Dividend shares are income streams. They provide an opportunity to receive cash flow. They are primarily blue-chip stocks. Such assets are usually contrasted with growth stocks and companies that use profit margins to develop.
A security whose market value is less than its fair value is an exposure to dividend shares that are underrated. The share trades on the market are more on news than on fundamentals.
The article contains a list of 7 best bonus stocks to buy right now from the perspective of the BeatMarket experts. It will be useful for those looking for stocks to add to a well-balanced portfolio covering a variety of sectors.
Table of Contents
Best undervalued Dividend Stocks to Buy Now
The best premium stocks that are underrated in the U.S. are listed in the table below.
| Dividend Payout ratio (TTM)(GAAP), % | Consecutive Years of Dividend Increase | Yield (FWD)*, % | |
| Verizon Communications | 115.19 | 20 | 6.70 |
| Exxon Mobil | 47.32 | 42 | 3.29 |
| Medtronic | 93.92 | 48 | 3.17 |
| General Mills | 56.67 | 5 | 3.74 |
| Starbucks | 68.88 | 14 | 2.43 |
| Comcast | 32.80 | 17 | 2.81 |
| WEC Energy Group | 80.32 | 22 | 3.38 |
*Information as of November 12, 2024 by seekingalpha.com
Verizon Communications Inc. (VZ)
According to dividend.com, Verizon Communications has increased shareholder compensation for 20 years. VZ is considered a high-dividend stock. The current dividend yield as of November 12 is 6.7%.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Oct 10, 2024 | 0.68 | Nov 01, 2024 | 6.14% |
| Jul 10, 2024 | 0.67 | Aug 01, 2024 | 6.44% |
| Apr 09, 2024 | 0.67 | May 01, 2024 | 6.37% |
| Jan 09, 2024 | 0.67 | Feb 01, 2024 | 6.63% |
| Oct 06, 2023 | 0.67 | Nov 01, 2023 | 8.36% |
| Jul 07, 2023 | 0.65 | Aug 01, 2023 | 7.03% |
| Apr 06, 2023 | 0.65 | May 01, 2023 | 6.51% |
| Jan 09, 2023 | 0.65 | Feb 01, 2023 | 6.19% |
Information as of November 12, 2024
The dividend payout ratio (TTM) (GAAP) is 99.63%. This is a negative factor. It is caused by a decline in net income starting in q4 2023. Often, a business remains on a disburse growth trajectory for the sake of reputation rather than as a result of growth in profits, net operating income or other indicators.
Verizon Communications Inc. regularly pays quarterly rewards. The last ex-dividend date was October 10. The amount was $0.68 per share. This works out to an annual dividend of $2.71. The next ex-dividend date is January 10, 2025.
VZ’s current P/E ratio is 17.45. This is below the average P/E ratio for the S&P 500. It is 30.69 (according to multpl.com).
Exxon Mobil Corp (XOM)
This is one of the best undervalued dividend stocks to buy. Exxon Mobil Corp (XOM) has been called a dividend aristocrat. This oil and gas company has raised its reward every year for 41 years. However, its current yield is lower than the energy sector as a whole. It’s at 3.29%.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Nov 14, 2024 | 0.99 | Dec 10, 2024 | 3.29% |
| Aug 15, 2024 | 0.95 | Sep 10, 2024 | 3.19% |
| May 14, 2024 | 0.95 | Jun 10, 2024 | 3.22% |
| Feb 13, 2024 | 0.95 | Mar 11, 2024 | 3.68% |
| Nov 14, 2023 | 0.95 | Dec 11, 2023 | 3.62% |
| Aug 15, 2023 | 0.91 | Sep 11, 2023 | 3.25% |
| May 15, 2023 | 0.91 | Jun 09, 2023 | 3.44% |
| Feb 13, 2023 | 0.91 | Mar 10, 2023 | 3.05% |
Information as of November 12, 2024 by investing.com
Another strength of Exxon Mobil Corp is its relatively low dividend payout ratio. It is 47.32%. This figure is within the range considered optimal for dividend-paying stocks (40%-70%). This means that there is potential for the earnings growth.
The next dividend payment is scheduled for December 10. Shareholders will receive $0.99 per share. The next ex-dividend date is November 14. The last reward paid to date was declared in August 2024.
PE ratio – 15.04. It is 2 times lower than the average of the companies in the S&P 500 index. Therefore, they’re underrated.
