Buy this ‘dirt-cheap,’ top dividend stock with a 4% yield: Morningstar

Morningstar has identified crop chemical producer FMC as a deeply undervalued dividend stock with long-term potential. Despite a 50% drop in shares over the past year due to global inventory destocking, Morningstar remains bullish on the company. FMC’s strong research and development pipeline, including new herbicides and fungicides, is expected to offset generic competition and drive revenue growth. The company’s focus on insecticides, which generate over half of its revenue, is expected to shift towards a more balanced portfolio of crop protection chemicals. With an indicated annual dividend yield of 4% for 2024, FMC is considered deeply undervalued by Morningstar, trading at half of its estimated value. The company has been given a five-star rating by Morningstar and is included in its list of “dirt-cheap” stocks to buy. Despite concerns about maintaining premium prices as patents expire, FMC is expected to outearn its cost of capital over the next decade. Sales are forecasted to return to a more normalized pattern, with EBITDA expected to grow at a low- to mid-single-digit rate over the next 10 years.