10 Bargain Dividend Stocks Ready to Shine in a Falling-Interest-Rate Environment

With a Fed rate cut all but certain, dividend stocks are back in focus.
Lower yields on cash and bonds are boosting demand for high-dividend equities.
These 10 undervalued US stocks combine income with upside—just as Q3 earnings loom.
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While the market is currently focused on the China–US trade war and its many twists and turns, US monetary policy is about to make its big comeback, with a scheduled for next Wednesday, and a rate cut widely anticipated.

The Investing.com’s Fed Rate Monitor Tool shows a probability of over 98% for this scenario, and another rate cut is scheduled for December with a similar level of certainty.

By making credit cheaper, rate cuts are fundamentally bullish for the economy and the markets, and could help the stock markets post a solid end to the year—especially as the positive seasonality of Q4 also works in buyers’ favor.

However, rate cuts benefit some types of stock more than others. Dividend stocks, for example, often experience a surge in demand when rates fall, as investors looking for passive income are more willing to take “risks” on dividend stocks when rates on bond and money-market investments are cut to the bone.

What’s more, despite recent market records, the macroeconomic environment remains rather uncertain, which also justifies an interest in dividend stocks—often boasting stronger-than-average financials and a more stable shareholder base.

These 10 US Stocks Combine High Dividends With Strong Upside Potential

With the help of Investing.com’s screener, we set out to find quality US dividend stocks that are undervalued and therefore offer strong upside potential in addition to solid dividends.

Specifically, we launched a search based on the following criteria:

ATTENTION: Although the basic functions of the Investing.com screener are available to all free of charge, some of the criteria used here are reserved for InvestingPro and Pro+ subscribers.

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Dividend yields of at least 5% ensure immediate and substantial passive income, while dividend growth rates over 3 and 5 years allow us to target companies with steadily increasing payouts. A Fair Value upside potential of at least 20% allows us to target stocks that are currently trading well below their theoretical fundamental value. In fact, InvestingPro Fair Value calculates an intelligent average of several recognized valuation models for each stock.

Here are the 10 stocks we were able to identify using these criteria:

In addition to paying dividends corresponding to annual yields of 5% to 11.9%, these stocks are undervalued by 21.6% to 36.7%.

What’s more, none of these stocks has yet published its Q3 results, which will be released in the next three weeks. This could be the occasion for a strong rally in some of these stocks, which have a habit of far exceeding analysts’ forecasts, as further analysis has shown.

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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.