Medtronic PLC (MDT)
According to dividend.com, Medtronic has raised its reward for 48 consecutive years. This company may soon claim the title of dividend king. But it’s unattractive from an expend ratio standpoint. It has a dividend payout ratio of 93.92%.
MDT is considered to be an undervalued stock. Its current dividend yield is higher than the sector (3.17% vs. 0.73%). The annual payment to shareholders is $2.80.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Sep 27, 2024 | 0.70 | Oct 11, 2024 | 3.13% |
| Jun 28, 2024 | 0.70 | Jul 12, 2024 | 3.53% |
| Mar 21, 2024 | 0.69 | Apr 12, 2024 | 3.28% |
| Dec 19, 2023 | 0.69 | Jan 12, 2024 | 3.32% |
| Sep 21, 2023 | 0.69 | Oct 13, 2023 | 3.39% |
| Jun 22, 2023 | 0.69 | Jul 14, 2023 | 3.13% |
| Mar 23, 2023 | 0.68 | Apr 14, 2023 | 3.40% |
Information as of November 12, 2024 by investing.com
The next dividend payment is scheduled for December 18. The amount will be declared on December 05.
The discounted cash flow (DCF) analyses are another opinion expressed that Medtronic PLC is ignored. According to it, the stock should be valued at $91.69. The price on November 12, 2024 is $88.27.
General Mills Inc (GIS)
General Mills has recently become an attractive dividend story. This issuer has increased its disburse for just 5 years in a row. The payout ratio is 56.67%.
The company has an above-average dividend yield. As of November 12, 2024, this indicator is 3.74%. The sector average is 3.35%. The absolute value is $0.6 per stock, paid once per quarter. To get paid, you must own the stock by January 10, 2025.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Oct 10, 2024 | 0.60 | Nov 01, 2024 | 3.33% |
| Jul 10, 2024 | 0.60 | Aug 01, 2024 | 3.83% |
| Apr 09, 2024 | 0.59 | May 01, 2024 | 3.37% |
| Jan 09, 2024 | 0.59 | Feb 01, 2024 | 3.65% |
| Oct 06, 2023 | 0.59 | Nov 01, 2023 | 3.78% |
| Jul 07, 2023 | 0.59 | Aug 01, 2023 | 3.09% |
| Apr 06, 2023 | 0.54 | May 01, 2023 | 2.48% |
| Jan 09, 2023 | 0.54 | Feb 01, 2023 | 2.51% |
Information as of November 12, 2024 by investing.com
The P/E ratio for GIS is 15.22. This is significantly lower than the S&P 500 and the Consumer Staples sector. The company has been in a downward trend for the last 2 months. The reason is low financial performance. A DCF analysis of GIS shows that the stock is underrated by 31.8%.
Starbucks Corporation (SBUX)
Unlike the stocks discussed above, this stock is traded on the NASDAQ. According to investing.com, Starbucks has increased its reward for 14 consecutive years. As of 11/12/2024, the annualized dividend yield is 2.43%. Over the last 12 months, the company has paid out $2.28.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Nov 15, 2024 | 0.61 | Nov 29, 2024 | 2.43% |
| Aug 16, 2024 | 0.57 | Aug 30, 2024 | 2.40% |
| May 16, 2024 | 0.57 | May 31, 2024 | 3.01% |
| Feb 08, 2024 | 0.57 | Feb 23, 2024 | 2.39% |
| Nov 09, 2023 | 0.57 | Nov 24, 2023 | 2.19% |
| Aug 10, 2023 | 0.53 | Aug 25, 2023 | 2.12% |
| May 11, 2023 | 0.53 | May 26, 2023 | 1.98% |
| Feb 09, 2023 | 0.53 | Feb 24, 2023 | 1.99% |
Information as of November 12, 2024 by investing.com
The next payment to shareholders is expected on November 29, 2024. It amounts to $0.61. Dividend payout ratio is 68.88%.
The P/E ratio is 29.78. This is higher than the industry average (27.11).
