 41
1-Year Share Price Decline as of September 4: 27%
52 Week Range: $29.15 – $43.85
Halliburton Company (NYSE:HAL) is an American multinational company that offers products and services related to the energy industry. The company manages all aspects of the oil industry, from exploration and drilling to enhancing oil well production capacity. Cyberattacks have significantly troubled the energy sector, and Halliburton is no different. In August, the company revealed that it had experienced a cyberattack. Halliburton stated that it is currently assessing the details and extent of the information that was compromised, but it also noted that the incident is unlikely to have a significant impact. The stock has fallen by over 19% since the start of 2024.
Should the issue be resolved, Halliburton Company (NYSE:HAL) still has potential for growth, as indicated by its recent quarterly earnings. In the second quarter of 2024, the company’s returns and cash flow were robust. Internationally, Halliburton is experiencing strong demand for its services, high activity levels, and tight equipment availability across all major basins. In North America, the company’s strategy to optimize value is yielding shareholder benefits, and it is anticipated that strong returns will persist throughout this cycle. It generated $5.8 billion in revenues, up modestly by 0.6% from the same period last year.
Carillon Tower Advisers emphasized the positive aspects of Halliburton Company (NYSE:HAL) in its Q4 2023 investor letter. Here is what the firm said:
“Halliburton Company (NYSE:HAL) provides equipment and services to the global energy industry. The company’s shares underperformed during the quarter, largely due to downward pressure on crude oil and natural gas prices. Despite this recent move, ongoing discipline among North American shale producers could continue supporting relatively healthy activity growth at current commodity price levels, which should provide stability to service providers such as Haliburton. The company is also poised to benefit from the ongoing, multi-year international and offshore upstream investment cycle that is less dependent on short-term swings in commodity prices.”
Halliburton Company (NYSE:HAL) is a strong dividend payer, having raised its payouts for three consecutive years. Moreover, its cash generation suggests that future dividend payments are likely. In the most recent quarter, it generated $1.1 billion in operating cash flow and its free cash flow came in at $800 million. The company offers a quarterly dividend of $0.17 per share for a dividend yield of 2.33%, as of September 4.
The number of hedge funds tracked by Insider Monkey owning stakes in Halliburton Company (NYSE:HAL) grew to 41 in Q2 2024, from 38 in the previous quarter. These stakes have a total value of nearly $508 million.
Overall HAL ranks 2nd on our list of the 52-week low dividend stocks to consider. While we acknowledge the potential for HAL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.