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The S&P 500 has fallen 13.86% in 2022. Markets are expected to continue trading lower as fears of a slowing US economy continue to rise. While this is bad news for broader markets, there are still good investment pockets to take advantage of. Smart investors can look at value stocks with high dividends to get through the storm with relative calm.
The article below has listed some of the best dividend value stocks to buy now. The dividend payouts cushion the impact of market volatility and the potential capital appreciation ensures that you don’t miss out on market rallies.
5 Value Stocks with High Dividends:
5 Best US Value Stocks with High Dividends to Buy in a Correction
Carter’s
The economy might rise and fall, the pandemic might make a comeback, and inflation might continue to go higher but Carter’s will continue to chug along. Why? They sell clothing for babies. Babies outgrow their clothes ridiculously fast, and parents and grandparents will keep visiting Carter’s stores frequently.
The company reported its earnings for the March 2022 quarter recently. Net sales fell 0.8%, to $781.3 million due to a 10% drop in the US retail segment. The company had already issued guidance that this would be the case due to “the impact of store closures, timing of the Easter holiday, and non-recurring benefit realized last year from the unprecedented government stimulus which supported families with young children.”
However, this fall was offset by US wholesale and international net sales which grew 8% and 11%, respectively. For the second quarter of 2022, the company estimates “net sales of approximately $750 million to $775 million” and “adjusted operating income of approximately $95 million to $105 million, compared to $110.4 million in the second quarter of fiscal 2021.”
The stock closed on April 29 at $84.59 and analysts have an average target price of $113.89 on it which could give it a potential upside of around 35%. The stock has a dividend yield of 3.38% which makes it a great value stock with high dividends to buy now.
Huntsman
When a company increases its dividend by 70% in the last 5 years, it would not be wrong to assume that it is a solid stock. Specialty chemicals player Huntsman might not be in the most glamorous business but it can help its investors live a glamorous lifestyle with its dividend payout and capital appreciation potential.
It reported a net income of $240 million for Q1 2022 compared to its net income of $100 million for Q1 2021. First-quarter 2022 adjusted diluted earnings per share came in at $1.19 compared to $0.66 in Q1 2021. Q1 2022 adjusted EBITDA was $415 million compared to $289 million in Q1 2021.
The company also repurchased approximately $210 million worth of shares in Q1 2022. It intends to repurchase approximately $1 billion in shares during 2022. It has a dividend yield of 2.52%. The stock closed on April 29 at $33.87. The average analyst target for the stock is $46.71 which is a potential upside of almost 38%. This is one of the best value dividend stocks for 2022.
Corning
There will be demand for “Gorilla Glass”. That’s what Corning, the manufacturer of this benchmark technology for smartphones believes. And its numbers for Q1 2022 prove that this belief is not wrong. Analysts expected an EPS of $0.5 for Q1 2022. Corning crushed them with $0.54.
Sales came in at $3.7 billion, an increase of 15% compared to Q1 2021 when the expectation was $3.55 billion. Net sales in its Optical Communications segment were up 27.9% year-over-year to $1,198 million. Display Technologies recorded $959 million in sales compared to $863 million in Q1 2021. Specialty Materials’ net sales were up 9.3% to $493 million compared to Q1 2021.
The company expects sales of $3.7 billion to $3.9 billion in Q2 2022 with an EPS of $0.54 to $0.59. For the full year, Corning expects to “exceed $15 billion in sales with growth at a high single-digit percentage”.
If you go through the earnings call transcript, a lot of the responses by Corning’s top management allude to the fact that the company is unable to keep up with demand. In an era of supply chain constraints, this is a very good problem to have.
Corning has a dividend yield of 2.97%. The stock closed on April 29 at $35.19 and analysts have an average target of $46.09 on the stock, a potential upside of almost 31% making it one of the best value dividend stocks of 2022 in my book.
Lowe’s
Lowe’s has had a rough start to 2022. It lost over 22% year-to-date. As interest rates rise, the construction industry will be hit, and Lowe’s is one of the biggest players in the market. The housing market is falling and so is Lowe’s stock but we believe this is a great opportunity to enter the stock.
Lowe’s is a machine that will keep chugging along. Its latest numbers for Q4 2021 show “total sales for the fourth quarter were $21.3 billion compared to $20.3 billion in the fourth quarter of 2020, and comparable sales increased 5%.” Sometimes value stocks with high dividends are found in unlikely markets. Lowe’s is one of them.
The stock closed on April 29 at $197.73 and the average analyst target for the stock is $273.7 which is a potential upside of over 38%. Lowe’s is also known for its dividend payout which is currently at a yield of 1.6%. The company has increased its dividends for 59 straight years. If that doesn’t make it one of the best value stocks with high dividends, we don’t know what will.
Tempur Sealy
This is one of the largest bedding makers in the US. Its mattresses, pillows, mattress covers, sheets, cushions, and other accessories got a huge boost during the pandemic. People were stuck at home upgrading in a major way. The stock went from $10.93 on March 1, 2020, to $47.03 on December 1, 2021. Since then, the stock has fallen steadily. It closed on April 28 at $28.39 as investors believed that people will stop upgrading after the economy reopened and the outside world beckoned.
This fall is what has created a great opportunity for value investors. The company announced its earnings for the quarter ended March 31, 2022. Total net sales increased 18.7% to $1,239.5 million as compared to $1,043.8 million in the first quarter of 2021. Its international net sales showed a major jump, up 92% at $308.1 million as compared to $160.5 million in the first quarter of 2021. The international play could be the game-changer for Tempur Sealy in 2022.
The stock has a dividend yield of 1.47%. The average analyst target for the company is $38.33 which is an upside of over 36% from its current price. All of this makes Tempur Sealy one of the best value dividend stocks to buy now.
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