9 Undervalued Dividend Growth Stocks To Research This Week

Welcome back to this weekly series reviewing the market and identifying undervalued dividend growth stocks to research.

Well, well, what a volatile week – for growth companies at least! It amazes me that large cap stocks can move so extreme as if they were penny stocks. Facebook, Google, Spotify, Snap, the list goes on of companies that saw extreme swings this week. It is in weeks like this that I am glad to be a dividend growth investor. It lets me sleep better at night not having to worry as much about the ups and downs and be able to focus on the income that comes in from my portfolio.

If we are long-term focused, which we all should be, we should look at volatility and lower prices as a good thing since we are focused on accumulating more shares to give us more income. In fact, if you are never going to use the principal, you should want stocks to decline for an extended time. All else being equal, lower prices will give higher yields, which will get the dividend snowball moving quicker and allow us to use the dividend income sooner to live off of. If prices keep going up, our investment dollars don’t go as far.

Even with all the volatility in the market, the indexes actually had a very solid week, with the Dow up 1.05%, the S&P500 up 1.55%, and the NASDAQ taking the lead at 2.38% increase. The year-to-date returns are still negative across the board so that still gives us opportunity to find quality dividend growth companies at lower valuations, which gives us more yield.

With that said, here are some quality dividend growth stocks that are appearing undervalued based on all 5 of my valuation methods, including:

1. Discount to Analyst Price Target
2. 5% or more off the 52-week high
3. Discounted Cash Flow (DCF)
4. P/E Mean Reversion
5. Dividend Yield Theory (DYT)

For more information on how to calculate these valuation formulas, check out my How to Value a Dividend Stock post: https://dividendstockpile.com/how-to-value-a-dividend-growth-stock/

The following are new companies on the list this week:

• FNF
• HBI

The others – BMY, MDT, MMM, SWK, SYY, UGI, and WBA continue from last week as remaining undervalued.

As I mention each week, valuation is only one part of the decision puzzle that investors need to evaluate. Other metrics, dividend safety, earnings growth, payout ratio and other metrics should be considered before investing.

Thanks for reading and happy investing!