New month, new list of dividend growth stocks to buy now – as we head into November!
Why do we invest into dividend stocks? Dividend stocks provides you dividend income, which is a source of passive income. This passive income stream can grow, automatically through dividend reinvestment and dividend growth, as you reach financial freedom!
Now let’s dive into the 3 undervalued dividend stocks to buy now!
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Today’s video, we showcase 3 undervalued dividend growth stocks to buy, here in November 2021.
If you are new to investing, hopefully we can be here to help teach you about dividend investing and why dividend investing could be a great option for you.
The stock market continues to set new records with the S&P 500 crossing OVER 4,600! Not only that, but the cryptocurrency market continues to search, as we saw Bitcoin and Ethereum reach new all-time highs. Bitcoin crossed $66,000 at one point and I believe Ethereum crossed $4,400. What a time to be alive! The Crypto market has taken over by storm, does cryptocurrency deserve a spot in your investment portfolio?
Therefore, as we always do, we found 3 undervalued dividend stocks to buy or add to your dividend stock watch list.
All 3 dividend stocks have average dividend growth rates of 5-7%+! In addition, each dividend stock has an above average dividend yield, which we consider being greater than the S&P 500.
How do we locate undervalued dividend stocks to buy? Easy.
We always push the dividend stocks we are considering buying through the Dividend Diplomats Stock Screener. The Screener focuses on 3 key metrics:
1.) Price to Earnings (P/E) Ratio that is less than S&P 500, preferably under 18-20x earnings
2.) Dividend Payout Ratio that is less than 60%, with 40%-60% being the perfect sweet spot
3.) Dividend Growth & Dividend Growth Rate history for the company is critical
*Bonus Metric*: The Dividend Yield is also looked at, as a bonus or cherry on top after passing the 3 metrics above.
Those 3 dividend stocks are:
1.) STORE CAPITAL (STOR): Store Capital is involved in the Single Tenant Operating Real Estate projects. In fact, Warren Buffett even invested $375 million back in 2017. If Warren Buffett owns this company, it has to be good, right? You know the phrase – Buy Like Buffett! STORE Capital is a dividend REIT and they are showing signs of undervaluation with their price to AFFO ratio, lower dividend payout ratio for a REIT and having dividend growth that’s been very consistent!
2.) CUMMINS (CMI): Cummins is a nice, boring – but sexy – dividend growth stock for your portfolio. They are as consistent, as consistent gets. Their price to earnings ratio shows signs of undervaluation vs. the S&P 500, they have a great combination of dividend growth and dividend yield. A great dividend stock to buy and hold for life!
3.) AEP (AEP): A Columbus-Ohio based utility company. Another consistent dividend growth stock, having grown their dividend for 11 consecutive years. Their recent increase to their dividend was right in line with their historical 5 year dividend yield average. Another dividend stock with metrics that compliment each other. A great dividend yield that pairs well with their dividend growth rate!
How many of these dividend stocks do you own from this list? Are you buying these dividend stocks now? Would you consider these dividend stocks to buy now?
What are other stocks are you watching or are on your radar? Do you have other stocks to invest in during the month of November 2021? Let us know in the comments! I (Lanny) owns Cummins and Store Capital, and am looking to add in the same order as you see in the video! Bert owns AEP
Again, and AS ALWAYS – THANK YOU everyone! Subscribe, like and let us know your feedback & questions below!
Lastly, we recommend conducting your own research to make your own decisions.