Amidst current global tensions and notable market fluctuations and uncertainties, investors might increasingly be looking towards defensive sectors, particularly oversold stocks offering high dividends.
With the Federal Reserve likely holding off on rate cuts for the foreseeable future, it's prudent to consider stocks that can weather economic uncertainties while providing a steady income. Oversold stocks present a unique opportunity for conservative, long-term, value-oriented investors.
Despite the overall market, SPY, being a mere 0.6% away from its all-time high, the market remains rife with uncertainty. Three oversold, high dividend-yielding stocks have caught analysts' attention in this environment. These undervalued gems, situated in resilient sectors, offer promising upside potential. Let's delve into these stocks and understand the reasons behind the bullish sentiment.
3 High-Yielding Oversold Stocks with Bullish Ratings
Lowe's Companies Inc.
Lowe's Companies (NYSE: LOW), a giant in the home improvement retail sector, is currently experiencing a pullback with an RSI of 27.03, signaling oversold conditions. The stock offers a dividend yield of 2.04% and a P/E ratio of 17.29, marking it as a valuable option for income-focused investors. While the consensus analyst rating for LOW is a hold, the price target of $251.33 suggests an impressive 16.79% upside.
In its latest earnings report on May 21, 2024, Lowe's posted an EPS of $3.06, surpassing the consensus estimate of $2.94 by $0.12. Although the firm earned $21.36 billion during the quarter, slightly above analysts' expectations of $21.14 billion, its revenue saw a 4.4% decline year-over-year. Despite these challenges, the stock's current valuation and potential for growth make it a compelling pick for value investors.
ConocoPhillips
ConocoPhillips (NYSE: COP), a prominent energy producer, is another stock in oversold territory with an RSI of 28.02. The stock is up 1.36% year-to-date and offers a dividend yield of 1.98%, paired with a P/E ratio of 13.28. COP has a moderate buy rating based on 16 analyst ratings, and the consensus price target forecasts over 22% upside.
On May 2, 2024, ConocoPhillips reported $2.03 per share earnings, slightly beating the consensus estimate of $1.99. The company generated $14.48 billion in revenue, just shy of the expected $14.72 billion. Despite the slight revenue miss, the stock's valuation and strong earnings performance indicate the potential for significant upside, making it an attractive option for investors looking to add energy sector exposure.
Target Corporation
Target Corporation (NYSE: TGT), a leader in the retail industry, is currently oversold with an RSI of 28.96. The stock has risen 1.97% year-to-date and offers an attractive dividend yield of 3.03% with a P/E ratio of 18.3. Analysts maintain a bullish outlook on TGT, with a consensus rating of moderate buy based on 18 ratings and a predicted upside of 24.22%, setting the consensus price target at $180.41.
In its most recent earnings report on May 22, 2024, Target posted an EPS of $2.03, missing the consensus estimate of $2.05 by a small margin. The retailer earned $24.14 billion during the quarter, compared to analysts' expectations of $24.52 billion, with quarterly revenue down 3.2% year-over-year.
In response to competitive pressures, Target recently announced price reductions on thousands of items to retain market share. The stock's dividend yield and potential for growth make it a worthwhile consideration for investors.
The Bottom Line
These three oversold stocks might offer promising opportunities for value-oriented investors amid recent isolated market pullbacks and ongoing uncertainties. Lowe's Companies, ConocoPhillips, and Target Corporation each present unique advantages, from compelling valuations and bullish analyst ratings to solid dividend yields and growth potential. Investors seeking to balance risk with income potential may find these stocks to be attractive additions to their portfolios.