Top 5 Beaten-Down Dividend Stocks That Look Undervalued
BSE Sensex has run up quite a bit in recent months. After touching its all-time high of 67,619 in July 2023, it currently trades at 65,400 levels. In this bullish market, most stocks have climbed up the ladder, commanding rich valuations.
However, there are some high-dividend paying stocks available at a bargain. Undervalued stocks offer a margin of safety in their valuations. But high-dividend stocks that are undervalued can be a win-win investment.
Not only do they have the potential to grow in value over time, but they also provide a steady stream of income. It’s like a win-win situation if you play your cards right. So, with that in mind, let’s look at 5 beaten-down dividend stocks that also look undervalued at the current valuations.
At the top of our list we have Fiem Industries. Fiem is one of the leading manufacturers of automotive lighting, signalling equipment, and rear-view mirrors in India. Majority of its business comes from the two-wheeler domestic segment (95.7%).
Fiem exports automotive lighting to Honda Japan, Harley Davidson (USA & Thailand), and Kubota Japan (Tractors & Farm equipment), besides exporting to other OEMs in Austria, the UK, Germany, Thailand, Indonesia, and Vietnam. In terms of clientele, Fiem supplies all major auto clients. Over the years, the company has developed a strong client roster of more than 50 OEMs, supplying to them since their inception.
The company rewards its shareholders well, boasting an average dividend yield of over 5% in the past 5 years. Despite a long history of dividends, a leading market position, and an impressive clientele, the stock is trading close to its 5-year median Price to Earnings ratio (PE ratio) of 15.6x. At 16.6x, Fiem is only 6% away from its
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