Expect healthy capital gains from these massively undervalued dividend stocks
These undervalued dividend stocks are poised for a strong rally in the coming months.
In general, the biggest reason for holding dividend stocks is to generate regular cash flows. Furthermore, dividend stocks are typically low-beta stocks and help in balancing overall portfolio risk. However, that does not mean dividend stocks cannot produce healthy capital gains.
Over the past 10 years, the S&P 500 High Dividend Index has delivered an annualized price return of 6.95%. For the same period, the annualized total return is 8.86%. Clearly, price returns have been robust.
With the global markets facing uncertainty related to inflation and recession, there are several dividend stocks that have corrected and trade at attractive valuations. It’s just a matter of time before these quality blue-chip stocks fill the valuation gap. By doing so, they are likely to outperform.
With the four dividend stocks below, investors can position themselves for steady income and meaningful appreciation. And considering the revenue and earnings growth outlook of the underlying companies, these dividend stocks are worth holding for the long term.
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