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Buy Alert: These 5 Undervalued Blue Chip Dividend Stocks Are Gaining Momentum

Apr. 11, 2021 11:33 AM ETMO, AVGO, OKE, UNM, SSB99 Comments


  • The S&P 500 has shot straight through 4,000.
  • Talking heads are now calling markets expensive.
  • But if you know where to look, there is always something worth buying.
  • Looking for a portfolio of ideas like this one? Members of The Dividend Freedom Tribe get exclusive access to our model portfolio. Learn More »

Goalkeepers: The Global Goals 2017
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Life is not fair, get used to it - Bill Gates

Written by Sam Kovacs


Life isn't fair. We'd all be well served to take Bill Gates advice when investing in

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We presented 5 ideas here, which will likely give a nice boost to your portfolio. But if you want to focus on value stocks, in a framework which also leads to a dividend rich retirement, you'll need more.

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This article was written by

Robert & Sam Kovacs profile picture

Hi there! We're Robert & Sam, a dad & son team of dividend investors.

If you're looking for regular analysis of some of the best dividend opportunities, you're in the right place!

We regularly publish articles highlighting high quality companies, with superior management and dividend policies, which are trading at great prices.

Whether you're retired or still accumulating, we offer a path towards reducing risk while achieving strong returns.

We eat, breathe and sleeep dividend investing. We've poured thousands of hours of our lives into researching, creating original strategies, and developing tech solutions which make investing a breeze.

If you want to benefit from all of this, you should seriously consider trying "The Dividend Freedom Tribe", which includes a training course, three model portfolios, weekly in depth analysis, our buy/watch/sell lists, access to MAD Dividends Plus for free, as well as a community of lively dividend investors.

Contributing authors for The Dividend Freedom Tribe include Tomas Andrade Campanini and Mike Zaccardi, CFA, CMT

Analyst’s Disclosure: I am/we are long AVGO, BAC, JPM, MO, OKE, SSB, T, UNM. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (99)

Guess ill think about selling lowes or hd when they have a down day.Housing market on fire,Interest rates low people want to remodel
NVDIA should be considered a buy as well.
" SSB: a $10,000 investment with dividend reinvestment at the current yield would generate $914 in 10 years, between a good and great outcome." Yuv got to be kidding.
Dividend Ambassador profile picture
Sam so this is a great list. But, you totally forgot BTI.
@killiondt I thought the same thing, MO is very undervalued but BTI is probably even more undervalued.
"A $10,000 investment in MO at 6.7% with 0.5% dividend growth and reinvestment at the current yield would generate $1,196 in dividends in 10 years, of which $529 would come from having reinvested dividends."

I don't follow the math.... that's $670/year in dividends.... what am I missing??
@Woodygg Without doing the math, my guess is that he meant it would produce $1196 in dividends in year 10
@Ephmen85 ah.... thanks. Yes, he should've written it like that! Duh.... I figured I was missing something painfully obvious!
Eileen Dover profile picture
@Ephmen85 That's what I thought too. It was not that clear to those who read it quickly.
Thank you
Great article. Where do pipes like WMB and KMI sit on the MAD charts? Thanks
Cuip99 profile picture
And this is why I keep significant amounts of cash on the side. I am ready to take advantage when dips come and when I buy I do so prudently. I am not an all in king of guy. Have a plan and philosophy and use them and invest accordingly. I shy away from the FANGs and go for the dividends. Works for me.
daltonb profile picture
@Cuip99 Park the cash in BSV (or similar) right now and wait, I say. Not much value in US markets right now. I have re Focused on Europe .... yours truly believes that as they dig themselves out of the mire (mostly self inflicted) in the next 6-9 months ...... the markets will re evaluate.

All cycles end .... and the current cycle will end, I believe, soon ..... then new opportunities will present themselves ..... invest the cash you parked .... patience pays.

