Yahoo Finance Is It Time To Buy These Beaten Down Dividend Stocks?
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Amid the growing volatility in the stock market, as the macroeconomic headwinds and geopolitical tensions pile on, investors are increasingly being drawn towards high-paying dividend stocks. These stocks often emerge as an attractive option for those seeking a balance of income and potential appreciation.
However, as investors focus on mega-cap tech companies following their stellar first-quarter earnings report this earnings season, industry stalwarts and well-respected dividend stocks have taken a back seat. With Wall Street’s fear gauge, the CBOE Volatility Index, jumping to nearly 25% so far this year, these beaten-down dividend stocks might be some of the safest bets right now.
PepsiCo
PepsiCo Inc. (NASDAQ:PEP) has carved a name for itself in the global beverage industry and is long regarded as one of the safest investment bets. Nonetheless, in the era of artificial intelligence, the stalwart has failed to garner adequate investor attention, as evidenced by PEP shares’ 7.4% decline over the past year.
The company currently pays $5.06 in dividends annually, yielding 2.86% on its current share price. PepsiCo is a Dividend Aristocrat as well, having raised its payouts for 51 consecutive years. Interestingly, PepsiCo’s annual dividends have risen at a compound annual growth rate (CAGR) of 6.4% over the past five years.
PepsiCo’s diversified portfolio might cushion the blow amid increased headwinds, as its snacks segment, including brands like Lay’s and Doritos, remain budget-friendly household favorites. With a history of consistent dividends, PepsiCo might be a sweet spot for those eyeing long-term stability.
Analysts forecast PepsiCo’s share price to recover in the near term as well, as Jefferies has a “Buy” rating on PEP stock with a price target of $209, indicating a potential upside of nearly 20%. Wedbush also has an “Outperform” rating on PEP with a price target of $195, indicating a potential upside of over 10%.
Check out: The New Pepsi Challenge: A Dividend Stock Showdown Between Coca-Cola and PepsiCo
BCE
Down over 31% over the past year, shares of BCE Inc. (NYSE:BCE), Canada’s largest telecom company, is certainly not doing well.
However, the telecom giant’s dividend profile is highly enticing, as it pays $2.91 in dividends annually, yielding a whopping 8.83% on its current share price.
While the telecom industry faces regulatory pressures and technological disruptions, BCE’s position as a leading Canadian telecommunications company is hard to ignore. Its robust infrastructure and steady cash flows from essential services like the Internet and mobile make it an attractive option for income-seeking investors.
With a staggering compounded annual growth rate of 10.9% per annum over the past five years, BCE’s robust dividend policy may entice investors seeking income stability.
United Parcel Service
The Atlanta-based global shipping giant United Parcel Service Inc. (NYSE:UPS) has faced several challenges over the past year, leading its shares to plummet by over 18% over this period.
Nevertheless, its dividend metrics are turning heads. United Parcel Service maintains an annual dividend payout of $6.52 per share per annum, translating to a dividend yield of 4.42% on its current share price.
As e-commerce continues to thrive, UPS’s essential role in the supply chain positions it as a potential long-term investment opportunity. Analysts are currently bullish on UPS, as both Deutsche Bank and HSBC have a “Buy” rating on the stock. Deutsche Bank has a price target of $179 on UPS, indicating a potential upside of nearly 22%. HSBC, on the other hand, maintains its price target on UPS stock at $170, reflecting a nearly 15% potential upside.
High Yield, Hold the Volatility
While these stocks offer the potential for significant upside, the fact that they’re beaten down in the first place demonstrates the risks associated with investing in dividend stocks for passive income.
If you're intrigued by the idea of generating reliable passive income but want to explore opportunities beyond the stock market, consider these two alternative investment platforms:
Arrived Homes: This platform allows you to invest in rental properties for as little as $100, providing the potential for steady rental income and long-term appreciation without the hassles of being a landlord. With an average annualized dividend yield of 4.2% and the backing of notable investors like Amazon founder Jeff Bezos, Arrived Homes is worth exploring. Click here to explore available properties on the platform.
Cityfunds Yield Fund: The Cityfunds Yield fund offers investors a target annualized yield of 8% (with a guaranteed floor of 7%) by investing in a diversified pool of collateralized real estate loans. With quarterly distributions and a low minimum investment of $500, this fund provides an attractive option for income-focused investors looking to diversify their portfolios. Click here to learn more about the Yield fund or view other Cityfund offerings.
Both platforms offer unique opportunities to generate passive income through real estate investments, without the volatility often associated with the stock market.
This article Is It Time To Buy These Beaten Down Dividend Stocks? originally appeared on Benzinga.com
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