Undervalued US stocks with increased dividends identified by Morningstar for potential investment growth.
From Morningstar: 2025-05-12 04:33:00
In 2025, dividend-paying stocks outperformed the overall market, but undervalued stocks with attractive dividends still exist. Investors can choose stocks with high yields, stable payouts, or increasing dividends. Morningstar identified seven undervalued companies that raised dividends in April, including Sysco, Portland General Electric, Johnson & Johnson, Qualcomm, Phillips 66, Sonoco Products, and Energy Transfer.
To find undervalued stocks with increased dividends, Morningstar screened US companies that raised dividends by 2% or more in April. Only companies rated 4 or 5 stars were considered. Seven companies passed the screen, offering potential for increased dividend yields and investment value growth. Sysco, Portland General Electric, Johnson & Johnson, Qualcomm, Phillips 66, Sonoco Products, and Energy Transfer met the criteria.
Morningstar analysts view Sysco’s consistent dividend growth positively, forecasting a 5% annual increase over the next five years. Portland General Electric’s off-cycle dividend raise raised concerns initially, but the decision was in line with estimates. Johnson & Johnson’s long history of dividend increases inspires confidence, while Qualcomm’s shareholder cash returns strategy is solid. Phillips 66’s transparent shareholder policy balances payouts with market conditions, and Sonoco’s commitment to returning cash to shareholders is steady. Energy Transfer’s resistance to converting to a C-Corporation could benefit investors in the long run. 1. The stock market saw a significant increase today, with the S&P 500 reaching a new record high. The Dow Jones Industrial Average also saw gains, closing at over 35,000 points for the first time.
2. In other news, the unemployment rate has dropped to 5.4%, the lowest it has been since the start of the pandemic. This is a positive sign for the economy as more people return to work.
3. The housing market continues to boom, with home prices rising by 17% compared to last year. This surge in prices is attributed to low mortgage rates and high demand for homes in desirable locations.
4. On the international front, tensions are mounting between the US and China over trade issues. The US has imposed new tariffs on Chinese goods, sparking concerns of a trade war between the two economic giants.
5. Lastly, the latest data shows that consumer spending has increased by 2.4% in the past month, indicating a strong recovery in the retail sector. This is a positive sign for businesses as they continue to bounce back from the pandemic’s impact.
Read more at Morningstar: 7 Undervalued US Stocks that Just Raised Dividends