Many investors, wary of the ever-changing nature of the stock market, look to dividend stocks as a way to ensure consistent returns. We know this well, but I’ve combined consistent dividends with growth potential in today’s list, the latter of which comes from being undervalued and/or down year-to-date. This allows for stable returns via both price appreciation and lucrative dividend payments. And, it never hurts to reiterate that quality must be the first concern when selecting the top dividend stocks to purchase.
When analyzing dividend stocks — and it never hurts to emphasize this, either — it’s important to consider the represented company’s history of dividend growth, its payout ratio, and level of safety. The dividends paid out by high-quality dividend growth businesses tend to grow steadily over time. Investors also have a better chance of seeing their initial investment grow over the long run as the stock price rises in tandem with profits. Such is the ideal scenario for long-term investors seeking strong equities.
Now, I’ll break down some key metrics from each of these dividend-paying tickers that analysts say would make for smart long-term portfolio picks. Let’s have a look:
Cisco Systems Inc (CSCO)
Cisco Systems, Inc. (CSCO) designs, manufactures, and sells networking equipment and services for the communications and IT industries. CSCO operates across the Americas, offering wireless routers, network management, VPN security, and more. Sandra Lerner and Leonard Bosack founded CSCO on December 10th, 1984, in San Jose, CA. CSCO is down slightly year-to-date by 2.41%. With a $190 billion market cap, CSCO has a solid 0.99 beta, a P/E ratio of 17x, a forward P/E of 11.74x, and a nice D/E (debt to equity) percentage of 21.43%. CSCO shows TTM revenue of $53.16 billion at $2.73 per share, from which it profited $11.8 billion on a 22.91% net margin. CSCO has a dividend yield of 3.36%, with a quarterly payout of 39 cents ($1.56/yr) per share and a 55.68% payout ratio. With a free cash flow of $13.59 billion and a 10-day average volume of 17.82 million shares, CSCO has a median price target of $56.72, with a high of $69 and a low of $51. This represents a potential 48% price increase from where CSCO currently sits, and collectively, analysts give the stock 19 buy ratings and 8 hold ratings.
CSCO (Year-to-Date)
Devon Energy Corp (DVN)
Devon Energy Corp. (DVN) develops and produces oil and gas. DVN operates Heavy Oil, Eagle Ford, Delaware Basin, and Rockies Oil. John W. Nichols and J. Larry founded DVN in 1971, headquartered in Oklahoma City, OK. DVN is down YTD by 20.08%. DVN has a market cap of $31.65 billion, an enterprise value of $39 billion, a P/E of 5.36x, a PEG (price-earnings-growth) ratio of 0.40x, and a P/S (price to sales) of 1.78x. With a TTM revenue of $19 billion at $9.18 per share, DVN shows a net income of $6 billion via its net margin of 31.49% and boasts an ROE (return on equity) of 58.33%. DVN has an operating free cash flow of $8.37 billion and a 10-day average trading volume of 8.41 million shares. DVN has a whopping 10.29% dividend yield, with a quarterly payout of $1.26 ($5.04/yr) per share and a 56.69% payout ratio. DVN has a median price target of $65.45, with a high of $87 and a low of $49, representing a potential price upswing of over 77%. DVN has 17 buy ratings and 14 hold ratings.
DVN (Year-to-Date)
Emerson Electric Co (EMR)
Emerson Electric Co. (EMR) is a technology and engineering firm that serves industrial, commercial, and consumer customers globally. EMR supplies oil and gas and improves industrial production planning, management, and maintenance with decades of optimization. EMR also deals in air conditioning and refrigeration. EMR was founded in 1890 in Saint Louis, MO, where its headquarters remain. Currently down YTD by 12.92%, EMR has a market cap of $47.8 billion and an enterprise value of $56 billion, with a P/E ratio of 18.67x and year-over-year growth in key areas such as revenue (+14.13%), EPS (+22.12%), net income (+17.51%), profit margin (+2.98%), and operating income (+28.06%). EMR reports a TTM revenue of $18.5 billion at $4.48 per share, from which it made a $2.91 billion profit with a 23.55% net margin. EMR most recently beat analysts’ EPS and revenue forecasts by margins of 11.51% and 2.96%, respectively, and shows a free cash flow of just over $3 billion. EMR has an annual dividend yield of 2.49% and a quarterly payout of 52 cents ($2.08/yr) per share. With a 10-day average trading volume of 3.57 million shares, EMR has been assigned a median price target of $104, with a high of $122 and a low of $83. This suggests a nearly 46% price jump from EMR’s current position, and analysts weigh in on the stock with 17 buy ratings and 8 hold ratings. I see a great “buy the dip” opportunity here.
EMR (Year-to-Date)
– Adam @ Wall St. Watchdogs
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