Comcast Corp (CMCSA)
Comcast has a 17-year history of reward growth. Its current yield is 2.81%. The absolute value is $1.24 per year. Once a quarter in 2024, shareholders will receive $0.31.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Jan 08, 2025 | 0.31 | Jan 29, 2025 | 2.82% |
| Oct 02, 2024 | 0.31 | Oct 23, 2024 | 2.97% |
| Jul 03, 2024 | 0.31 | Jul 24, 2024 | 3.25% |
| Apr 02, 2024 | 0.31 | Apr 24, 2024 | 2.93% |
| Jan 02, 2024 | 0.29 | Jan 24, 2024 | 2.65% |
| Oct 03, 2023 | 0.29 | Oct 25, 2023 | 2.61% |
| Jul 03, 2023 | 0.29 | Jul 26, 2023 | 2.79% |
| Apr 04, 2023 | 0.29 | Apr 26, 2023 | 3.05% |
| Jan 03, 2023 | 0.27 | Jan 25, 2023 | 3.09% |
Information as of November 12, 2024 by investing.com
The next Earnings Date is January 23, 2025.
Company measures are as follows:
- The payout ratio is only 32.80%;
- The P/E ratio is 11.83;
- P. Lynch’s formula price is $95.87.
CMCSA is one of the top 3 most undervalued dividend stocks. CMCSA stock has a fair value potential for growth of 116.9%. According to the DCF method, the current price is 40.6% below the estimated valuation.
The reason is falling prices in the q1 of 2024. This happened despite revenue growth. This is due to market share losses in cable and broadband access.
WEC Energy Group Inc (WEC)
Its market value is less than $100. WEC Energy Group has increased its contribution for 22 years. The current yield is 3.38%. This is slightly higher than the average for the industry (3.75%).
The absolute value of the latest distribution is $0.84. Distributions to shareholders are paid quarterly. The last one was paid on 09/01. The next distribution will be paid on 12/01.
| Ex-Dividend Date | Dividend | Payment Date | Yield |
| Nov 14, 2024 | 0.84 | Dec 01, 2024 | 3.38% |
| Aug 14, 2024 | 0.84 | Sep 01, 2024 | 3.73% |
| May 13, 2024 | 0.84 | Jun 01, 2024 | 3.91% |
| Feb 13, 2024 | 0.84 | Mar 01, 2024 | 4.26% |
| Nov 13, 2023 | 0.78 | Dec 01, 2023 | 3.88% |
| Aug 11, 2023 | 0.78 | Sep 01, 2023 | 3.58% |
| May 11, 2023 | 0.78 | Jun 01, 2023 | 3.27% |
| Feb 13, 2023 | 0.78 | Mar 01, 2023 | 3.35% |
Information as of November 12, 2024 by investing.com
WEC has an excessive dividend payout ratio. This ratio is 80.32%.
It was among the most undervalued stocks in the first half of 2024. Since the beginning of July 2024, the stock has gained more than $20. However, the P/E multiple is still below average for the US market. As of November 12, this multiple is 24.16.
Conclusion
Dividend investing is an alternative to real estate investment for rental properties. A good way to increase your free cash flow is to buy the securities mentioned in this article. These stocks are issued by companies with large market caps and low volatility.
Most of them do not pay high dividends. Buying such companies is a long-term investment. This allows the shareholder to benefit from a steadily increasing return.
With this type of income investing comes the risk that the value of the reward stock will decline and the company will stop paying. Lists of the best reward stocks are not intended to provide a high current yield. They are designed to help you build a portfolio that will provide a stable income for at least the next five years.
When income investors are looking for undervalued stocks, they can use BeatMarket’s screener and scoring system. Our services provide a full list of securities with growth opportunities. They will also help you to start following stocks with attractive dividends.
It’s easy to track your dividend income with a portfolio tracker. Start browsing stocks with BeatMarket’s service and ensure future growth of your capital.
H2 FAQ
How do the recommended dividend stocks’ yields compare to historical averages?
When it comes to the historical dividend yield of the S&P 500, the average is 2.895%. All of the stocks on our Dividend Shares list are higher today. At the same time, the historical high is 6.659%. Only select companies can maintain this level on a consistent basis.
50 years of increased dividends?
Companies that have raised their dividends for more than 50 years-to-date are called Dividend Kings. This year there will be about 53 companies on this watchlist. The track record is 71 years.
What is a Dividend?
Dividends are a way of distributing a company’s profits to all shareholders. Contributions are usually paid in cash and are paid quarterly. They can be received not only on individual stocks, but also on investments in mutual funds and exchange-traded funds.
What should investors be looking for when it comes to choosing the best dividend stocks?
When choosing a dividend stock to buy, the DIV CAGR over 5 or 10 years is important. You should also consider how many years in a row the company has increased its reward. The third key indicator is the spend ratio. We should not forget the multiples that are used when trading stocks. For example, leverage, profitability.
