When you’re on the hunt for top-notch dividend growth stocks, the Dividend Aristocrats are hard to beat. Finding these stocks at a bargain is rare, so when you do, it’s wise to seize the opportunity quickly.
Currently, there are 53 companies that enjoy Dividend Aristocrat status. To qualify, a company must:
– Be part of the S&P 500
– Meet specific size and liquidity standards
– Increase dividends for at least 25 consecutive years
These companies are often well-established and can be pricey, which affects future returns. However, even in today’s market, there are still deals out there—you just need to know where to look. We’re highlighting the top 5 undervalued Dividend Aristocrats today and explaining why each is a strong buy right now.
### Our Top 5 Undervalued Dividend Aristocrats
**1. Walgreens Boots Alliance (WBA):**
Walgreens, established in 1901 in Chicago, operates a vast pharmacy and retail network spanning over 13,200 stores in 11 countries. Its impressive performance includes a 7.2% rise in sales and a 15.5% increase in earnings per share recently. With a predicted earnings-per-share range of $5.45 to $5.70 for 2018, its current price-to-earnings ratio of 12.6 is well below its decade average of 16.7, indicating potential for investment.
**2. Exxon Mobil:**
Exxon Mobil, the world’s largest public integrated energy company, operates across various sectors like Upstream, Downstream, and Chemical. While the energy market is volatile, Exxon’s valuation seems favorable right now, with a PE 10 method suggesting a fair value of $89, compared to a current price of $78. The discrepancy indicates a promising opportunity, especially if oil prices normalize.
**3. Cardinal Health:**
As one of the major players in drug distribution, Cardinal Health has a substantial presence in U.S. pharmacies and hospitals. The company recently adjusted its 2018 financial outlook, setting expected earnings-per-share between $5.25 and $5.50. With its stocks trading at about $69, this results in a low price-to-earnings ratio of 12.9, suggesting it’s undervalued compared to its average trading multiple of 17.
**4. AT&T:**
AT&T stands out for its substantial dividend yield, currently around 5.5%. The telecom giant’s revised earnings forecast for 2018 points to a low price-to-earnings ratio of 10.5. Given its average ratio is typically 14, investing now allows you to benefit from its dividends while awaiting price appreciation.
**5. Medtronic:**
As the largest maker of biomedical devices, Medtronic’s expansive operations in over 140 countries showcase its resilience, especially during economic downturns. With projections for around $5.50 in earnings-per-share this year, the company’s shares trade at a valuation that aligns closely with its long-term median, offering a stable investment due to strong growth prospects.
### Final Thoughts
These five companies—Walgreens, Exxon Mobil, Cardinal Health, AT&T, and Medtronic—are all solid picks for their dependable dividend history, growth potential, and current valuation. They are particularly enticing for those looking to enjoy increasing dividend income over time. Consider these dividend aristocrats as potential additions to your portfolio. Are these stocks truly undervalued? Let us know your thoughts!