3 Undervalued High-Dividend Stocks

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High-dividend stocks have outperformed the broader stock market in 2022. Here’s a blog post looking at some undervalued high-dividend stocks.

2022 hasn’t been a good year for the stock market, and the stock market doesn’t show signs of rebounding anytime soon. Dividend stocks have generally outperformed the broader US stock market this year, prompting many investors and traders to consider them viable options in an uncertain market scenario.


The stock market has edged dangerously close to a bear market, with inflation at a 40-year high and the Federal Reserve raising interest rates. As a result, many investors have turned their attention toward dividend stocks to cushion the blow of the rocky markets in an inauspicious time.  


Research shows that high-dividend yielding stocks have been better protected from the market crash than other stocks. These stocks as a group have declined by 2.4 percent in 2022. Meanwhile, the broader stock market is down by nearly 18 percent.


Many investors and traders have already started investing in high-quality dividend stocks with sizable yields, meaning their prices are rising. However, you still have the opportunity to buy quality high-yield dividend stocks at discounted prices.

Undervalued Dividend Stocks

Finding undervalued dividend stocks is easier said than done. Ideally, you’ll want to find a reliable company with a competitive advantage expected last over 20 years. In addition, you’ll want to select a company with more pricing power than competitors, meaning they can pass the cost of rising prices to customers when inflation soars.


Here are some undervalued dividend stocks you might want to consider:

Compass Minerals International CMP

Compass Minerals International operates the world’s largest active salt mine in Goderich, Ontario. The Goderich salt mine has deposits that are 100 feet thick. Conversely, most active salt mines today have seams that are only 25 to 30 feet thick. This natural advantage allows Compass Minerals International to use more efficient mining techniques, enabling them to remove more salt for each foot mined. Furthermore, the thicker seams also reduce the cost of transporting mined ore to the surface.


Compass Minerals International also holds unique assets with geological advantages that cannot be replicated, meaning the firm has a long-term competitive advantage over rival firms.


You might have seen Garmin watches or other products. However, the company’s primary focus lies in the aviation market. The company develops innovative GPS technology necessary for mission-critical functions in mid-sized jets and helicopters. Garmin extensively supplies products to the government, and most governments require avionic products to hold specific certifications. Garmin is an industry leader within this segment. The company also received a boost when the Federal Aviation Administration (FAA) announced a new mandate requiring ADS-B Out avionic units. Garmin has the second-most approved ADS-B avionic products after Honeywell, making them a viable investment option for traders and investors.


Few companies have the pricing power that Comcast possesses. The company’s cable business makes it an extremely strong business. Most US homes today can receive fixed-line internet service access from two providers - the traditional cable or phone provider. Comcast is the traditional cable company for nearly half the USA. In addition, the industry has extremely high barriers to entry due to enormous capital costs, meaning competitors are unlikely to emerge.


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