In an expensive stock market, investors may be looking for a bargain that also pays for waiting for potential upside. Despite the recent volatility and decline in tech stocks, the overall market remains near all-time highs. In fact, veteran investor Jeremy Grantham told CNBC on Friday, “This is the most expensive market in American history.” Investors collect income by buying low-dividend stocks while waiting for the potential of the asset’s value to rise. “The demand for dividends has never been stronger, given the volatility in the market and the uncertainty of what the future holds,” Michael Clarfeld, portfolio manager at ClearBridge Investments, recently told CNBC. But not all dividend stocks are created equal. For example, an increase in dividends can be a sign that a company is in trouble. With this in mind, CNBC Pro screened the Vanguard Dividend Appreciation Index Fund ETF for stocks with a dividend yield of 1.5% or higher. These stocks are also popular on Wall Street, with each stock receiving a buy rating from more than 55% of the analysts it covers, according to FactSet, and price targets at least 20% above the stock’s current trading price. Stock prices have also fallen by at least 5% in the past three months. Abbott Laboratories’ dividend yield is 2.7%, but it has fallen nearly 10% in the past three months. The healthcare company has 23% upside from its average price target, and 79% of analysts rate it a buy, according to FactSet. Matt Powers, founder of Powers Advisory Group, recently told CNBC that the stock is significantly oversold. Trivariate Research in May also named Abbott Labs as a stable dividend growth company that can help provide downside protection for your portfolio. ABT YTD Mountain Abbott Laboratories YTD YTD The company is repositioning its portfolio to move into high-growth areas that have the greatest impact on patients, such as cardiovascular, medical technology and wearables, CEO Robert Ford said in an interview with CNBC’s “Squawk Box” earlier this month. “Demand for medical care will continue to accelerate. There are 9 billion people living longer on this planet,” he said. “Look at our growth outlook, look at the pipeline we’re building.” Accenture, a global professional services company with a 5.2% dividend yield, has lost about 35% over the past three months, but has 40% upside compared to its average price target. Approximately 57% of analysts rate the stock as a buy. Earlier this week, Accenture increased its stock repurchase program by $2 billion to $7.5 billion. The company last week announced higher third-quarter profits, but sales were lower than analysts expected. Stocks sold off following the latest financial results. ACN YTD Mountain Accenture YTD Accenture CEO Julie Sweet said the company has been hit hard by the Middle East conflict and is investing for long-term growth. He said there had been “significant progress” in business fundamentals. “I think investors are missing the tailwinds of AI and the long-term position of the company,” she said in an interview on CNBC’s “Squawk on the Street.” “We are very confident in the potential demand and it shows in the numbers.” Intercontinental Exchange was one of two financial institutions shown on the screen. The stock has a dividend yield of 1.7%, an increase of 58% from the average price target, and is rated a buy by 95% of analysts. The owner of the New York Stock Exchange is under pressure amid speculation about how prediction markets will affect the company’s business. Last October, ICE acquired a $2 billion stake in Polymarket. The stock price has fallen about 20% in the past three months. Finally, Medtronic’s yield is 3.6%, but it has fallen 8% in the past three months. However, the stock has 19% upside potential from analysts’ average price target, according to FactSet numbers. MDT YTD Mountain Medtronic Year to Date Earlier this month, Medtronic posted record highs for both its fiscal fourth quarter sales and bottom line. However, the outlook for full-year earnings per share was lower than expected. “We have big, powerful new growth engines, such as hypertension and (atrial fibrillation) ablation,” he said. “But our core business is also growing well.” The company recently filed an application with the Food and Drug Administration to expand its Hugo robot-assisted surgical system into general and gynecological areas. Additionally, the FDA has cleared a new pulse oximetry system. About 64% of analysts covering Medtronic rate it a Buy.
