More Stocks With Safe Dividends That Morningstar And Value Line Both Think Are Undervalued

Summary

• In my previous article, I went looking for undervalued stocks with dividends rated VERY SAFE (above 80 points) by Simply Safe Dividends.
• This article looks at stocks with dividends rated SAFE (61-80 points) by Simply Safe Dividends.
• Nearly all of the stocks that passed the screening process yield above 3% and are considered undervalued by both Morningstar and Value Line.

I used a methodology similar to my previous article, I ran a screen for stocks considered undervalued (4 or 5 star) by Morningstar and then cross-checked that list against the Dividend Safety Score from Simply Safe Dividends. In my previous article, I was looking for stocks with dividends rated VERY SAFE (above 80 points) by SSD. This article looks for stocks rated SAFE (61-80 points) by SSD. Both screens produced a total of eleven stocks, but there is one notable difference between the two lists. The stocks on this list have significantly higher dividend yields. Nearly all of the stocks in this article have dividend yields above 3%. (See table below)

Stock	Ticker Symbol	SSD Score	Yield
Bristol-Myers Squibb	BMY	79	3.48%
Campbell Soup	CPB	70	3.43%
Dominion Energy	D	80	3.32%
Emerson Electric	EMR	78	2.22%
Gilead Sciences	GILD	70	4.04%
Kellogg	K	66	3.70%
Coca-Cola	KO	80	2.99%
Philip Morris Intl.	PM	64	5.55%
Pinnacle West Capital	PNW	70	5.13%
Unilever	UL	75	3.78%
3 M Corp.	MMM	75	3.34%

For valuation metrics, I used the same methodology as in my previous article. In addition to Morningstar, I consulted Value Line for their 18 Month Target Price Midpoint and Dividend Radar for their estimate of fair value. Then I calculated a Price to Fair Value Ratio for all three sources. (see table below)

Stock	Stock	Fair Value	Midpoint	Price to FV	Price to FV	Price to FV
	Price	Morningstar	Value Line	Morningstar	Value Line	Div Radar
BMY	56.36	68.00	70.00	0.83	0.81	0.55
CPB	43.15	48.50	50.00	0.89	0.86	n/r
D	75.96	81.00	80.00	0.94	0.95	n/r
EMR	92.59	107.00	88.00	0.87	1.05	1.00
GILD	70.25	81.00	74.00	0.87	0.95	1.00
K	62.62	85.00	66.00	0.74	0.95	0.95
KO	56.28	59.00	64.00	0.95	0.88	1.00
PM	90.04	108.00	100.00	0.83	0.90	0.84
PNW	66.28	77.00	77.00	0.86	0.86	1.00
UL	53.25	59.00	60.00	0.90	0.89	n/r
MMM	177.10	187.00	198.00	0.95	0.89	0.90

 All of the stocks except Emerson Electric (EMR) are considered undervalued by Value Line as well as Morningstar. Dividend Radar believes Bristol-Myers (BMY) Kellogg (K) Philip Morris (PM) and 3M Corp (MMM) are all undervalued while Gilead (GILD) Coca-Cola (KO) and Pinnacle West (PNW) are at fair value. Dividend Radar and Value Line single out Bristol-Myers (BMY) as being especially undervalued, while Morningstar believes Kellogg has significant upside potential from its current share price.

From a dividend yield standpoint, Philip Morris (PM) Pinnacle West (PNW) and Gilead (GILD) all yield in the 4%-5% range. Several other names, including Bristol-Myers (BMY) Campbell Soup (CPB) Dominion Energy (D) Kellogg (K) Unilever (UL) and 3M (MMM) all offer current yields above 3.25%. Investors looking for stocks that offer a combination of value, dividend safety and above average dividend yield could incorporate the stocks mentioned here with a few higher yielding names from the first article such as AEP, LMT, MRK & VZ to create a list of blue chip names worthy of further due diligence.