Too bad because any of the FANGS would have made more money than 50 years of dividend payments from these guys. Diversity is the right play.
daltonb profile picture
@2CommaClub Time is relative here .... and hindsight is always 20:20 .....a great number of FAANGs never existed 50 years ago .....
cssys profile picture
love avgo..
birder 4000 profile picture
Back in June of 2020 UNM caught my eye too. Perhaps it was an article by you. I do not recall. I bought a fairly good sized position in it for me. My current gain is 77.6% on that position. Am I pleased, you bet. That does not even take into account the dividends which add another 7.3%. If only all of my investment decisions could be even half so good. You do provide excellent advice. Thanks.
Bin there dun that profile picture
@birder 4000
You have been lucky with $UNM.
It's long term care liability exposure is a ticking time bomb.
That is why the share price was so depressed a while ago (relatively speaking)..
It has recovered somewhat, but the main problem still remains.
@Bin there dun that They are pricing their way out of that by asking for and getting 10 to 12% increases on premiums from insurance regulators and then offering to reduce either the COLA on the product or the amount of coverage in exchange for no premium increase to policy holders.
@Bin there dun that My wife and I have long-term care policies with Unum. Our premiums were increased by 100% last year! The ticking time bomb was handed over to the customers.
team Gabe profile picture
$NYCB cheap regional bank
Mili21 profile picture
@team Gabe
Not long ago (2016), NYCB cut it's dividends...so technically it's not a bluechip.
UNM is a good stock, but I prefer ORI which is one of my largest holdings. Have owned them for years and their yield is usually on part with UNM, but it's a little lower due to their recent run up in price. ORI is an exceptional company, would love to see you guys write an article about them. Long ORI and PRU
Robert and Sam, thanks. I'm new and still getting through all your writings. Haven't done any buying yet, since almost fully invested, and not easy to sell what you believe is a good stuff. One of my long held issue is AB. Not an ordinary stock, but a special issue, illiquid, but which pays about 7-10% more than a regular distribution. It's been with me for about 25 years and I don't have any regrets. For now I'll hold it, even if you rate it SELL. I would like to see how this stock looks on your MAD chart, but couldn't find how to get MAD chart for this stock ( as a matter of fact for any stock). And is it possible to get a MAD chart for long period of time?
Another thing: The problem is I cant wait 5-10 years to get dividends increase to cover my RMD. Until last year RMD was practically fully covered by distributions from various REITs, BDC, and such. However, as you know, many of them because margin calls had cut drastically distributions. So, I'm leaning toward getting a mix of hi-growth stock, as AMZN, MSFT, GOOG, APPL , Asset Managers, as BX , BAM, KKR, IEP +financials C, AmEx, and so on. So, I'm eventually going to go with your HI yield portfolio, which is for the moment can't satisfy my RMD with distributions only. Any advice?
@jraskib Have you thought about adding some utilities to your portfolio?
@jraskib I agree it's nice to have the income to fund your RMD, but don't worry about it too much. Retirement accounts are designed for a slow liquidation, so if you need to sell off a bit a principal each year it's not the end of the world.
Eileen Dover profile picture
@dividendmama Or Dividend CEFs at nice yields like 6-8% (UTG, UTF, BUI, HTD, PDT)until the big utilities have to borrow at increased rates when Powell finally raises them by 2022. The stock prices of utes will drop 10-20%.
OKE Was under 21 because I bought it twice under 21
Good article and I know TGT has got lofty, but I originally bought 10k worth at $54 a few years ago, and pocketed my 10k when it doubled, and let my gains aka gravy ride. That gravy is up 400%, so IMO, just let it ride and drip the divvy. Playing with the houses money is a easy no brainer.

The stocks I own that have been undervalued and still are, that pay nice growing dividends are AMGN, LMT, PRU. Own DUK and a yieldco, and may check out OKE. AVGO was the buy at $170, that I failed to pounce on, and waiting for the enivitable correction to buy some.

