After Wednesday’s painful market sell-off, investors seeking value and bountiful dividend stocks may have more of a chance to pounce. Indeed, the broader market indices are fresh off their worst day since 2022. At this juncture, it’s okay to be slightly rattled as you look to reposition ahead of a choppy move into mid- and late-summer.
Undoubtedly, some of the “safest” dividend value plays could not avoid damage from the violent mid-week reversal. And come to the next market-wide correction (the Nasdaq 100 is another ugly down day after one), investors should expect that only a few names will be spared from the carnage.
The following three dividend stocks may take less of a hit than the high-tech names, falling faster than the broader markets. Look at a trio of low-cost dividend stocks that finished Wednesday in the green.
AT&T (T)
AT&T (NYSE:T) was up in the green by more than 5% as the rest of the market fell into a sea of red, thanks to a solid quarter that saw net phone subscribers rise ahead of expectations.
Undoubtedly, T stock has been a long-time underperformer in the past decade, so any sudden bursts of brilliance will be a breath of fresh air for T shareholders. Investors should expect more market days like Wednesday, a day that saw the biggest winners become the losers and vice versa.
In any case, AT&T stock hasn’t been a complete laggard, especially of late. Year to date, T stock is up more than 11%. That’s still less than the S&P 500, even after the latest sell-off, but still remarkable for AT&T’s standards, especially given how long it’s been a perennial underperformer.
With a 10.3 times trailing price-to-earnings (P/E) multiple, a whopping 6.1% dividend yield and a 0.72 beta, AT&T could be a great hideout for investors who fear the market is turning.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) also had the rest of the market green with envy on Wednesday, as shares rose 4.6%. A solid second-quarter showing helped NEE stock buck the trend. As one of the most intriguing dividend-paying (2.9% yield at writing) green energy plays in the market, perhaps investors seeking relative stability should look to the name as it looks to sustain gains in the face of an ugly turn for markets.
Just a few weeks ago, Morgan Stanley (NYSE:MS) analyst Andrew Percoco pounded the table on NextEra stock and other renewable firms, noting that a “full-scale” repeal of the Inflation Reduction Act was not likely even if Republicans were to win the White House and that “demand for renewables” was likely to stay robust, regardless of who wins the election and what’s to happen with renewable tax credits.
I couldn’t agree more. NextEra has what it takes to keep powering ahead over time, even if the next president isn’t nearly as kind to the clean energy firms. Further, NextEra CEO John Ketchum sees renewable energy demand tripling in the next seven years as more data centers come online.
Seagate Technology (STX)
Like the other two outperformers on this list, Seagate Technology (NASDAQ:STX) clocked in a solid quarter that helped it rise on one of the biggest down days for markets in recent memory. Undoubtedly, the data storage firm is a great value-conscious way to bet on the AI boom, which likely still has legs despite having the AI trade run into a brick wall on Wednesday.
Hats off to Wedbush Securities analyst Matt Bryson, who hiked his STX stock price target to $130 from $100 ahead of the number. Bryson noted a “significant fundamental shift” in the last quarter. Indeed, the shift carried over into Q2 in a big way, as Seagate’s sales and margins improved on the back of recovering demand for storage products.
As the cyclical upswing continues, it’s hard to justify taking profits in STX, especially as its HAMR (heat-assisted magnetic recording) drive looks to pick up momentum in the second half.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.