High-Quality Dividend Stocks That Are Trading Way Lower Than They Should

Aug. 21, 2015 7:13 AM ETCAT, QCOM, XOM21 Comments


  • The time to buy is when there is blood in the streets.
  • Having a target "Buy Zone" for a stock will give you the confidence to pull the trigger even when others are scared.
  • These 3 stocks are trading lower than the should and investors should consider buying them.

As we highlighted in an article earlier titled "It's Time To Buy...Not Time To Sell!", we believe that patient investors will be rewarded once again for "buying the dip".

Our investment plan is simple: Buy great stocks at good prices! And the current sell-off has already presented some fantastic opportunities in some great high-quality dividend stocks.

As a quick overview, we use a combination of fundamental and technical analysis to determine which stocks to buy and when to buy them. For dividend stocks in particular, we have a proprietary rating system that ranks over 500 U.S. dividend stocks on a weekly basis. Our ratings are derived by ranking each stock based on 30 key fundamental and technical data points across four rating categories: (1) Dividend, (2) Safety, (3) Value, and (4) Momentum. This rating system helps us quickly screen for great stocks (i.e., stocks with high Dividend, Safety and Value ratings).

In addition, we scan the charts of our top-rated stocks daily looking for strong levels of support and resistance, which ultimately helps us determine a target "Buy Zone" for each stock. We believe that patiently waiting for a low-risk entry point for a given stock will drastically improve your long-term investment results. We focus on four key levels of support when determining a "Buy Zone": (1) Key Technical Support, (2) Stock-Specific Volatility, (3) Valuation, and (4) Yield.

3 Dividend Stocks That Are Trading Lower Than They Should

The tables below summarize some of the key data points that we analyze when ranking our dividend stocks. These 3 stocks in particular have relatively high Dividend and Value ratings and we believe long-term dividend investors should consider purchasing them at current levels.

Caterpillar Inc. (CAT)

Founded in 1925, Caterpillar, the largest manufacturer/marketer of construction equipment worldwide, is also a leading manufacturer of diesel engines

This article was written by

Parsimony Research provides option income research, tools, and analysis to investors subscribed to the Option Income Advisor.   The Triple Income Wheel strategy (cash-secured puts and covered calls) will help you generate more income with less downside risk (compared to a traditional buy and hold dividend stock portfolio).YouTube:  Triple Income Wheel

Disclosure: I am/we are long XOM, QCOM, CAT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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