God stuff as always, thx! Long most names.
@RWilliam High praise
@wmbewl02 Amen.
Eileen Dover profile picture
@wmbewl02 nice one wmbewl02 - I got it, most did not !
BM Cashflow Detective profile picture
The result is that, to quote whoever coined the phrase, "it is a market of stocks and not a stock market".

Well, maybe it was Chuck Carnevale, wasn't it ?!
BM Cashflow Detective profile picture
@Robert & Sam Kovacs
Yes, I agree with you. There is no source for it. Now I know it too.

Since this saying was mentioned repeatedly in the articles by Chuck Carnevale, Dividend Sensei, and Dividend Kings in relation to Chuck, I mistakenly assumed that it was originally his own.

But after my own unsuccessful search for a source on the original author, nothing was more natural than to ultimately ask Chuck personally.

Unfortunately he couldn't tell me where this phrase originally came from, or who said it first. In any case, it wasn't him. In his opinion, it is also more of a principle than a quote, such as "buy low sell high" etc.

It is also an old saying, but for him it is more of a descriptive phrase that suggests that not all stocks are the same. Finally, there are many nuance meanings that the phrase implies.

Well, as I had already indicated, I wasn't sure. It's good that this gap has now been filled.

I would like to take this opportunity to thank Chuck Carnevale again, who was willing to answer this question quickly and easily. Very appreciated.
@Robert & Sam Kovacs Found on google that it was cited in print as early as 1928, author unknown.
clarkaroo profile picture
Long AVGO, MO, OKE, and T. Unfortunately I do not buy in $10,000 increments, but I'm grateful to buy at all. And grateful I bought them in March-April 2020! SA articles similar to yours gave me the courage to do it.

I wonder, 2+ years from now when OKE is bumping toward $120, if I will sell it for the profits or leave it alone for compounding?
@clarkaroo I looked at Argus Research and they feel that there is a liklihood of a dividend cut. You may want to look at ENB and compare.
@RFoscolo old news that didn’t happen
Eileen Dover profile picture
@RFoscolo I always read articles that OKE can't maintain their lofty dividend so I stayed away, but it's still there.
Thanks for the article. I filled out my long positions in both AVGO ($290 cost basis) and OKE ($45 cost basis) last year. I worried about OKE dividend cut but lowered my cost basis. Started buying AVGO in late 2019 and filled out my position last year. I like AVGO better than OKE at this time. I will revisit UNN.
Fwc3030 profile picture
Guys, nice article. Nice choices. Great story and outcome on OKE.

I'm long OKE, SSB and UNM. In the case of the latter made my first purchase April 21, 2020 @ $14.45 / share. Not in MO (or BTI) for personal reasons.

As for AVGO, have been lured on several occasions to buy. Like business and futures. But at $400 - $500 / share, could only have purchased 5 - 6 shares and maintained diversification discipline. Decided to employ capital in other opportunities. Perhaps I'm looking at that incorrectly?

Hungarian Aristocrat fortune, eh? Last time I heard that one it originated in Nigeria. But funny none-the-less. :-)
Robert & Sam Kovacs profile picture
@Fwc3030 It might have been less credible if I tried to pass as Nigerian...

As for AVGO, I'm not sure what the issue in owning only 4-5 shares would be?

Thanks for reading,

Kind regards,

Fwc3030 profile picture
@Robert & Sam Kovacs True. And Austrian sounds so much more distinguished...just like Swiss.

RE: AVGO. I honestly don't know myself as it really is all about risk-adjusted return on capital employed. An illogical thought process or perception on my part.

BTW - Glad to own some SSB. Every time I happen to think about it, instinct makes me feel good about the buy. (Of course, my instincts have been occasionally wrong.) Time will tell.

Best Regards,
@Fwc3030 I'm in UNM a month before you for basically the same price. I took a very tiny nibble (40 shares), and while I'm obviously pleased, I always have a hard time paying significantly more for additional shares of a winner. That's one of my weaknesses as an investor. I've always found it easier to average down, but it's often better to average up because that means that your thesis is working.
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