.jpg)
Everybody’s seeing green these days. Markets are up, rallies are getting extended, and investors are having trouble bottom-picking due to high valuations. That doesn’t mean that everything is up, though.
Some companies still trade at fair and attractive prices - at least according to the charts. Finding them is challenging; they don’t tend to fill headlines and “top stock” articles.
Analyst ratings can be a good source of information if the stocks are worth a spot in your portfolio. The more, the better.
Then, you can use that information and select from an elite group of companies—the Dividend Aristocrats—and then apply one of the most widely used technical analysis techniques to get a shortlist of stocks trading at fair levels.
That’s exactly what I did to get a list of todays highest-rated and fairly-valued Dividend Aristocrats.
How I Screened For The Following Stocks
Screening the entire market for granular metrics can be daunting. Thankfully, Barchart offers features that make your selection and trading much easier.
Let’s take this analysis, for example. First, I start with a pre-prepared Dividend Aristocrat Watchlist. From there, I click on Screen, bringing me to the Stock Screener.
After that, I added the following filters and why:
- Current Analyst Ratings: Since we’re looking for the highest-rated and fair-valued Dividend Aristocrats, I set the values here to 4.5 and above. This means that only strong buy-rated stocks will appear in the results.
- 14-Day Relative Strength Index: The Relative Strength Index, or RSI, is a commonly used technical analysis tool for determining whether a stock is oversold or overbought relative to its 14-day average trading price. The metric is displayed from 0 to 100%; the oversold level is 30 below, while the overbought level is 70 above. In this instance, I screened for stocks trading with a less than 50% 14-day RSI. The logic here is that strong buy-rated stocks are not typically oversold. So, I did the next best thing and looked for stocks trading near their midpoint, providing a balance between highs and lows that got me fairly valued results.
With those filters, there were 4 results out of more than 60+ companies. I then arranged them from highest to lowest analyst scores.
Now, let’s talk about the highest-rated, fairly-valued Dividend Aristocrats, starting with:
Emerson Electric Company (EMR)
Emerson Electric Company, founded in 1890 and headquartered in St. Louis, Missouri, is a multinational corporation specializing in innovative technology and engineering solutions. The company operates in two segments: Automation Solutions and Commercial & Residential Solutions.
Emerson Electric has been on many of my top Dividend Aristocrats lists before—and with good reason. The company, currently rated at 4.65, is a Wall Street darling with a strong buy rating for the last three months.
Dividend-wise, EMR stock pays $0.525 quarterly, translating to $2.10 annually and a 1.95% yield.
EMR’s RSI is 45.25. Given its current chart pattern and established support, investors who want to add EMR to their portfolio might consider buying it before it breaches 50 RSI and continues its bull run.
Becton Dickinson And Company (BDX)
Becton Dickinson And Company is another frequent member of my top dividend stocks list. The company is a Dividend King and a Dividend Aristocrat, maintaining a 52-year dividend increase streak.
BD operates in the healthcare sector, providing medical devices, equipment, and chemicals for laboratories. The company pays an annual dividend of $3.80, reflecting a 1.62% yield based on current prices.
Meanwhile, BD’s 14-day RSI hovers around 47.65. This is an improvement from the stock's recent 52-week low of $224. It carved out strong support near the $230 price level, so investors might want to buy BDX stock before it breaches 50 RSI.
General Dynamics Corp (GD)
While I’ve covered General Dynamics before, this is the first time I’ve seen it on my “top dividend stocks to buy” lists in over a year. In any case, it’s a welcome surprise. The company manufactures and develops advanced business jets, command and control systems, combat vehicles, and nuclear submarines.
General Dynamics pays a $1.42 quarterly dividend, translating to a $5.68 annually and a 1.92% yield.
GD’s 14-day RSI is at 49.38. If we check its chart, the price is rising and moving sideways with a recent all-time high, while the RSI is moving down.
This may indicate a classic RSI divergence, and prices may deteriorate soon, meaning it might be better to hold for a more reliable entry point before buying the stock.
Of course, if you prefer fundamentals as the basis for trading, you might be happy to hear that GD has a 4.53 or strong buy rating from analysts.
Final Thoughts
There are always opportunities in the stock market, regardless of condition. Even in this current bull run, some stocks are trading fairly, indicating room for growth as they start catching up with the rest of the market. And with them being Dividend Aristocrats, you can at least be sure you’ll get something out of them in the long term.
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.
