10 Best Undervalued Dividend Stocks to Buy Amid Shifting Fed Rate Outlook

investing.com:

U.S. stock indexes have been rattled in recent sessions as investors raised their bets the Federal Reserve will have to maintain its aggressive monetary tightening campaign for longer than currently expected to prevent a flare-up in inflation.

The blue-chip Dow Jones Industrial Average, the benchmark S&P 500, and the tech-heavy Nasdaq Composite are all down at least 4% so far in August.

As we grapple with fresh uncertainty surrounding the Fed's rate plans, identifying undervalued stocks becomes paramount as investors find themselves seeking stability and potential opportunities.

Amid the current backdrop, I used the InvestingPro stock screener to identify the best undervalued stocks that have the potential to weather market turbulence and provide attractive investment returns.

I first scanned for stocks with a dividend payout yield of 3% or above and a dividend growth streak of at least ten years.

I then filtered for companies with an InvestingPro Overall Health Score greater than or equal to 2.75. It should be noted that companies with InvestingPro health scores higher than 2.75 have consistently outperformed the broader market by a wide margin over the past seven years, dating back to 2016.

I then searched for names with an InvestingPro ‘Fair Value’ Label of ‘Bargain,’ ‘Undervalued,’ and ‘Fair.’ And those companies with a market cap of $20 billion and above made my watchlist.

Once the criteria were applied, I was left with a total of 11 companies, of which we picked the top 10. These stocks all offer compelling valuations, strong fundamentals, and the potential for long-term growth, providing investors with a diversified selection to consider during uncertain times.

Let's take a look at each one of them to understand