In this article, we discuss 5 dividend stocks that are too cheap to ignore. If you want to read our detailed analysis of dividend stocks and their returns in the past, go directly to read 10 Dividend Stocks That Are Too Cheap To Ignore.
5. Matthews International Corporation (NASDAQ:MATW)
Share Price as of October 10: $22.23
Matthews International Corporation (NASDAQ:MATW) is a provider of brand solutions and offers its services globally. In June, the company announced the acquisition of two German engineering firms which have combined annual revenue of over $100 million. This step was taken to enhance the company’s combined engineering capabilities.
Matthews International Corporation (NASDAQ:MATW) has been raising its dividends consistently for the past 23 years and its five-year dividend CAGR stands at 5.29%. This makes the company one of the best dividend stocks on our list. Currently, it pays a quarterly dividend of $0.22 per share and has a yield of 3.96%, as recorded on October 10.
In July, B. Riley maintained its Buy rating on Matthews International Corporation (NASDAQ:MATW) with a $22 price target, highlighting the company’s fiscal Q3 results. The firm acknowledged the company’s balance sheet and its improving fundamentals.
At the end of Q2 2022, 17 hedge funds tracked by Insider Monkey owned stakes in Matthews International Corporation (NASDAQ:MATW), up from 15 in the previous quarter. The collective value of these stakes is over $52 million. Among these hedge funds, GAMCO Investors owned the largest position in the company in Q2.
4. Enterprise Products Partners L.P. (NYSE:EPD)
Share Price as of October 10: $24.99
Enterprise Products Partners L.P. (NYSE:EPD) is a Texas-based midstream natural gas and crude oil pipeline company. It is one of the largest corporations in the US by revenue. In Q2 2022, the company reported strong cash generation, with its distributable cash flow coming in at $2 billion, compared with $1.6 billion during the same period last year. The company’s operating cash flow for the quarter also jumped to $2.1 billion, from $1.7 billion in the prior-year quarter.
On October 5, Enterprise Products Partners L.P. (NYSE:EPD) declared a quarterly dividend of $0.475 per share, in line with its previous dividend. The company is one of the best dividend stocks on our list because it has raised its dividends 22 years in a row. As of October 10, the stock’s dividend yield came in at 7.60%.
In June, Truist raised its price target on Enterprise Products Partners L.P. (NYSE:EPD) to $30 with a Buy rating on the shares, appreciating the company’s steady revenue growth over the years.
As of the close of Q2 2022, 23 hedge funds tracked by Insider Monkey owned investments in Enterprise Products Partners L.P. (NYSE:EPD), compared with 19 a quarter earlier. These stakes have a combined value of $184.4 million.
Fairholme Capital Management mentioned Enterprise Products Partners L.P. (NYSE:EPD) in its Q2 2022 investor letter. Here is what the firm has to say:
“Enterprise Products Partners L.P. (NYSE:EPD) is the largest position in the Fund. Enterprise provides processing and transportation services to producers and consumers of natural gas, natural gas liquids, and oil. These hydrocarbons are critical for modern life and have few if any, ready substitutes. Commodity prices do not greatly affect the company’s toll road fees. Enterprise is priced at less than nine times distributable cash flows and pays a 7.5% cash distribution.”
3. Coterra Energy Inc. (NYSE:CTRA)
Share Price as of October 10: $29.2
Coterra Energy Inc. (NYSE:CTRA) is an American company that is engaged in the exploration of hydrocarbon. The company’s cash generation makes it well-positioned to deliver superior and sustainable returns to shareholders. In Q2 2022, the company generated $405 million in free cash flow and paid 80% of its FCF to shareholders in dividends. Its operating cash flow for the quarter was $880 million, compared with $245 million during the same period last year.
