Are you looking for some quality dividend stocks to buy right now? When it comes to investing, it's often a good idea to check out those that haven't been doing too well lately and are trading near their lows. If the businesses are in good shape, that can make for great buying opportunities because when stock prices are down, that means yields are up.
Three dividend stocks that have underperformed the S&P 500 this year and are trading near their lows are AbbVie (ABBV 0.67%), ExxonMobil (XOM 0.21%), and Cisco Systems (CSCO 0.28%). Here's a look at why you should consider adding these stocks to your portfolio today.
1. AbbVie
Pharmaceutical maker AbbVie is known for being a solid dividend stock. Dating back to when it was part of Abbott Laboratories, the company's streak of increasing dividends spans more than 50 consecutive years, making it a Dividend King. Even better, this is also a high-yielding stock that pays 4.3%, which is well above the S&P 500 average of 1.5%.
This year, however, hasn't been a great one for AbbVie with its shares down 11%. The healthcare stock is trading just 10% away from its 52-week low of $130.96. Granted, there isn't a whole lot of volatility when it comes to AbbVie, as it averages a beta of less than 0.5. But with the stock trading at just 13 times its estimated future earnings, there's definitely a case for this being a cheap stock to own right now.
Investors are feeling bearish on the stock since AbbVie's top-selling rheumatoid arthritis drug, Humira, has lost patent protection and its sales are down 29% this year amid rising competition. The company, however, has been turning to both its pipeline and acquisitions to keep growing. Immunology drugs Skyrizi and Rinvoq will make up the gap for Humira in the long run. AbbVie also recently announced plans to acquire oncology company ImmunoGen for $10 billion, which makes antibody-drug conjugates that specifically target cancer cells.
For long-term investors, AbbVie offers a solid mix of growth potential and dividend income that makes it an excellent buy right now.
2. ExxonMobil
Oil and gas giant ExxonMobil is trading within just a few dollars of its 52-week low of $98.02 as declining oil prices have made investors bearish on the industry recently. It offers a strong yield of 3.7% and can be another excellent source of dividend income. The company has also increased its dividend payments for 41 straight years.
In October, ExxonMobil announced plans to acquire rival Pioneer Natural Resources for $60 billion in an all-stock deal that would allow it to improve economies of scale and bring down its production costs. In the longer run, the company is also diversifying its operations, with plans to produce lithium from subsurface wells by 2027. It's a way for the business to give itself exposure to the electric vehicle market, where lithium is necessary for batteries.
ExxonMobil could be a volatile stock but this can be one of the best dividend stocks to own in the oil and gas industry. In the past 12 months, the company has generated more than $41 billion in profits. The stock also trades at a relatively modest 10 times its estimated profits.
3. Cisco Systems
Networking and communications giant Cisco Systems is another dependable dividend stock that investors can buy for cheap these days. It's a few dollars away from its 52-week low of $45.56, and its dividend currently yields 3.2%. Cisco doesn't have a long streak of raising its payouts, but it has done so for 12 consecutive years.
This year, the company made a big splash with plans to acquire cybersecurity analytics company Splunk for $28 billion. This advances the company's cybersecurity capabilities, as together the companies can help customers tackle threats and also prevent them.
Cisco's essential and stable products, which include routers, phones, and servers, make this a fairly safe tech stock to own. As companies continue to expand into the cloud and grow their operations digitally, Cisco is a trusted brand that they'll likely turn to.
Although this may not be an exciting stock to own, the company's strong brand makes it an ideal buy, especially as it's trading at a forward price-to-earnings multiple of less than 13.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories, Cisco Systems, and Splunk. The Motley Fool recommends Pioneer Natural Resources. The Motley Fool has a disclosure policy.
