In this article, we discuss 10 dividend stocks that are on sale 30% or more. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Dividend Stocks That are On Sale 30% or More.
The investment environment has been evolving steadily, driven by changes in investors' feelings towards the market. This volatility has led to fluctuations in the performance of dividend stocks and other types of assets. In 2023, we witnessed a similar trend where investor focus shifted towards technology stocks, overshadowing the appeal of dividend stocks amidst the unpredictability of the year. Dividend stocks, including those with a track record of steady growth in dividends, showed a notable underperformance compared to the overall market last year. Despite this, some investors saw this as an opportunity to acquire dividend stocks at discounted prices, ensuring a continued stream of income from their investments. As of September 2023, findings from a survey by Visual Capitalist reveal that dividend investing emerged as the top choice among retail investors, with 50% of respondents expressing interest in this strategy.
Analysts predict that the trend of investing in dividend stocks will persist throughout 2024. According to strategies outlined by BofA, 2024 has the potential to be a standout year for dividends. BofA cited optimism regarding dividends this year, attributing it to the tendency for high dividend yield stocks to excel during recoveries. They point to a global macro indicator they monitor, suggesting that markets are poised for a "risk-on" recovery rather than the feared downturn. Savita Subramanian, head of U.S. equity and quantitative strategy at BofA Securities, spoke with Barron’s about dividend stocks in detail:
“Typically what happens is that all the stocks that were considered risky in a recessionary or pre-recessionary environment now have a lifeline from less credit and earnings risk and tend to outperform and bounce back from the dire expectation levels.”
Another factor highlighted by the strategist is the significant amount of cash reserves, amounting to trillions of dollars, currently held on the sidelines. It's anticipated that if short-term interest rates decline, as projected in the upcoming months, investors may shift their funds away from money-market funds and cash equivalents towards investments offering equity income.
Apart from their optimistic forecast for 2024, dividend stocks have played a substantial role in bolstering the market's overall performance. As per a study conducted by S&P Dow Jones Indices, spanning from 1926 to July 2023, dividend earnings accounted for 32% of the S&P 500's monthly total return, with capital appreciation making up the remainder. The report also highlighted the significance of dividends in terms of the compounding effect. It emphasized that excluding dividends, the initial return of the S&P 500 on January 1, 1930, would have increased to $214 by July 2023. However, with dividends reinvested, the return of the S&P 500 during the same timeframe would have grown substantially higher to $7,219.
Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some of the most prominent dividend stocks, consistently delivering favorable returns to investors over time. However, in this article, we will focus on dividend stocks that are on sale 30% or more.
To compile this list, we began by examining stocks that have experienced a decline from their peak prices within the past three years. From this pool, we selected 10 dividend-paying stocks that have witnessed a drop of 30% or greater in their share prices over these three years. The rankings within the list are based on the extent of the decrease in share prices from their three-year highs to their current levels, with the list arranged in ascending order of these declines as of February 5th. We also mentioned hedge fund sentiment data for these stocks where available. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
3-year high-to-low share price decrease as of February 5: 36.9%
TELUS Corporation (NYSE:TU) is a Canadian telecommunications company that provides a wide range of related products and services. The company operates both in the consumer market and in the business-to-business sector, offering communication solutions tailored to the needs of individuals, businesses, and organizations. The stock reached its highest point on April 8, 2022, when it was trading at $27.4 per share. However, since that time, it has experienced a significant decline, dropping by 36.9%, which makes it one of the dividend stocks that are on sale.
TELUS Corporation (NYSE:TU) offers a quarterly dividend of C$0.3671 per share, having raised it by 3.4% in November 2023. The company has been growing its dividends since 2004. As of February 6, the stock has a dividend yield of 6.41%. Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some other popular dividend stocks that are grabbing investors' attention.
At the end of Q3 2023, 14 hedge funds in Insider Monkey's database reported having stakes in TELUS Corporation (NYSE:TU), up from 13 in the previous quarter. These stakes have a collective value of over $54.4 million. With over 1.2 million shares, Marshall Wace LLP was the company's leading stakeholder in Q3.
