There are many uncertainties when navigating the market right now, and times are tough. That is why we love dividend stocks. It’s honestly one of the best ways to go if you’re looking for solid long-term plays. However, research needs to be done ahead of time so as not to buy a stock that, let’s say, pays a lucrative dividend and is trading cheaply but can’t fall back on much more in terms of its actual performance. Without any particular stock in mind, this is just an example of why due diligence never hurts.
I write a lot of lists, plenty of which cover dividends, so it’s good to try and add some new flavoring to the mix when I’m able. That said, today, I’ll look specifically at dividend stocks with attractive metrics that are trading at or near the bottom of their 52-week ranges. They are also down year-to-date (thus offering nice upside potential) and are rated as being significantly less volatile than the broader market.
The aforementioned stocks do exist, and I have three for us to break down. Top analysts are telling us to buy and hold these passive income providers. So, let’s take a good look:
Northwest Natural Holding Co (NWN)
Northwest Natural Holding Co. (NWN) operates through its subsidiaries to distribute local gas and water. NWN provides natural gas primarily to Oregon and southwest Washington customers of many kinds, including commercial, residential, and industrial. NWN was formed in 1859 and is based in Portland, OR. NWN’s stock is currently down by 6.09% YTD, close to its 52-week low, yet has a safe beta of 0.57. NWN has a $1.69 billion market cap and an EV of $3.34 billion, with impressive TTM revenue of $1.15 billion at $2.75 per share, from which it made a modest $101 million profit via its 8.35% net margin. NWN can boast MRQ analyst-forecasted EPS and revenue beats by 5.95% and 26.53%, respectively, and shows YOY growth in revenue (+32.01%), net income (+27.44%), and EPS (+11.67%). NWN has a P/E ratio of 18.5x, a P/S ratio of 1.54, and a P/B ratio of 1.44x. NWN has a dividend yield of 4.34%, with a quarterly payout of 48 cents ($1.92/yr) per share using a 70.36% payout ratio. With an under-the-radar 10-day average volume of 149,430 shares, NWN’s median price target is $51.50, with a high of $61 and a low of $45, representing a potential price jump of 36.5% from its current position. Buy/Hold.
Essential Utilities Inc (WTRG)
Essential Utilities, Inc. (WTRG) is a holding firm that offers water, wastewater, and natural gas services through its subsidiaries, including regulated water utility companies and natural gas utility businesses. WTRG was created in 1968 and is headquartered in Bryn Mawr, PA. As far as its stock is concerned, it recently hit its 52-week low and is down YTD by 15.13%. Like NWN, it still holds a 0.78 beta, and anything lower than 1 indicates safety from volatility. With a market cap of $11.15 billion, WTRG shows TTM revenue of $2.32 billion at $1.73 per share, with a net profit of $457 million via its 19.75% margin. With MRQ analyst EPS and revenue surprises of 1.89% and 6.38%, respectively, WTRG has a P/E ratio of 24x, a forward P/E of 22.99x, a PEG ratio of 2.8x, and a 2.11x P/B ratio. WTRG has a 2.93% dividend yield and a quarterly payout of 29 cents ($1.16/yr) per share, with a 65.27% payout ratio. With a 10-day average trading volume of 1.08 million shares, WTRG has a $54 median price target, with a high of $71 and a $44 low, indicating a potential 75.3% price jump from its current spot. Buy/Hold.
International Business Machines Corp (IBM)
International Business Machines Corp. (IBM) is a widely known information technology firm that utilizes its general business knowledge. For example, IBM uses software solutions to assist customers in becoming more data-driven. IBM has also effectively incorporated AI into software to accelerate hybrid cloud advantages for clients and businesses. On June 16th, 1911, Charles Flint and Thomas Watson created IBM, which is located in Armonk, NY. Although it trades higher than its counterparts on the list, in context, it’s still considered a bargain; IBM stock is down 9.49% YTD and has hung out near the bottom of its 52-week range, and maybe you know it’s coming: it still has a 0.85 beta. With an enterprise value of almost $160 billion, IBM shows TTM revenue of $60.5 billion at $2.25 per share, a P/E ratio of 13.28x, a 2.09x PEG ratio, and a P/S of 1.9x, not to mention an MRQ 9.73% analyst consensus EPS beat. IBM has a free cash flow of $9.96 billion. With its 5.21% annual yield, IBM pays a quarterly dividend of $1.66 ($6.64/yr) per share, utilizing its generous 72.75% payout ratio. With a 10-day average volume of 3.78 million shares, IBM has an analyst-assigned median price target of $140, with a $162 high and a low of $110, representing a potential 27% price jump from its current place. Buy/Hold.
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