Coterra Energy Inc. (NYSE:CTRA) maintains a 5-year streak of consistent dividend growth. Over these years, the company has raised its payouts at a CAGR of 32.6%, coming through as one of the best dividend stocks on our list. It pays a quarterly dividend of $0.65 per share and has a dividend yield of 2.05%, as of October 10.
In September, Citigroup raised its price targets on Coterra Energy Inc. (NYSE:CTRA) to $30 and maintained a Neutral rating on the shares. The firm noted that Exploration and Production companies are bouncing back after the pandemic which would lead to multiple expansions and yield compression.
At the end of June 2022, 40 hedge funds in Insider Monkey’s database owned stakes in Coterra Energy Inc. (NYSE:CTRA), up from 39 in the preceding quarter. The collective value of these stakes is over $437.3 million. With over 4.5 million stakes, Diamond Hill Capital was the company’s leading stakeholder in Q2.
Palm Valley Capital Management mentioned Coterra Energy Inc. (NYSE:CTRA) in its Q2 2022 investor letter. Here is what the firm has to say:
“We sold two Fund positions during the quarter which includes Coterra Energy (NYSE:CTRA). As a result of surging oil and natural gas prices, Coterra reached our valuation, and we exited the position in April.”
2. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Share Price as of October 10: $30.5
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is an American-British-Swiss holding company that owns retail pharmacy chains and several pharmaceutical companies. The company holds one of the longest dividend growth track records in the market, having raised its dividends for the past 47 years. It pays a quarterly dividend of $0.48 per share for a yield of 6.29%, as of October 10.
In the second quarter of 2022, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) reported strong cash generation. Its operating cash flow stood at over $1.6 billion, compared with $1.2 billion during the same period last year. The company generated $1.3 billion in free cash flow, up from $867 million in the prior-year quarter. It also reported a 2.4% growth in its US comparable sales during the quarter.
In October, Mizuho mentioned Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and highlighted the company’s longer-term growth algorithm. In view of this, the firm maintained its neutral rating on the stock with a $36 price target.
At the end of Q2 2022, 40 hedge funds tracked by Insider Monkey owned stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA), up from 38 in the previous quarter. These stakes have a consolidated value of roughly $600 million.
1. Invitation Homes Inc. (NYSE:INVH)
Share Price as of October 10: $32.3
Invitation Homes Inc. (NYSE:INVH) is a Texas-based real estate investment trust company that owns single-family rental homes in the US. In October, Barclays maintained an Overweight rating on the stock with a $41 price target as the single-family rental sector has outperformed this year. The firm also sees more durable rent growth in the sector in late 2022.
Invitation Homes Inc. (NYSE:INVH) has been raising its dividends consistently for the past four years. In the last three years, it raised its payouts at a CAGR of 18%. It currently pays a quarterly dividend of $0.22 per share and has a dividend yield of 2.72%, as of October 10.
The number of hedge funds tracked by Insider Monkey owning stakes in Invitation Homes Inc. (NYSE:INVH) stood at 27 in Q2 2022, falling from 33 in the previous quarter. The total value of these stakes is over $452.4 million. Jeffrey Furber and Israel Englander were the company’s most prominent stakeholders in Q2.
Baron Funds mentioned Invitation Homes Inc. (NYSE:INVH) in its Q2 2022 investor letter. Here is what the firm has to say:
“Single-Family Rental REITs (7.8%): We are bullish about the Fund’s investments in single-family rental REIT Invitation Homes, Inc. (NYSE:INVH). Demand conditions for rental homes are attractive due to a decline in home purchase affordability, the propensity to rent, and the strong desire by households to rent homes in suburbs rather than rent apartments in cities. Regarding new construction activity, there is a limited supply of single-family rental homes in the U.S. housing market, increasingly constrained by rising construction costs. Limited inventory combined with strong demand is leading to robust rent growth. Invitation Homes has an opportunity to partially offset inflation given that in-place annual leases are significantly below market rents. Valuations are compelling at less than $400,000 per home and at 5% capitalization rates.”
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