In this article, we discuss 12 oversold dividend stocks to buy now. Skip the detailed analysis of dividend stocks and their past performance and read them directly. 5 oversold dividend stocks to buy right now.
The S&P 500 has been up consistently this year, rising for four straight months. Michael Hartnett, chief global strategist at Bank of America, said it's rare for the S&P 500 to achieve impressive gains in a short period of time, having only happened 10 times since the 1930s. He further said that these gains were realized in the aftermath of recessions like 2009 and 2020, or at the beginning of a bubble similar to the situation experienced in 1999. played a key role in driving the market rally in 2023, but entered oversold territory this year. The stock has fallen 7.63% since the beginning of the year, under pressure from concerns over iPhone sales in China and fines from the European Union, Bloomberg reported.
Investors are trying to navigate this directionless market and maximize profits by making informed decisions. For years, dividend stocks have served as a safety net against market downturns, making them an attractive option in the current environment. When considering investing in dividend stocks, a combination of dividend yield and dividend growth can be a good strategy. In our article titled “25 Things Every Dividend Investor Should Know,” we referenced data from the S&P Dow Jones Indices, which analyzed the performance of the S&P 500 High Yield Dividend Aristocrats. The index tracks the performance of high-dividend companies in the S&P 500 Composite 1500 that have increased their dividends for at least 20 consecutive years. The report revealed that from December 31, 1999 to March 31, 2022, the index outperformed the benchmark index by 140 basis points per month. During this period, the index outperformed his S&P 500 High Dividend Index by 49 basis points per month.
Our research also shows that dividend stocks outperform other asset classes during periods of inflation. We looked at the performance of dividend stocks during the decades of peak U.S. inflation in the 1940s, 1960s, and 1970s, citing data from The Hartford Fund. The report highlighted that in recent decades, the average market return was less than 10%, with dividends contributing 67%, 44% and 73% to market returns, respectively. One of the main reasons for the performance of dividend stocks can be attributed to the fact that they have the potential to grow over time. Companies that generate more profits may choose to increase their dividends while being more protective of their shareholder obligations. Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo Inc. (NASDAQ:PEP) are some of the best dividend stocks in this regard, and have been for many years. We continually return capital to our shareholders. .
That said, a dividend stock's past performance does not guarantee immunity from harsh market conditions. Investor confidence can decline during a market clampdown, which can cause widespread selling in a variety of stocks, with some stocks potentially becoming oversold. The relative strength index (RSI), introduced by J. Welles Wilder and his junior in 1978, is a technical analysis tool used to analyze the speed and changes in the price movement of stocks. RSI is calculated based on the average profit or loss over a specific period of time (usually 14 business days). However, this period can be adjusted according to the trader's preferences. In this article, we have compiled a list of stocks that are oversold based on their 14-day RSI levels as of March 30th.
Photo by Viacheslav Bublyk on Unsplash
Our methodology:
For this list, we used Finviz's stock screening feature to look for dividend stocks with a 14-day Relative Strength Index (RSI) below 40 as of March 30th. An RSI below 40 indicates that the stock is oversold. Stocks are ranked in descending order of RSI. We also mentioned hedge fund sentiment data for these stocks using Insider Monkey's database, which includes 933 hedge funds as of Q4 2023. Hedge funds' top 10 consensus stock picks outperformed the S&P 500 index by more than 140 percentage points over the past 10 years (Please see here for the detail).
12. Jack in the Box Co., Ltd. (NYSE:JACK)
14-day RSI as of March 30: 39.5
Jack in the Box Inc. (NYSE:JACK) is a California-based fast food restaurant chain known for its diverse fast food menu. The company started paying dividends in 2014 and has continued to pay regular dividends to shareholders ever since. The company currently offers a quarterly dividend of $0.44 per share, yielding a dividend yield of 2.57% as of March 30th.
For the first quarter of 2024, Jack in the Box, Inc. (NYSE:JACK) reported revenue of $487.5 million, beating analyst expectations by $5.94 million. The company's cash generation remains strong, with the company generating operating cash flow of more than $22.6 million and having available and restricted cash of more than $82.5 million during the quarter.
The number of hedge funds tracked by Insider Monkey that own Jack in the Box, Inc. (NYSE:JACK) stock jumped to 21 in Q4 2023, up from 14 in the previous quarter. . The total value of these bets exceeds his $109 million. Among these hedge funds, Millennium Management was the company's major shareholder in the fourth quarter.
