Dividend Aristocrats, identified by Morningstar, boast a 'castle' defensive moat and are believed to be unfairly undervalued in the market
Two Undervalued Dividend Aristocrat Stocks Recommended by Morningstar
In a recent analysis, financial research firm Morningstar has identified two dividend stocks as aristocrats and undervalued: Chevron and Becton Dickinson. These stocks are considered strong picks for value investors due to their long-term competitive advantages, or "moats," and their current trading below Morningstar's fair value estimates.
Chevron: A Strong Position in the Oil and Gas Sector
Chevron, the second-largest oil company in the U.S., is recognized as a dividend aristocrat for its consistent dividend increases and strong competitive position in the oil and gas sector. Morningstar highlights Chevron as an undervalued dividend stock with a moat status, reflecting its strong competitive position. The stock is trading below Morningstar’s fair value estimate of $176, offering a potential upside of 17%.
Becton Dickinson: A Leading Player in the Medical-Surgical Industry
Becton Dickinson, a major medical technology company, is also identified as a dividend aristocrat with an economic moat. It has consistently raised dividends for over 25 years, underpinning its dividend safety and long-term competitive advantage. Morningstar’s research includes Becton Dickinson among recommended undervalued dividend aristocrats, although specific details about its moat or potential upside are not provided in the given text.
The Becton Dickinson stock currently trades at around $325, and it has a dividend yield of 1.58%. Susan Dziubinski, an expert at Morningstar, states that dividend aristocrats with moats are less likely to cut their dividends. However, no specific details about Becton Dickinson's history of increasing dividends for at least 25 years are provided in the given text.
Becton Dickinson is the world's largest manufacturer and distributor of medical-surgical products, but it does not appear to have a specific technological advantage, strong pricing power, patents, or an advanced supply chain that competitors lack, unlike Chevron.
A Potential Breakout for Becton Dickinson
Recently, Becton Dickinson underwent a consolidation and could break out again by overcoming the 200-day line. The potential upside for Becton Dickinson is 35%, according to Morningstar.
In summary, Chevron (energy sector) and Becton Dickinson (healthcare sector) stand out as two undervalued, moat-protected dividend aristocrats that Morningstar recommends buying within the current U.S. market environment. Investors seeking value and dividend growth may find these stocks appealing.
- Investors looking for value and dividend growth might find both Chevron and Becton Dickinson appealing, given they are undervalued dividend aristocrat stocks recommended by Morningstar.
- Chevron, a divinity aristocrat in the oil and gas sector, may offer a potential upside of 17% as it trades below Morningstar's fair value estimate of $176, while Becton Dickinson, a major player in the medical-surgical industry, could provide a potential upside of 35%, according to Morningstar.
