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7 High-Yield And High-Growth Undervalued Dividend Stocks To Buy Now

Published Tue, 27 Oct 2020 12:32:43 -0400 on Seeking Alpha

Seeking AlphaDividend Quick Picks7 High-Yield And High-Growth Undervalued Dividend Stocks To Buy NowOct. 27, 2020 12:32 PM ET|| Includes: ABBV, AVGO, BAC, CCOI, ENB, GBX, HD, IBM, JPM, PRU, SPY, TRN, TXN, YORWby: Robert & Sam KovacsRobert & Sam Kovacs Long Only, Dividend Investing, Dividend Growth InvestingOur Free Dividend Portfolio Tracker.cls-1{fill:#024999;}SummaryIt is the combination of dividend yield and dividend growth which creates the magic of dividend investing.
Combining high yield and high growth can have dramatic impacts on your income.
I highlight 7 high quality picks with both high yields and high dividend growth.
Written by Sam Kovacs
About a month ago, I published a list of 5 high dividend growth stocks which dividend investors should consider.
I made the case that dividend yield and dividend growth shouldn’t be considered in isolation, but only relative to one another.
Source: Open Domain
After all, while a 4% yield is good, is it really great if there is no dividend growth?
In a similar way, is dividend growth of 15% worth getting excited if the stock yields less than 1%?
The answer to both those questions is no.
Dividend yield matters. It is the base income which you’ll see grow in upcoming years.
Dividend growth matters. It is the magic which makes dividend investing so attractive.
A low yield high growth example
Consider the following.
If we take a low yielding, high dividend growth stock, like Home Depot (HD).
The stock yields 2.1%. Last year, the company grew the dividend by 10%, although the company averaged 20% growth for the past 5 years.
Let’s assume HD grows the dividend at 12% per annum for the next 10 years. You invest $10K in HD, and reinvest the dividends once a year, at the same yield.

Source: mad-dividends.com
In 10 years, you could expect to receive $787 in dividends, of which $135 will come from having reinvested dividends.
Not... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ENBRIDGE 34.70   19.7 1.76 2.21 6.38
ABBVIE 70.83   26.0 2.72 4.28 6.28
PRUDENTIAL FINANCIAL 88.22   9.0 9.82 4.00 4.61
IBM 143.62   14.8 9.68 6.48 4.47
COGENT COMMUNICATIONS GROUP 58.84   84.1 0.70 2.48 4.20
AVAGO TECHNOLOGIES 300.58   37.1 8.11 10.60 3.60
TRINITY INDUSTRIES 19.98   22.4 0.89 0.68 3.46
JPMORGAN CHASE 117.91   12.0 9.79 3.60 2.74
BANK OF AMERICA 29.67   10.6 2.80 0.72 2.45
TEXAS INSTRUMENTS 130.22   23.8 5.47 3.08 2.42
HOME DEPOT 233.80   23.3 10.04 5.44 2.33
YORK WATER 39.07   36.2 1.08 0.69 1.84
SPDR S&P 500 ETF 301.29   0.0 0.00 5.42 1.82


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