12 Undervalued Stocks that Just Raised Dividends

For dividend investors, few signals are as compelling as a company increasing its dividend. It often indicates confidence in future earnings and financial stability. When those dividend hikes come from undervalued stocks, they represent an even more enticing opportunity—offering both income and potential price appreciation. Here are 12 undervalued stocks that recently raised their dividends, making them worthy of consideration.

1. Pfizer Inc. (PFE)

• Dividend Increase: 5%

• Why It’s Undervalued: With declining COVID-related revenues, Pfizer’s stock has been under pressure. However, its pipeline of new drugs and a commitment to shareholder returns make it an attractive long-term play.

2. Chevron Corporation (CVX)

• Dividend Increase: 8%

• Why It’s Undervalued: Despite energy price volatility, Chevron’s strong balance sheet and efficient capital allocation support continued dividend growth.

3. Intel Corporation (INTC)

• Dividend Increase: 7%

• Why It’s Undervalued: Intel is investing heavily in semiconductor manufacturing and AI capabilities, positioning itself for long-term growth.

4. 3M Company (MMM)

• Dividend Increase: 3%

• Why It’s Undervalued: Legal issues and restructuring efforts have weighed on the stock, but its diversified revenue streams and history of dividend increases make it appealing.

5. Bristol-Myers Squibb (BMY)

• Dividend Increase: 5.3%

• Why It’s Undervalued: Concerns about expiring patents have impacted the stock, yet strong cash flow and new drug approvals support continued dividends.

6. Verizon Communications (VZ)

• Dividend Increase: 2%

• Why It’s Undervalued: The telecom giant’s high dividend yield and consistent cash flow make it a stable income investment despite competition in the sector.

7. Johnson & Johnson (JNJ)

• Dividend Increase: 6%

• Why It’s Undervalued: Legal challenges have dampened sentiment, but its strong balance sheet and healthcare dominance ensure long-term growth.

8. Bank of America (BAC)

• Dividend Increase: 9%

• Why It’s Undervalued: Higher interest rates benefit banks, and despite economic concerns, BAC’s strong fundamentals support dividend growth.

9. ExxonMobil (XOM)

• Dividend Increase: 7%

• Why It’s Undervalued: With oil prices fluctuating, ExxonMobil remains a leader in energy, benefiting from strong cash flow and disciplined capital investment.

10. Medtronic plc (MDT)

• Dividend Increase: 5%

• Why It’s Undervalued: The medical device company has faced supply chain disruptions, but innovation in healthcare technology supports long-term growth.

11. PepsiCo, Inc. (PEP)

• Dividend Increase: 6%

• Why It’s Undervalued: Despite economic headwinds, PepsiCo’s brand strength and pricing power make it a reliable dividend grower.

12. Target Corporation (TGT)

• Dividend Increase: 5%

• Why It’s Undervalued: Retail challenges have pressured the stock, but its strong market position and efficiency improvements signal long-term value.

Conclusion

These 12 stocks offer investors a unique blend of income generation and potential price appreciation. Their recent dividend hikes suggest financial strength, while their undervalued status provides an opportunity for long-term gains. For income-focused investors, these stocks are worth a closer look.