In this article, we will discuss 5 best undervalued dividend stocks to buy now. If you want to read our detailed analysis of value stocks and their performance in the past, go directly to read 10 Best Undervalued Dividend Stocks to Buy Now.
5. Skyworks Solutions, Inc. (NASDAQ:SWKS)
P/E Ratio: 10.78
Skyworks Solutions, Inc. (NASDAQ:SWKS) is an American semiconductor manufacturing company that also specializes in mobile communications systems. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past eight years. Currently, it pays a quarterly dividend of $0.62 per share and has a dividend yield of 2.92%, as recorded on October 24.
In its fiscal Q3 2022 report, Skyworks Solutions, Inc. (NASDAQ:SWKS) posted a strong cash position. The company generated a free cash flow of $86.3 million and its operating cash flow came in at $213.8 million. It paid nearly $90 million to shareholders in dividends during the quarter, compared with $82 million paid during the same period last year.
Cowen mentioned Skyworks Solutions, Inc. (NASDAQ:SWKS) in its October investors’ note and mentioned that the company’s guidance is achievable given the current market environment. The firm maintained its Outperform rating on the stock with a $125 price target.
As of the close of Q2 2022, 40 hedge funds tracked by Insider Monkey owned stakes in Skyworks Solutions, Inc. (NASDAQ:SWKS), up from 39 in the previous quarter. These stakes have a consolidated value of over $1.04 billion.
Heartland Advisors mentioned Skyworks Solutions, Inc. (NASDAQ:SWKS) in its Q3 2022 investor letter. Here is what the firm has to say:
“Before the risk-on rebound early in the quarter, we were searching for opportunities to shift from our defensive stance, looking for beaten-down, high-quality “early cycle” leaders. Existing holding, Skyworks Solutions, Inc. (NASDAQ:SWKS), represents one such opportunity that was added to one weakness.
Skyworks is one of two leading providers of radio frequency system components to smartphone makers and electronics manufacturers. With every step-up in product complexity, over the past two decades, the competitive landscape has shrunk while gross margins have increased significantly. 5G represents another such step-up, which is likely to increase how much Skyworks can make per smartphone. (Click here to view the full text)
4. V.F. Corporation (NYSE:VFC)
P/E Ratio: 10.97
V.F. Corporation (NYSE:VFC) is an American multinational apparel and footwear company that manages its 13 brands. In fiscal Q1 2023, the company remained committed to its shareholder return and paid $194 million in dividends. For FY23, it expects to generate over $1.2 billion in cash flow from operations.
V.F. Corporation (NYSE:VFC) holds a 48-year track record of consistent dividend growth, coming through as one of the best dividend stocks to buy now. The company currently pays a quarterly dividend of $0.50 per share and has a dividend yield of 7.18%, as of October 24.
In October, Baird added V.F. Corporation (NYSE:VFC) to its Fresh Pick list and maintained an Outperform rating on the stock with a $45 price target. The firm highlighted the company’s structurally improved business.
As of the end of Q2 2022, 29 hedge funds in Insider Monkey’s database owned stakes in V.F. Corporation (NYSE:VFC), compared with 28 a quarter earlier. These stakes hold a consolidated value of over $316.3 million. With roughly 7 million shares, Diamond Hill Capital owned the largest position in the company in Q2.
Ave Maria mentioned V.F. Corporation (NYSE:VFC) in its Q2 2022 investor letter. Here is what the firm has to say:
“One stock was eliminated from the Fund, V.F. Corporation (NYSE:VFC) (apparel & footwear). Deteriorating fundamentals and sustained weakness in some of the company’s core brands led us to liquidate the position.”
3. Chevron Corporation (NYSE:CVX)
P/E Ratio: 11.53
Chevron Corporation (NYSE:CVX), one of the best dividend stocks to buy now, has been raising its dividends consistently for the past 35 years. The energy company pays a quarterly dividend of $1.42 per share with a dividend yield of 3.28%, as of October 24.
Piper Sandler appreciated the strategic priorities of Chevron Corporation (NYSE:CVX) and gave a bullish outlook on oil companies. In view of this, the firm raised its price target on the stock to $190 in September with an Overweight rating on the shares.
At the end of the June quarter, the number of hedge funds tracked by Insider Monkey owning stakes in Chevron Corporation (NYSE:CVX) grew to 59, from 53 in the previous quarter. The collective value of these stakes is over $26 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q2.
Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm had to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
2. Cenovus Energy Inc. (NYSE:CVE)
P/E Ratio: 12.91
Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company based in Canada. The company currently pays a quarterly dividend of C$0.105 per share and has a dividend yield of 1.67%, as recorded on October 24.
Jefferies initiated its coverage on Cenovus Energy Inc. (NYSE:CVE) with a Buy rating in October and a C$35 price target, holding a positive stance on energy transition names.
In Q2 2022, Cenovus Energy Inc. (NYSE:CVE) generated an operating cash flow of $3 billion, compared with $1.3 billion in the prior-year quarter. Its adjusted fund flows came in at $3.1 billion, up from $2.5 billion during the same period last year. The company’s strong cash generation shows that its dividends are secured in the upcoming quarters as well.
Of the 895 elite funds in Insider Monkey’s database, 42 hedge funds owned stakes in Cenovus Energy Inc. (NYSE:CVE), compared with 44 in the previous quarter. These stakes have a total value of roughly $3 billion.
L1 Capital mentioned Cenovus Energy Inc. (NYSE:CVE) in its Q2 2022 investor letter. Here is what the firm has to say:
“MEG Energy and Cenovus Energy Inc. (NYSE:CVE): We continue to remain positive on the outlook for Energy. While a potential U.S. recession would result in softer oil demand, we believe this would be more than outweighed by China re-opening over the coming year (which would see a major lift in car and air traffic). Oil supply continues to remain constrained with sustained declines in global inventories and OPEC+ remains unable to grow production significantly. With the sell-off in energy stocks, MEG and Cenovus are currently generating more than 20% of their market cap in cash flow with large dividends and share buybacks to come. (Click here to view the full text)
1. Polaris Inc. (NYSE:PII)
P/E Ratio: 13.74
Polaris Inc. (NYSE:PII) is an American automotive manufacturer of motorcycles and all-terrain vehicles. The company is one of the best dividend stocks as it maintains a 27-year streak of consistent dividend growth. It currently pays a quarterly dividend of $0.64 per share and has a dividend yield of 2.71%, as of October 24.
In the second quarter of 2022, Polaris Inc. (NYSE:PII) paid $76 million to shareholders in dividends. The company had $314 million available in cash and cash equivalents at the end of June, up from $278 million six months ago.
In October, Baird reiterated its Outperform rating on Polaris Inc. (NYSE:PII) with a $120 price target. The firm appreciated the company’s retail availability but expects it to create a balance between supply and demand.
At the end of Q2 2022, 13 of the hedge funds tracked by Insider Monkey owned investments in Polaris Inc. (NYSE:PII), the same as in the previous quarter. The collective value of those stakes was $147 million, compared with $121 million worth of stakes owned by hedge funds in Q1 2022.
You can also take a look at 10 Best European Dividend Stocks to Buy Now and 12 Best Energy Dividend Stocks to Buy Now
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