11. Accenture plc (NYSE:ACN)
14-day RSI as of March 30: 39.3
Accenture plc (NYSE:ACN) is a multinational professional services firm providing strategic, digital, technology and operations services. On March 21, the company announced a quarterly dividend of $1.29 per share, the same amount as its previous dividend. The company has been consistently paying dividends to shareholders since his 2005, which makes ACN one of the best dividend stocks on our list. The dividend yield as of March 30th is 1.49%.
At the end of Q4 2023, 58 hedge funds in Insider Monkey's database reported owning shares in Accenture plc (NYSE:ACN), up from 55 at the previous quarter. The total value of these stakes amounts to approximately $2.4 billion.
10. Brown-Forman Corporation (NYSE:BF-B)
14-day RSI as of March 30: 35.3
Brown-Forman Corporation (NYSE:BF-B) is next on our list of best oversold dividend stocks. This American beverage company has been paying regular dividends to shareholders for the past 80 years and has maintained consistent dividend growth for 40 consecutive years. The company currently pays a quarterly dividend of $0.2178 per share, with a dividend yield of 1.69% as of March 30th.
According to Insider Monkey's database, 21 hedge funds held shares in Brown-Forman Corporation (NYSE:BF-B) at the end of the fourth quarter of 2023, down from 30 in the previous quarter. The consolidated value of these shares is over $1 billion. Fundsmith LLP holds over 11.6 million shares of his stock and was the company's major shareholder in the fourth quarter.
9. BCE Inc. (NYSE:BCE)
14-day RSI as of March 30: 31.3
BCE Inc. (NYSE:BCE) is a Canadian telecommunications and media company that provides services related to wireless communications, Internet access, and television. The company's current quarterly dividend is $0.9975 per share as of March 30, representing a dividend yield of 8.67%. With 14 years of consistently increasing dividends, BCE is one of the best dividend stocks on our list.
BCE Inc. (NYSE:BCE)'s cash position remained strong in Q4 2023. The company generated operating cash flow of $2.3 billion, and free cash flow for the same period amounted to $913 million.
According to Insider Monkey's Q4 2023 database, 19 hedge funds hold shares in BCE Inc. (NYSE:BCE), up from 15 in the previous quarter. These stakes total approximately $85 million.
8. Methode Electronics, Inc. (NYSE:MEI)
14-day RSI as of March 30: 28.7
Methode Electronics, Inc. (NYSE:MEI) is an Illinois-based electronics company that manufactures related components and subsystems. The company primarily focuses on innovation and technology to provide high-performance electronic solutions to consumers. Although the company hasn't increased its dividend in quite some time, it has been paying regular dividends to shareholders since 1989, which makes MEI one of the best dividend stocks on our list. The quarterly dividend is $0.14 per share, and the dividend yield as of March 30 is 4.60%.
At the end of December 2023, there were 14 hedge funds in Insider Monkey's database, compared to 16 hedge funds in the previous quarter. These stakes are worth a total of over $44 million. Among these hedge funds, Royce & Associates was the company's major shareholder in the fourth quarter.
7. Miller Nord (NASDAQ:MLKN)
14-day RSI as of March 30: 28.3
MillerKnoll, Inc. (NASDAQ:MLKN) is an American company specializing in the manufacture of office furniture, equipment, and home furnishings. The company offers a quarterly dividend of $0.1875 per share, and the dividend yield is 3.03% as of March 30th. The company has continued to pay regular dividends to shareholders for 52 years, making MLKN one of our best dividend stocks. list.
According to Insider Monkey's Q4 2023 database, there are 19 hedge funds that own shares in Miller Nord, Inc. (NASDAQ:MLKN), up from 18 in the previous quarter. In total, these shares are valued at more than $71.2 million.
6. Cross Timbers Royalty Trust (NYSE:CRT)
14-day RSI as of March 30: 28.1
Cross Timbers Royalty Trust (NYSE:CRT) ranks #6 on our list of oversold blue-chip dividend stocks. Royalty Trust currently offers a monthly dividend of $0.0193 per share, yielding a dividend yield of 12.02% as of March 30th.
At the end of Q4 2023, Navellier & Associates was the sole interested party in Cross Timbers Royalty Trust (NYSE:CRT), owning $362,209 worth of stock. .
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Disclosure. none. 12 Oversold dividend stocks to buy now Originally published on Insider Monkey.
