3 Oversold Dividend Aristocrats Wall Street Says Are Ready to Rally
Thanks to improving geopolitical sentiment, the markets are breathing some fresh green air—and that means some investors try to time the market and race to buy. Elevated trade volumes can mean higher stock prices, which can be difficult for the smart money to justify.
However, not every dividend stock has bounced back. Some are still trading at oversold or near-oversold prices while maintaining positive upward momentum with room for growth. Finding quality names, such as companies on the Dividend Aristocrats list, can be a smart way to build long-term wealth and steady returns.
So, today, let's look at oversold, Wall-Street-approved Dividend Aristocrats on a potential uptrend.
How I Came Up With The Following Oversold Dividend Aristocrats
With Barchart's Stock Screener, I screened for stocks on the Dividend Aristocrats list using the following filters:
100-200D MA Cross Signal: Buy. This filter looks for stocks with their 100-day moving average (MA100) above their 200-day moving average (MA200). This crossover is considered a strong bullish signal, indicating that the stock's medium-term momentum is shifting upwards and potentially entering or continuing a long-term uptrend.
Overall Buy/Sell/Hold Signal: Buy. This filter takes all Barchart Opinion indicators and gives an overall rating based on 13 popular analytics in short-, medium- and long-term periods.
Current Analyst Rating: 4 (Moderate Buy) to 5 (Strong Buy).
14-Day Relative Strength Index: Left blank. This filter maps out the stock's price movement on a 100-point scale based on the last 14 days of trading, with 80 and above being the overbought level and 30 and below oversold.
Watchlists: Aristocrats.
With these filters in place, I ran the screen and got seven results:
Then, I arranged the results based on the lowest to highest 14-day RSI. The combination of the 100-200 MA Cross Signal, the overall buy rating based on Barchart Opinion and Wall Street, and the relatively low RSI (below 50) may suggest that the stock has just bounced from a downtrend and is starting an upward trend.
Furthermore, I'll limit the results to stocks currently trading above their 100-MA line, which thankfully applies to all top three companies. Now, let's discuss each, starting with the one with the lowest 14-day RSI.
Coca-Cola Company (KO)
Pretty much everyone knows about the Coca-Cola Company. In terms of market cap, it's considered the largest beverage company on Earth. The giant reaches more than 200 countries with 2.2 billion daily drink sales. Currently, Coca-Cola has hundreds of bottling partners across 950 production facilities worldwide. It's also one of the most popular dividend stocks, being a member of the Dividend Aristocrats, Kings, and Zombie dividend lists, and is generally considered a cornerstone income investment due to its non-cyclical products.
Coke pays a $0.51 per quarter dividend, which translates to a forward yield of around 2.8%. Certainly not the highest there is, but Coca-Cola offers stable income - which is what long-term investors want.
After staying below the 200-day MA line for a couple of months, KO's 100-day MA line has finally crossed above, marking a potential jumping point for a longer uptrend.
Abbott Laboratories (ABT)
Next on the list is Abbott Laboratories, another well-known dividend stock. The company develops, produces, and markets healthcare products ranging from medical devices to brand medicines and nutritional products. As of now, Abbott has increased its dividends for 53 consecutive years.
Abbott currently pays $2.36 annually, which reflects around a 1.7% yield. Analysts give ABT stock a strong buy rating.
Up about 17.5% YTD, ABT stock is also doing well, though we saw some of the same price drops during tariff announcements. However, it's still trading above its 100-day MA and has shown signs of recovery, which suggests further upward momentum.
McDonald's Corp (MCD)
Last on this list is McDonald's Corporation, another global brand with a dominant presence in the fast food industry. Contrary to popular belief, McDonald's doesn't just operate as a franchise fast food join - it's also a real estate business. The company owns a sizable portion of its land and buildings, which serves as an excellent source of revenue. Combined with its business in the consumer staples sector, MCD stock is one of the more recession-proof investments available.
The company pays a $1.77 quarterly dividend, which translates to $7.08 annually and around a 2.2% yield.
MCD stock's price is also above its 100-day MA, though its 200-day MA is closing in. This can suggest a sign of potential weakness in the price action, especially when considering its mostly sideways pattern as of late, so investors will want to watch out for further downward pressure or increased selling volume.
Final Thoughts
These oversold Dividend Aristocrats offer the opportunity to buy quality stocks at low prices and benefit from their anticipated upward climb. However, nothing stays still in the stock market. Particularly, values like the 14-day RSI can change drastically in one trading session. So it's essential always to monitor your investments and do your due diligence before buying anything.
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