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4 Oversold Large Cap Stocks Yielding High Dividends

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Photo of Heinz ketchup bottles in display

Key Points

  • As market hype surrounds AI and potential Federal Reserve interest rate cuts loom, investors are presented with a junction of prudence and opportunity.
  • Overlooked and oversold large-cap stocks offer compelling dividend yields for investors seeking income and potential capital appreciation.
  • High dividend-yielding stocks prove advantageous in low-interest rate environments, offering stability and income for investors seeking alternatives to bonds and savings accounts.
  • 5 stocks we like better than BHP Group

As the market continues its relentless ascent to new heights, propelled by the surging tech sector and hype surrounding AI,  the murmurs of potential interest rate cuts by the Federal Reserve continue, and investors find themselves at a juncture where prudence meets opportunity. 

Amid this euphoric rally, it's easy to overlook the less glamorous corners of the stock market. Specifically, oversold large-cap stocks that have fallen out of favor but offer compelling dividend yields.

The allure of overlooked, undervalued equities cannot be overstated in an environment where the spotlight shines brightest on high-flying tech giants and growth stocks. With the Relative Strength Index (RSI) signaling oversold conditions in many such stocks, these stocks present an intriguing proposition for investors seeking income and potential capital appreciation.

Against this backdrop, let's examine four oversold large-cap stocks boasting above-average dividend yields and positive analyst ratings. In a market where optimism often overshadows caution, these underappreciated stocks may offer a prudent alternative for investors looking to navigate the uncertainties ahead and potential rate cuts while benefiting from the potential upside of dividend-paying equities.

4 Oversold Large Cap Stocks Offering Strong Dividends

Kraft Heinz NASDAQ: KHC

Global foot and beverage company Kraft Heinz boasts strong dividend strength, a handsome dividend yield of 4.63%, and a P/E of 14.95. Its stock has struggled recently; however, it is trading below all major moving averages and down close to 7% year-to-date. Despite the weakness, analysts are bullish on the name, with a moderate buy rating and consensus price target forecasting almost 20% based on twelve ratings. The stock has positive news sentiment and projected earnings growth of 5.63%, while its RSI nears oversold territory, currently at 38.


Amgen NASDAQ: AMGN

Amgen, the biopharmaceutical giant with a $147 billion market capitalization, boasts a strong dividend growth and P/E of 22.10. Year-to-date, the stock has fallen just over 4% and is currently trading with an attractive RSI of 37.92 and above a rising 200-day SMA. Amgen offers an attractive 3.26% dividend yield and projected earnings growth of 7.91%. Based on nineteen analyst ratings, the company has a hold rating with a consensus price target forecasting a 7% upside. 

BHP Group NYSE: BHP

BHP Group, a leading natural resources company based in Australia, has a $144 billion market capitalization and value-attractive P/E of 11.11. The stock boasts strong dividend growth and a far above-average dividend yield of 5.01%. Year-to-date, the stock has fallen to a significant support area, down almost 17%. BHP shares have a hold rating based on nine analyst ratings, and the stock has an RSI of 40.83, edging closer to oversold territory. 

Rio Tinto Group NYSE: RIO

The Rio Tinto Group is the second largest miner worldwide and a top-rated dividend stock, with a whopping 8.15% dividend yield. The $79 billion company has struggled to outperform its sector recently, with its stock trending lower since the start of the year, now down over 15%. Analysts remain bullish despite the steady selloff year-to-date and negative projected earnings growth for the full year. Based on eleven ratings, the stock has a moderate buy rating and a price target of $72, forecasting an almost 14% upside.

Rate Cuts Favor High Dividend Stocks

As talk of interest rate cuts strengthens, it's worth noting that high dividend-yielding stocks are particularly advantageous in low-interest rate environments. They offer higher yields compared to bonds and savings accounts, attracting investors seeking alternative income sources.

Additionally, these stocks provide a consistent income stream, which is valuable for retirees or those desiring stable earnings. In contrast, during high-interest rate environments, as has been the case for the past several years, the appeal of dividend stocks may decrease as bonds become more competitive in yield. 

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Should you invest $1,000 in BHP Group right now?

Before you consider BHP Group, you'll want to hear this.

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While BHP Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Kraft Heinz (KHC)
4.3326 of 5 stars
$35.25-1.7%4.54%15.39Moderate Buy$40.08
Amgen (AMGN)
4.662 of 5 stars
$299.97-1.9%3.00%42.85Moderate Buy$305.65
Rio Tinto Group (RIO)
0.5183 of 5 stars
$71.44-0.6%7.21%N/AModerate Buy$72.00
BHP Group (BHP)
0.3864 of 5 stars
$59.78+0.3%4.77%N/AHold$50.00
Compare These Stocks  Add These Stocks to My Watchlist 

Ryan Hasson

About Ryan Hasson

  • Ry.has7@gmail.com

Contributing Author

Technical Analysis, Momentum Trading, Risk Management

Experience

Ryan Hasson has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Equity research and analysis, technical analysis and price action, market sentiment and underlying themes, risk management and trading psychology

Education

Bachelor of Commerce in Financial Management

Past Experience

Equities trader, Kershner Trading Group, business analysis consultant, SMB Capital

Zoom International: Business Analysis Consultant.


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