The largest pure-play medical device maker is a key partner for its hospital customers, thanks to its diversified product portfolio aimed at a wide range of chronic diseases, explains Morningstar senior analyst Debbie Wang. Medtronic stock trades 25% below our $112 fair value. Comcast instituted a dividend in 2008 and has increased its payout 17% annually, on average, notes Hodel-and we think the balance sheet is sound and shareholder returns are generally appropriate. While broadband customer growth is anemic and NBC Universal is challenged, we think Comcast is well positioned to limit broadband share losses and enjoy solid pricing power, says Hodel. ComcastĬomcast is a cheap stock by our measures, as shares trade 36% below our $60 fair value estimate. Kerwin calls the company’s shareholder returns program “excellent,” and the company maintains a growing dividend at a high payout ratio. Given our confidence in Cisco’s leadership, we recently upgraded our Morningstar Economic Moat Rating on the company to wide from narrow. The dominant force in enterprise networking, Cisco maintains leading market shares across switching, routing, and wireless access, observes Morningstar analyst William Kerwin. We think Cisco stock is worth $54 per share shares currently trade about 12% below that.
8 BEST CHEAP STOCKS TO BUY NOW UNDER FREE
This dividend stock offers the highest forward yield on our list Hodel observes that 50%-60% of Verizon’s free cash flow is committed to the dividend. Hodel expects margins and cash flow to move higher as network projects are completed and the promotional environment eases. We think the market is overly focused on Verizon’s challenges to add postpaid consumer wireless customers, says Morningstar director Mike Hodel. Verizon is clearly a cheap dividend stock, trading a whopping 30% below our fair value estimate of $57. Here’s a little bit about each stock along with some key Morningstar metrics about each. The dividend stocks on this list are among the index’s constituents, and they’re also cheap, trading well below our fair value estimates as of Feb 10, 2023.Ĩ) International Flavors & Fragrances IFF To find undervalued stocks with safe dividends, we turn to the Morningstar Dividend Yield Focus Index.
10 Cheap Stocks to Buy With Stable Dividends Quality companies have the financial stability to maintain their dividends during questionable economic periods, and price risk is reduced when investors can buy the stocks of these companies for less than what they’re worth. Given ongoing economic uncertainty and market volatility, investors might consider adding cheap, quality dividend stocks to their portfolios. We found that the wider the economic moat and the better the distance to default score, the less likely for a firm to cut its dividend,” he says. It looks at leverage and volatility and gauges whether the sum of a firm’s assets are at risk of falling below its liabilities. “Distance to default is a measure of balance sheet strength.
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