List of Undervalued Dividend Stocks (December 24) 🔥

These stocks are undervalued 📊

At the end of every month, I send out a spreadsheet that lists out the dividend stocks that I believe to be undervalued.

This is the end result of 100’s of hours of research every month.

If you’d like to receive it, consider becoming a paid member.

Now, let’s dive in.

LKE ALWAYS… Before we even begin to look at the stocks listed on the spreadsheet, it’s important we understand a few important points.

I almost always discuss these points in my paid newsletters, but it’s important we revisit them for newcomers and as a reminder to ourselves.

1. Just because a stock is undervalued, does not mean you should buy it.

I research dividend stocks for hours on a daily basis. Just because I find one that is undervalued, does not mean it’s a good fit for my portfolio.

For example, around 3 months ago I made a video on Verizon, and found that they were slightly undervalued at the time.

Despite this, I did not add them to my portfolio. I am personally looking for stocks that I believe will be compounding machines for years, and I don’t believe Verizon falls into that category.

2. What’s considered a good buy for one person, may be a bad buy for another person.

If you are someone close to living off dividends or are simply looking to maximize dividend income long term, then it’s likely that you wouldn’t want to buy a stock with a low starting yield, even if it was undervalued.

For example, I added shares of LVMHF (Louis Vuitton) to my portfolio recently. I believe in their ability to generate growing free cash flow in the coming years and grow dividend payments over time.

But their starting yield is low.

So even if it was undervalued, if you are looking for immediate dividend income, this would not be a good buy.

3. Understand what Time Risk is.

Time risk is the risk associated with the length of time it takes for an investment to reach its desired outcome.

In the context of waiting for stocks to reach intrinsic value, time risk arises from the uncertainty regarding the duration it will take for the market to recognize and reflect the true value of the stock. During this waiting period, investors are exposed to the possibility of missed opportunities, changes in investment goals, or unforeseen events that could affect the investment's performance.

For example, the time between when Michael Burry placed his short on the mortgage bond market and the time it took it to payoff was time risk.

Basically, it can take time for a stock to revert to intrinsic value.

4. The Market Moves in Cycles

It can be amazing how fast things change.

Opportunities come and go fast.

For a moment in the market, there may be abundant opportunities (like in 2022).

The market was down, and valuations for dividend stocks were looking great.

The market undoubtedly moves in cycles, and it’s important to be prepared when those opportunities occur.

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With all this being said-

There’s no doubt market valuation right now are high. Opportunities are limited.

Despite this, I’ve still been able to spot some mis-pricings within the market.

To start off we removed 3 stocks from our list this month: CVX, HUM, and ATD. Thes companies were up over 5%, 14%, and 15% in the last month, pushing their valuations higher.

Now, let’s look at our list: