KEY POINTS: CHEAP DIVIDEND STOCKS TO BUY IN MARCH
- Pfizer could be an even better value than it seems for this reason.
- Verizon has an uncommonly high dividend yield and great long-term growth drivers.
- Viatris is ridiculously cheap and a potential refuge for investors if the market worsens.
The options when it comes to dividend stocks? Better, faster, cheaper. Between a strong dividend yield (better), good odds of share price appreciation (faster), and a desirable valuation (cheaper), we usually only find stocks with two on three. That isn’t always the case, though. Here are three dirt-cheap dividend stocks to buy in March, that fulfill all three criteria.
There’s no question that Pfizer (NYSE:PFE) has a juicy dividend. The company’s dividend yield is currently 3.5%. The firm has enough cash flow to continue raising the dividend in the future.
Is the pharmaceutical stock actually a bargain? Pfizer’s shares sell for only 7.5 times anticipated earnings, which is a fraction of the S&P 500‘s forward earnings multiple of 19.7.
After 2022, Pfizer’s COVID-19 vaccine sales will be unknown. Thus, some may question the validity of looking only out one year. However, using five-year growth expectations, the stock’s price-to-earnings-to-growth (PEG) ratio is just under 1.0, suggesting a very attractive valuation for a mature company like Pfizer.
Analysts on Wall Street are more bullish in their forecasts for Pfizer’s share price appreciation. The average analyst prediction of the stock’s 12-month price target is around 30%, implying a significant upside potential.
Pfizer’s growth prospects might be even brighter than the firm is letting on. Its 2022 guidance predicts COVID-19 pill sales of $22 billion, but there are several reasons to believe that the true total will be far greater.
Verizon Communications (NYSE:VZ) has long been highly regarded by income investors. For the majority of the 21st century, the dividend yield of Verizon Communications has topped 4%. The current dividend yield for Verizon Communications is 4.8%.
Verizon’s stock is also reasonably priced. Its shares are sold at the discount price of less than ten times anticipated earnings. The stock’s EV is less than 8.2 times EBITDA, which is based on enterprise value (EV).
What about stock price appreciation? Wall Street’s expectations for Verizon’s share price in 12 months are nearly 13% above the current share value.
Verizon’s longer-term prospects look promising. The telecom company should benefit from increased 5G adoption and home internet use over the coming years. Thus, providing a number of long-term growth drivers for the stock.
Viatris’ (NASDAQ:VTRS) dividend yields close to 3.4%. The firm, which sells generic medicines and biosimilars, has only paid a dividend for less than nine months. Viatris, on the other hand, has a long track record of payouts. It was created in 2020 as a result of a merger between Pfizer’s Upjohn division and Mylan.
Viatris has been on lists of top value stocks to buy right now, which makes complete sense. Shares trade at only 3.9 times expected earnings and 0.94 times trailing 12-month sales.
Viatris’ stock performance, granted, has been unimpressive. The company’s shares dropped 28% in 2021 while the overall market had strong gains. However, so far in 2022, Viatris is comfortably outperforming the market. Analysts at Wall Street are also expecting good things for Viatris, with a consensus 12-month price target implying an upside potential of almost 40%.
Viatris is not a high-yielding stock that will produce jaw-dropping returns in the long term. However, moderate growth and excellent dividends should be attainable. Viatris could be a safe haven for investors if there’s an extended stock market downturn due to its dirt-cheap valuation and steady operations.
If the options are better, faster, cheaper, we’ve got them covered with good cheap dividend stocks this March. These three dirt-cheap dividend stocks fulfill all three criteria for March investing.