Dividend Power Play: 2 Undervalued Giants Just Boosted Their Payouts — Should You Take a Closer Look?
As the stock market rebounds from recent tariff turbulence, dividend-paying stocks are still trailing the broader rally — and that’s opening up undervalued opportunities for savvy investors.
Why It Matters
When a company raises its dividend, it often signals confidence in future cash flows and financial health. For dividend investors, this isn’t just income — it’s a potential growth signal. Morningstar analysts recently screened for US-based companies that:
✅ Pay a quarterly dividend
✅ Raised their dividend by at least 2% in May 2025
✅ Have a Morningstar rating of 4 or 5 stars, meaning they are considered undervalued
✅ Offer dividend yields above 2%
Only two companies made the final cut:
1. PepsiCo (PEP)
• ⭐️ Morningstar Rating: ★★★★★
• Fair Value Estimate: $170.00
• ️ Economic Moat: Wide
• Dividend Growth: Around 6% per year projected through 2033
• Payout Ratio: ~66% (targeting 72% in the next 10 years)
• Key Insight: PepsiCo consistently returns value to shareholders via both dividends and share buybacks, adjusting prudently based on valuation.
“We expect the dividend to grow steadily while maintaining a disciplined capital return strategy.” — Dan Su, Morningstar Analyst
2. EOG Resources (EOG)
• ⭐️ Morningstar Rating: ★★★★
• Fair Value Estimate: $131.00
• ️ Economic Moat: Narrow
• Dividend Track Record: Never cut or suspended since 1999
• Capital Strategy: Focus on organic growth over M&A, with disciplined asset management
• Key Insight: EOG’s sound investment strategy and strong balance sheet support its ability to sustain rising dividends — including both fixed and variable payouts.
“Their dividend track record speaks for itself — it’s all about operational discipline and capital strength.” — Joshua Aguilar, Morningstar Director
Final Thoughts for Investors
• Rising dividends during a market rebound could indicate which companies are positioned to thrive in the recovery.
• Both PEP and EOG offer a mix of value, growth potential, and reliable income — ideal for long-term dividend-focused portfolios.
• You may want to add them to your watchlist or do further analysis before making any portfolio changes.
For the InvestingPort Community:
Have you considered dividend growth as part of your strategy?
Would you invest in a company that raises dividends during uncertain times?
Drop your thoughts or questions in the group
#InvestingPort #DividendStocks #PepsiCo #EOGResources #StockMarket #LongTermInvesting #IncomeInvesting #ValueStocks #FinancialConfidence
As the stock market rebounds from recent tariff turbulence, dividend-paying stocks are still trailing the broader rally — and that’s opening up undervalued opportunities for savvy investors.
Why It Matters
When a company raises its dividend, it often signals confidence in future cash flows and financial health. For dividend investors, this isn’t just income — it’s a potential growth signal. Morningstar analysts recently screened for US-based companies that:
✅ Pay a quarterly dividend
✅ Raised their dividend by at least 2% in May 2025
✅ Have a Morningstar rating of 4 or 5 stars, meaning they are considered undervalued
✅ Offer dividend yields above 2%
Only two companies made the final cut:
1. PepsiCo (PEP)
• ⭐️ Morningstar Rating: ★★★★★
• Fair Value Estimate: $170.00
• ️ Economic Moat: Wide
• Dividend Growth: Around 6% per year projected through 2033
• Payout Ratio: ~66% (targeting 72% in the next 10 years)
• Key Insight: PepsiCo consistently returns value to shareholders via both dividends and share buybacks, adjusting prudently based on valuation.
“We expect the dividend to grow steadily while maintaining a disciplined capital return strategy.” — Dan Su, Morningstar Analyst
2. EOG Resources (EOG)
• ⭐️ Morningstar Rating: ★★★★
• Fair Value Estimate: $131.00
• ️ Economic Moat: Narrow
• Dividend Track Record: Never cut or suspended since 1999
• Capital Strategy: Focus on organic growth over M&A, with disciplined asset management
• Key Insight: EOG’s sound investment strategy and strong balance sheet support its ability to sustain rising dividends — including both fixed and variable payouts.
“Their dividend track record speaks for itself — it’s all about operational discipline and capital strength.” — Joshua Aguilar, Morningstar Director
Final Thoughts for Investors
• Rising dividends during a market rebound could indicate which companies are positioned to thrive in the recovery.
• Both PEP and EOG offer a mix of value, growth potential, and reliable income — ideal for long-term dividend-focused portfolios.
• You may want to add them to your watchlist or do further analysis before making any portfolio changes.
For the InvestingPort Community:
Have you considered dividend growth as part of your strategy?
Would you invest in a company that raises dividends during uncertain times?
Drop your thoughts or questions in the group
#InvestingPort #DividendStocks #PepsiCo #EOGResources #StockMarket #LongTermInvesting #IncomeInvesting #ValueStocks #FinancialConfidence