Everything that goes up must come down. News of slowing U.S. economic growth and an overextended bull market has led to indices plunging in August. As usual, investors are racing for the exits, triggering massive sell-offs and dropping share prices worldwide, starting with the Nikkei on Aug 5, 2024.
While we may have increased volatility, some investors might be inclined to look for good companies to buy instead. Bargain stocks are unusually easy to find now, even better if they pay dividends.
That’s exactly what I'll cover today: the best dividend stocks you can buy at a discount.
How I Screened For The Following Stocks
Using Barchart’s Stock Screener tool, I entered the following filters to get my preferred results:
- Short-term Opinion %: Set to Buy. Exclusive to Barchart, the Opinion filters use technical analysis to review stocks according to their short-, medium-, and long-term potential, as well as their direction and strength. With this filter, I’ve limited the results to only companies with technical buy ratings over the short term.
- Percent from Low: Set to within 30% of its 52-week (1-year) low.
- Market Cap: Set to $10 billion and above.
- Annual Dividend Yield (%): Set to 0.01% and above. I’m using the filter to ensure I only get dividend-paying stocks on the results.
- Current Analyst Ratings: Set to 4.5 to 5, or strong buy-rated stocks only.
- Number of Analysts: Set to 12 or more.
Once I clicked “See Results,” this list was populated, which I then arranged from highest to lowest based on dividend yields.
So far, I like the list, especially the first four or five names. Many of those are recognizable, some of which I’ve already written about in my many dividend stock articles.
However, you may have noticed that two of the three stocks belong to the same industry: Oil and Gas. Since we might be facing a near-term correction, I think it’s a good idea to diversify the picks as a defensive mechanism.
So, I acknowledge that ET, EPD, and VICI are the top three high-dividend stocks on the screen, however, to diversify, I'll skip EPD, FANG, and REG. I'll also skip BABA from the list, as it just started paying dividends.
So, without further ado, let’s start with the highest-yielding dividend stock on the list:
Energy Transfer (ET)
Energy Transfer is a well-known midstream energy company that connects producers to consumers. The company provides storage and transportation for oil, natural gas, and other products. ET has a current market cap of $53.8 billion.
The stock has been trading in a narrow pattern, and its current trading price is 23.84% above its 52-week low of $12.46 on August 15, 2023. As you can see in the chart, ET took quite a hit these past few trading sessions. However, based on its consensus 4.80 strong buy rating, fifteen analysts still consider Energy Transfer a good investment on average.
In terms of dividends, the company just announced a 32-cent quarterly payout or $1.28 annually. This reflects a more-than-decent 8.30% yield based on current prices. It also has a short-term buy rating based on Barchart Opinion.
VICI Properties (VICI)
VICI Properties considers itself an “experiential investment,” and a quick look at its portfolio makes that statement evident. VICI is a real estate investment trust (REIT) that primarily invests in gaming, entertainment, and hospitality properties. Some of its biggest assets are on the Las Vegas Strip, like the MGM Grand and Ceasars Palace. The company has a market cap of $32.9 billion and is 15.53% away from its 52-week low.
According to its latest announcement, VICI stock pays 41.5 cents quarterly, totaling $1.66 annually. This represents a 5.4% yield based on current prices.
Meanwhile, 21 analysts give VICI stock a strong buy rating, with a 4.67 average score and a high target price of $43. It’s worth noting that VICI has maintained its strong buy rating for at least three months, showing how much of a solid dividend investment it is.
Home Depot (HD)
Home Depot is one of the—if not the—biggest hardware and home improvement retailers in the world, with over 2,300 stores across the U.S., Canada, and Mexico. It has a market cap of $353.4 billion—the largest on this list.
The company has an extensive dividend payment history; its latest payout, $2.25 per quarter - or $9 per year, translates to a 2.57% yield. It is not as high as the first two on the list, but it is decent nonetheless.
Furthermore, analysts are optimistic about the stock, with 30 giving it an average of 4.50 or a strong buy rating. HD stock is also trading 27.62% away from its 52-week low, which might give investors a chance to snag shares at a discount before things kick off again.
Final Thoughts
Sell-offs aren’t the end of the world. Prudent investors should instead watch out for buying opportunities, and these three dividend stocks present plenty of ways to earn money. If the three diversified choices don’t work for you, you can check the other results to see if they better fit your investment strategies.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
