In this article, we discuss 12 best dividend stocks that are undervalued and have recently raised their payouts. Despite the underperformance of dividend stocks in 2023, there are favorable opportunities for long-term investors to identify undervalued stocks. Analysts recommend investing in undervalued equities as they have the potential to offer higher returns in the long run.
Undervalued stocks are those that are trading below their intrinsic value, providing a good opportunity for investors. Value stocks have historically outperformed growth stocks, offering higher dividend yields and stronger fundamental ratios. Studies have shown that value investing yields average returns of over 7% per year higher than growth stocks over extended periods.
Companies worldwide are steadily raising their dividend payouts to attract investor interest. Global dividends have shown a consistent upward trend, with global dividends growing from $1.24 trillion in 2017 to $1.66 trillion in 2023. The dividend outlook for European companies is also promising, with expectations to distribute €620 billion ($667 billion) to shareholders this year.
Some of the best dividend stocks that have recently raised their dividends include AbbVie Inc. (NYSE:ABBV), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP). These companies have long dividend growth streaks and are currently undervalued.
For this list, we identified 30 stocks with trailing twelve months price-to-earnings (P/E) ratios of under 25, as of May 13. These stocks are ranked in descending order of their PE ratios and have been analyzed based on hedge fund sentiment data.
Some of the undervalued stocks that have recently raised their dividends include Marriott International, Inc. (NASDAQ:MAR), Simpson Manufacturing Co., Inc. (NYSE:SSD), RLI Corp. (NYSE:RLI), International Business Machines Corporation (NYSE:IBM), The Timken Company (NYSE:TKR), Sunoco LP (NYSE:SUN), and Atlas Energy Solutions Inc. (NYSE:AESI). These companies have shown consistent dividend growth and offer attractive dividend yields.
Overall, investing in undervalued dividend stocks can be a lucrative opportunity for investors looking for steady income streams and long-term growth potential. Keep an eye on these undervalued stocks that have recently raised their dividends for potential investment opportunities.