Investing

5 Recently Beaten Down Dividend Stocks With Upside Potential

Lee Jackson

Published: March 20, 2024 9:20 am

Investors love dividend stocks because they provide dependable income and a great opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation.

At 247 Wall St., we always remind our readers about the impact total return has on portfolios because it is one of the best ways to improve the chances of overall investing success. Again, total return is the combined increase in a stock’s value plus dividends. 

We decided to screen our dividend stock research universe, looking for top dividend-paying stocks that have ended up in the bargain bin for various reasons. As most investors know all too well, when companies hit a rough spot, the old adage of “shoot first and ask questions later” often applies.

We found five well-known and, in some cases, industry leaders’ stocks. These stocks have been hit hard and offer patient investors an outstanding entry point. While they may not bounce back overnight, their dividends help investors wait for a turnaround. All are Buy-rated on Wall Street.

Cisco

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This mega-cap tech leader for more conservative accounts recently made a substantial big data play and paid a solid 3.27% dividend. Cisco Systems, Inc. (NASDAQ: CSCO) designs, manufactures, and sells Internet Protocol (IP)- based networking products and services to the communications and information technology industry worldwide.

The company offers a switching portfolio that encompasses campus switching as well as data center switching;

• Enterprise routing portfolio interconnects public and private wireline and mobile networks
• Delivering highly secure and reliable connectivity to campus, data center, and branch networks;
• Wireless products include wireless access points and controllers and a compute portfolio, including the Cisco unified computing system, hyperflex
• Software management capabilities combine computing, networking, storage infrastructure management and virtualization.

In addition, it provides Internet for future products consisting of:

• Routed optical networking, 5G, silicon, and optics solutions
• Collaboration products, such as meetings, collaboration devices, calling, contact centers, and communication platforms as a service
• End-to-end security product consists of network security, cloud security, security endpoints, unified threat management
• Zero trust and optimized application experience products including full-stack observability and network assurance

Further, the company offers its customers a range of service and support options, including technical support, advanced services, and advisory services.

Cisco recently completed a massive $28 billion purchase of big-data giant Splunk, its largest acquisition ever. Some on Wall Street feel the company overpaid, but many like the addition as it broadens its portfolio. Splunk laid off 7% of its workforce late last year.

FMC

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This top stock has been cut in half and offers shareholders a solid 3.57% dividend. FMC Corporation (NYSE: FMC)is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products.

It develops, markets, and sells crop protection chemicals that include:

• Insecticides, herbicides, and fungicides; and biologicals, crop nutrition
• Seed treatment products are used in agriculture to enhance crop yield and quality by controlling various insects, weeds, and diseases, as well as in non-agricultural markets for pest control.

The company markets its products through its sales organization, alliance partners, independent distributors, and sales representatives.

It operates in:

• North America
• Latin America
• Europe
• the Middle East
• Africa
• Asia.

The company was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.

Intel

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This semiconductor legacy leader has been hammered, and the dividend has been cut by 65% to 1.17%. Intel Corp. (NASDAQ: INTC) designs, manufactures, and sells integrated digital technology platforms worldwide.

It operates through these segments:

• Client Computing Group
• Data Center Group
• Internet of Things Group
• Software and Services
• All Other segment

The company’s platforms are used in various computing applications comprising:

• Notebooks
• 2 1 systems
• Desktops
• Servers
• Tablets
• Smartphones
• Wireless and wired connectivity products
• Wearables
• Retail devices, and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use, and other market segment

Over two years ago, the company announced it would invest massively to build potentially the world’s largest chip-making complex in Ohio. Intel is looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to cars. Intel has postponed the completion date to late 2026, blaming semiconductor weakness and delays in CHIPS Act subsidies.

Intel’s portfolio of AI-enabling hardware and software – from CPUs, GPUs, and accelerators to the oneAPI programming model, OpenVINO developer toolkit, and libraries that empower the AI ecosystem – provides competitive, high-performance, open-standards solutions for customers to deploy AI at scale quickly.

NextEra Energy

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This top utility has been mauled but pays a solid 7.53% dividend based on the first quarter payout. NextEra Energy, Inc. (NYSE: NEE) generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America through its subsidiaries.

The company generates electricity through:

•  wind,
• solar,
• nuclear,
• natural gas, and other clean energy.

It also develops, constructs, and operates long-term contracted assets that consist of:

• Clean energy solutions, such as renewable generation facilities
• Battery storage projects, and electric transmission facilities;
• Sells energy commodities
• Owns, develops, constructs, manages, and operates electric generation facilities in wholesale energy markets

The company has approximately 33,276 megawatts of net generating capacity, approximately 90,000 circuit miles of transmission and distribution lines, and 883 substations.

It serves approximately 12 million people through approximately 5.9 million customer accounts in Florida’s east and lower west coasts.

Walgreens Boots Alliance

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This huge drugstore chain is a safe retail play for investors. Although Walgreens Boots Alliance (NYSE: WBA) lowered its dividend in January, it is still a healthy 4.80%. Walgreens Boots Alliance NYSE: WBA) is a pharmacy-led health and beauty retail company.

It operates through three segments:

• Retail Pharmacy USA
• Retail Pharmacy International
• Pharmaceutical Wholesale

The Retail Pharmacy USA segment sells prescription drugs and various retail products, including health, wellness, beauty, personal care, consumables, and general merchandise, through its retail drugstores.

It also provides specialty pharmacy and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies.

The Retail Pharmacy International segment sells prescription drugs, health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application.

This segment operated 4,428 retail stores under the Boots, Benavides, and Ahumada in:

• United Kingdom
• Thailand
• Norway
• the Republic of Ireland
• the Netherlands
• Mexico
• Chile

The company also has 550 optical practices, including 165 on a franchise basis.

The Pharmaceutical Wholesale segment engages in the wholesale and distribution of specialty and generic pharmaceuticals, health and beauty products, and home healthcare supplies and equipment, as well as provides related services to pharmacies and other healthcare providers.