3-year high-to-low share price decrease as of February 5: 37.2%
American Tower Corporation (NYSE:AMT) is an American real estate investment trust company that specializes in owning, operating, and leasing wireless and broadcast communications infrastructure. The company has raised its dividends for 13 consecutive years and offers a quarterly dividend of $1.70 per share. As of February 6, the stock has a dividend yield of 3.59%.
American Tower Corporation (NYSE:AMT), one of the dividend stocks that are on sale, saw its stock reach its peak of $302.01 per share on September 3, 2021, marking its highest point in the preceding three years. However, since then, the share price has experienced a decline of 37.2%.
As of the third quarter of 2023, 60 hedge funds tracked by InsBristol-Myers Squibb Company (NYSE:BMY)ider Monkey owned stakes in American Tower Corporation (NYSE:AMT), which remained unchanged from the previous quarter. The consolidated value of these stakes is over $3 billion.
Baron Funds mentioned American Tower Corporation (NYSE:AMT) in its Q4 2024 investor letter. Here is what the firm has to say:
“Early in 2023, we sold the majority of our position in American Tower Corporation (NYSE:AMT), a global operator of over 200,000 wireless towers, and even further reduced our modest position in the third quarter of 2023. We had concluded in late 2022 and early 2023 that growth expectations were too high given forthcoming headwinds from significantly higher financing costs (20%-plus exposure to floating rate debt), upcoming debt maturities, continued payment shortfalls from a key tenant in India, foreign exchange headwinds, and a reduction in mobile carrier capital expenditures.
3-year high-to-low share price decrease as of February 5: 40.8%
Bristol-Myers Squibb Company (NYSE:BMY) is a global biopharmaceutical company that focuses on discovering, developing, and delivering innovative medicines to patients with serious diseases. The company's mission is to transform patients' lives through science. The stock has seen a decrease of 40.8% since it reached its peak on December 2, 2022, trading at $81.1 per share. It is among the dividend stocks that are on sale.
Bristol-Myers Squibb Company (NYSE:BMY) declared a 5.3% hike in its quarterly dividend to $0.60 per share. Through this increase, the company stretched its dividend growth to 18 years. The stock's dividend yield on February 6 came in at 5.03%.
According to Insider Monkey's database of Q3 2023, 65 hedge funds owned stakes in Bristol-Myers Squibb Company (NYSE:BMY), down slightly from 66 in the preceding quarter. These stakes are collectively worth over $1.8 billion in total. Among these hedge funds, Two Sigma Advisors was the company's leading stakeholder in Q3.
3-year high-to-low share price decrease as of February 5: 44.2%
Hormel Foods Corporation (NYSE:HRL) is a multinational food company that specializes in producing and marketing a wide range of consumer-branded food and meat products. The company serves both retail and food service customers globally, offering products tailored to meet the needs and preferences of consumers in different markets. The company offers a quarterly dividend of $0.2825 per share, hiking it by 2.7% in November 2023. This marked the company's 58th consecutive year of dividend growth. The stock has a dividend yield of 3.77%, as of February 6.
Hormel Foods Corporation (NYSE:HRL) has experienced a decrease of 44.2% since it reached its peak at $53.5 per share on April 22, 2022, which makes it one of the dividend stocks that are on sale.
As of the end of September 2023, 18 hedge funds tracked by Insider Monkey owned stakes in Hormel Foods Corporation (NYSE:HRL), compared with 24 in the previous quarter. These stakes are collectively valued at $245.3 million. With nearly 2.2 million shares, Bill & Melinda Gates Foundation Trust was the company's leading stakeholder in Q3.
3-year high-to-low share price decrease as of February 5: 47.1%
Devon Energy Corporation (NYSE:DVN) ranks sixth on our list of dividend stocks that are on sale. The independent energy company is primarily engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids. The company currently pays a $0.77 per share fixed-plus-variable quarterly dividend and has a dividend yield of 6.99%, as of February 6.
On June 3, 2022, Devon Energy Corporation (NYSE:DVN) reached its peak trading price at $77.02 per share, marking its highest value in the preceding three years. However, since that date, the stock has experienced a decrease of 47.1%.
Devon Energy Corporation (NYSE:DVN) was a part of 52 hedge fund portfolios at the end of Q3 2023, up from 45 in the previous quarter, as per Insider Monkey's database. The stakes owned by these hedge funds have a collective value of over $863.8 million.
