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 Vishay Intertechnology, Inc. (NYSE:VSH) 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 close-up of discrete semiconductors in a manufacturing lab.
Vishay Intertechnology, Inc. (NYSE:VSH)
Number of Hedge Fund Holders: 19
1-Year Share Price Decline as of September 4: 28.19%
52 Week Range: $18.72 – $25.50
Vishay Intertechnology, Inc. (NYSE:VSH) is an American manufacturing company that specializes in discrete semiconductors and passive electronic components. On September 3, the stock reached its 52-week low of $18.93 per share as it dealt with challenges in the global semiconductor industry, such as supply chain disruptions and fluctuating demand. In the past 12 months, the stock is down by over 28%.
In the second quarter of 2024, Vishay Intertechnology, Inc. (NYSE:VSH) reported revenue of $741.2 million, which showed a 17% decline from the prior year period. As the first half of the year has already passed, it has become clear that the industry’s recovery is proceeding more slowly than initially anticipated. Consequently, Vishay Intertechnology is extending the timeline for the Itzehoe, Germany expansion project beyond 2024, while maintaining its planned capital investment of $2.6 billion from 2023 to 2028. For 2024, the company now plans to allocate between $360 million and $390 million towards capital expenditures.
Despite the challenging outlook, Vishay Intertechnology, Inc. (NYSE:VSH) intends to expand its capacity and improve its margins in the upcoming quarters. This was also highlighted by First Pacific Advisors in its Q2 2024 investor letter. Here is what the firm said about VSH:
“Vishay Intertechnology, Inc. (NYSE:VSH) is a manufacturer of discrete semiconductors and passive components, mostly for the general industrial and auto markets. Although the industry is cyclical, competitive dynamics are stable and VSH benefits from electric vehicles and industrial electrification. Vishay’s products are similar to ball bearings but for a technological rather than a mechanical economy: high value-to-cost, and they go into nearly everything. Shares have followed operating performance that has drifted down from post-Covid highs following the industrial cycle and a slowdown in electric vehicle (EV) production. Management has an ambitious plan to grow capacity, sales, and margins. We are cautiously optimistic and have been incrementally adding to our position.”
Vishay Intertechnology, Inc. (NYSE:VSH) could be grabbing investors’ attention due to this positive outlook. The company’s ongoing dedication to its shareholders is also a key factor contributing to its increasing popularity. In the first six months of the year, it returned $52.6 million to shareholders through dividends and share repurchases. The company pays a quarterly dividend of $0.10 per share and has a dividend yield of 2.09%, as of September 4.
At the end of June 2024, 19 hedge funds in Insider Monkey’s database owned stakes in Vishay Intertechnology, Inc. (NYSE:VSH), down slightly from 21 a quarter earlier. These stakes have a total value of more than $293 million. With over 2.6 million shares, Fisher Asset Management was the company’s leading stakeholder in Q2.
Overall VSH ranks 6th on our list of the 52-week low dividend stocks to consider. While we acknowledge the potential for VSH 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 VSH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
