Stock Market Predictions 2024:  List of Dividend-Growth Stocks That Are Undervalued

In the face of the market’s unpredictable tumult, dividend stocks have proven to be a sanctuary for investors, offering a blend of regular payouts and the potential for capital growth and probably one of the best stock market predictions 2024. The allure of companies that escalate their dividends over time lies not only in the increased income but also in the underlying financial stability often exhibited by such firms. As a rule of thumb, an undervalued stock often holds the promise of appreciating in value during the holding period.

Given these considerations, investment research firm Morningstar has recently produced a curated list of stocks – a blend of recently increased dividends and undervalued status based on their fair value estimates. Starting with 672 dividend-paying stocks under their coverage, the firm whittled the list down, filtering for companies that raised their dividends by at least 2% from July to November and excluding those with yields under 2%.

Four stocks eventually emerged as substantially undervalued according to Morningstar’s criteria. 

First up is Evergy (EVRG), a utility provider that serves Kansas and Missouri. With a fair value estimate of $65 and a recent closing price of $51.85, Evergy also boasts a forward dividend yield of 4.99% and a recent dividend increase of 4.9%. Evergy is in a phase of improving its traditionally challenging regulation while investing in clean energy, a move expected to allow the dividend to grow in line with earnings in the coming years.

Huntington Ingalls Industries (HII), a military shipbuilder, is another noteworthy pick. With a forward dividend yield of 2.04% and a recent dividend increase of 4.8%, the company’s stock closed recently at $257.10, significantly below Morningstar’s fair value estimate of $285. The firm’s revenue generation capability stands out as it is involved in almost every significant military shipbuilding contract, often as the sole supplier, rendering its top line less susceptible to shifts in the defence budget.

The third standout is Regency Centers (REG), the country’s largest shopping center real estate investment trust (REIT). Despite a closing at $66.40, Morningstar’s fair value estimate is $76. Benefiting from high-quality assets in affluent, densely-populated markets, Regency offers a forward dividend yield of 4.02% and a recent dividend increase of 3.1%.Lastly, Tyson Foods (TSN), a poultry/meat producer, makes the list with its forward dividend yield of 3.79% and a recent dividend increase of 2.1%. Although Tyson’s financial health has waned in the face of challenging protein markets, a recovery is expected, making its recent closing price of $51.80 look undervalued compared to Morningstar’s fair value estimate of $82. According to Morningstar’s analysis, these four stocks represent undervalued options for investors seeking stable dividends and potential capital appreciation for positive stock market predictions 2024.