Looking to purchase a solid dividend stock at an excellent price? Here’s my selection of three stocks that will not only add diversity to your investment portfolio but also enable you to receive higher-than-average dividends while potentially getting them for a steal.
Three currently undervalued stocks that you might consider not ignoring include
Bristol Myers Squibb
(NYSE: BMY)
,
United Parcel Service
(NYSE: UPS)
, and
Dell Technologies
(NYSE: DELL)
Here’s a detailed examination of why these stocks could be excellent purchases.
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Bristol Myers Squibb
The major pharmaceutical company Bristol Myers Squibb is being traded at a considerable discount; thus, you have the opportunity to purchase the stock with a forward
price-to-earnings (P/E) multiple
with an estimate of only 9. In contrast, the typical stock within the index has an average
S&P 500
trades at 21 times its projected future earnings.
Several factors may lead investors to adopt a pessimistic stance regarding this stock. Firstly, the company is anticipated to encounter several significant patent expirations soon. Secondly, the firm carries substantial debt; at the close of 2024, its long-term liabilities amounted to $47.6 billion. This figure appears particularly large when compared with its liquidity position: cash and marketable securities stood at only $11.2 billion. However, the immediate concern is less severe since the short-term debts maturing within the next year total merely $2 billion.
In the meantime, the company has been focused on expanding its business. Over the last year, they have obtained two significant approvals — one for the schizophrenia medication Cobenfy, and the second for the cancer therapy Breyanzi. Each of these holds substantial promise.
blockbuster drugs
That has the potential to generate billions in revenue for Bristol Myers Squibb.
The company’s dividend is still well-supported with strong financials — its
payout ratio
of 60% suggests it isn’t in any imminent danger, making its 4% yield an attractive option for dividend-focused investors to consider right now.
The stock carries certain risks, yet with promising growth ahead, the company appears well-positioned for future success. Additionally, considering the substantial discount, Bristol Myers Squibb’s affordable pricing could provide a reasonable return.
margin of safety
.
United Parcel Service
United Parcel Service, commonly referred to as UPS, has dropped by 25% in the last year, causing the stock’s valuation to fall below a forward price-to-earnings ratio of 15.
The logistics firm has faced challenges in achieving significant expansion over the past few years, and worries regarding tariffs and trade conflicts might render this an insecure stock to hold shortly. Should a downturn occur along with reduced trading activities, it would likely lead to decreased business for UPS.
Nevertheless, UPS stock remains an excellent choice for the long term. As a frontrunner in logistics, even though business may not be surging, it continues to remain lucrative. The firm reported a profit of $5.8 billion last year amidst revenues totaling $91.1 billion. Despite having a payout ratio close to 100%, the corporation maintains stability.
free cash flow
amounted to $6.2 billion last year, surpassing the $5.4 billion paid out as dividends.
The distribution remains secure, which could make this an attractive option for income-focused investors seeking stocks with its substantial yield of 5.7%.
Dell Technologies
A stock that could appeal to both dividend and growth investors right now is Dell. This computer firm is trading at an exceptionally low forward price-to-earnings ratio of just 10. With significant potential for expansion in the field of artificial intelligence, coupled with an upcoming mandatory upgrade cycle for PCs expected due to the cessation of support for over one billion Windows 10 devices later this year, Dell presents compelling prospects.
Dell’s server and networking division continues to perform well, showing a significant 54% increase in revenue during the latest fiscal year, which concluded on January 31. The introduction of AI-driven personal computers might further boost Dell’s expansion, making this an exciting prospect for substantial future success.
growth stock
.
The stock boasts a 2.2% dividend yield, which is the smallest among those listed here; however, it provides a solid equilibrium for investors since Dell’s low payout ratio of 28% allows it to sustain dividends effectively while also investing in growth prospects related to artificial intelligence.
Don’t let this second chance for a possibly profitable opportunity slip away.
Have you ever felt like you’ve missed out on purchasing the most profitable stocks? If so, you should definitely listen to this.
From time to time, our skilled group of analysts releases a
“Double Down” stock
Here’s a suggestion for businesses that seem poised for growth. Should you fear missing out on potential opportunities, this might be an ideal moment to purchase shares before it becomes too late. The data clearly indicates this trend.
-
Nvidia:
If you had put in $1,000 when we increased our investment in 2009,
you’d have $312,980
!* -
Apple:
If you had invested $1,000 when we increased our investment in 2008,
you’d have $42,421
!* -
Netflix:
If you had put in $1,000 when we increased our investment back in 2004,
you’d have $537,825
!*
Currently, we’re sending out “Double Down” alerts for three amazing companies, and such an opportunity might not come around again anytime soon.
Continue »
*Stock Advisor performance returns as of March 24, 2025
David Jagielski
does not hold any shares in the companies mentioned. However, The Motley Fool holds stakes in and endorses Bristol Myers Squibb. They also recommend investing in United Parcel Service. Furthermore, The Motley Fool has a
disclosure policy
.
